A Practical Guide to Raising Funds as a Homeowner

When a homeowner needs to raise a larger sum (for a renovation, education costs, debt consolidation, or a major life change) a property can offer options that aren’t available to renters. But “property value” is not the same thing as “spendable cash”, and turning equity into funds comes with costs and risks. A sensible approach starts with a clear view of the household’s wider finances, then considers the most appropriate route (and the trade-offs) before any agreement is signed.

Assess the current financial position

Before looking at any borrowing against a home, it helps to build a simple financial snapshot:

• Income: salary, benefits, freelance income, rental income (if relevant)
• Outgoings: mortgage, utilities, transport, food, childcare, insurance, subscriptions
• Existing credit: loans, credit cards, overdrafts, car finance
• Savings and emergency buffer: how long the household could cover essentials if income dropped
• Equity estimate: the home’s approximate value minus any outstanding mortgage balance

A practical starting point is a structured budgeting tool that makes spending patterns visible. MoneyHelper’s free Budget Planner is designed specifically for tracking income and outgoings and spotting where savings might be possible.

Using home equity wisely

Home equity is the portion of the property that’s owned outright: broadly, the home’s current value minus what’s still owed on the mortgage. Equity can be accessed in a few common ways:

• Further advance / increasing the mortgage: borrowing more from the existing mortgage lender, if affordability checks allow. 
• Remortgaging: switching to a new deal and potentially borrowing extra at the same time (often used to fund renovations or consolidate debt).
• Second charge borrowing: adding another loan secured on the home alongside the primary mortgage (more on this below).
• Equity release (later-life lending): typically for homeowners aged 55+, allowing access to property value without moving, repaid when the home is sold later in life. 

Used well, equity funding can be a strategic tool. For example, when it finances a home improvement that increases comfort and potentially value, or when it replaces higher-cost debt with a more manageable structure. Used poorly, it can turn a short-term problem into a long-term financial strain.

One common way homeowners access home equity is through secured loans, which use the property’s value as collateral. A secured loan can sometimes be used to raise funds for large costs, but the key risk is obvious: if repayments are not maintained, the home may be at risk. 

Alternative funding options and support

Equity-based borrowing is not the only way to raise funds. Depending on the household’s circumstances, a more suitable (or safer) route might be:

• Structured saving and staged funding: if the expense isn’t urgent, saving monthly and paying in stages can reduce the need for borrowing. 
• Insurance policies that pay out under specific conditions: for example, critical illness or income protection may provide support during certain life events. Suitability depends entirely on policy terms and eligibility (and it won’t help for “planned” expenses).
• Pension and later-life planning: for older homeowners, equity release is one option — but so is reviewing retirement income plans and seeking regulated advice before committing to anything that affects long-term security. 
• Government support (where eligible): for homeowners on certain benefits who are struggling with mortgage interest costs, the UK’s Support for Mortgage Interest scheme exists, structured as a repayable loan secured against the home. 
• Household support and hardship guidance: if the reason for raising funds is financial distress (rather than a planned project), impartial guidance and debt advice can sometimes unlock options that don’t involve putting the home at further risk.