Selina Finance

A Home Equity Line of Credit (HELOC) is a revolving credit facility secured against your home, whereas a traditional secured loan gives you a fixed lump sum that you repay in equal monthly instalments from day one. With a HELOC, you have an approved credit limit and draw funds as and when you need them during a flexible period, typically two to five years. You repay only the interest on what you have drawn, not on the full limit. When you repay drawn funds, they become available to draw again, like a credit card but secured against your property.

At the end of the flexible drawdown period, any outstanding balance converts automatically to fixed monthly repayments for the remainder of the term, with no need to refinance or reapply. A standard secured homeowner loan has none of this flexibility: you receive the money in full on day one and repay it on a fixed schedule throughout the term. The HELOC is a better fit when costs are staged or uncertain; the homeowner loan is a better fit when you know the exact amount you need upfront. The guide to what is a second charge mortgage explains how both product types work as second charges.

Both products run from £5,000 to £500,000. The LTV limits differ between the two products. The HELOC is available up to 85% combined LTV, meaning the total of your existing mortgage and the new credit facility cannot exceed 85% of the property value. The homeowner loan considers up to 100% LTV. Within those ranges, the maximum loan size at different LTV bands also varies: loans up to 75% LTV can reach £500,000; loans between 75% and 85% LTV are capped at £300,000.

The amount you are actually offered depends on the property valuation, the outstanding balance on the first charge mortgage, the affordability assessment, and the credit tier your profile falls into. Selina uses individual risk-based pricing rather than standard rate cards, which means the rate and terms are tailored to your specific circumstances rather than drawn from a fixed product menu. A broker can use Selina's eligibility tool to give a realistic indication of the likely borrowing range before any formal application is submitted. The guide to understanding LTV ratios explains how equity position affects the amount available.

The HELOC carries two one-off fees. The product fee is 2.0% to 2.6% of the credit limit, capped at £9,995. The specific percentage depends on the drawdown period chosen: a two-year flexible period carries the lower end of this range, while a five-year period carries the higher end. The arrangement fee is 6.7% to 7.8% of the loan amount, capped at £3,000. Both fees can be paid upfront at the point of drawdown or added to the loan balance so that the cost is spread over the term. There are no ongoing fees, no annual charges, and no early repayment charges at any point during or after the flexible period.

It is important to factor these fees into any comparison with a fixed homeowner loan or a remortgage. The HELOC fee structure front-loads the cost, while the benefit of paying interest only on drawn funds accrues over time. Whether the HELOC represents better value than a fixed loan depends on how much of the credit limit you actually draw and over what period. A broker can model the total cost across both products for your specific drawdown pattern. The guide to secured loan fees explained covers how to compare costs across different fee structures.

Selina operates two credit tiers. Status 0 is the cleaner credit tier. Under Status 0, borrowers can have up to two missed payments across multiple unsecured credit items, and there is no requirement for those unsecured items to be up to date where they are being consolidated as part of the loan. Status 1 allows conduct on unsecured credit to be disregarded entirely where those items are being consolidated or brought up to date at the point of application. The tier that applies affects the maximum loan-to-income ratio available: 6.5 times for Status 0 and 6.0 times for Status 1.

Selina's positioning is at the cleaner end of the second charge market, and neither tier accommodates significant or recent secured credit problems such as mortgage arrears. Borrowers with more substantial adverse credit histories, including CCJs, defaults, or historic mortgage arrears, are likely to be better served by specialist adverse credit lenders. A broker can review your credit file and give a realistic view of which lenders are likely to consider your application before any formal submission is made. The guide to secured loans for bad credit covers how different lenders approach impaired credit profiles.

Yes. Self-employed borrowers are considered across both the HELOC and homeowner loan products. The minimum self-employed age is 21, and income evidence will be required as part of the application. Following the March 2026 criteria update, Selina simplified its income assessment for self-employed borrowers and removed the minimum income requirement that previously applied. Income from partnerships and contractor arrangements is also considered, with evidence requirements that reflect the individual's trading structure.

For employed applicants, the minimum time in the current role is one month, which means recently changed jobs are also considered. Selina accepts up to 100% of bonus, commission, and overtime income where regular payments can be evidenced. The removal of the debt-to-income calculation in March 2026 further simplified the affordability assessment for borrowers with more complex income structures. The guide to secured loans for self-employed borrowers covers income evidence requirements across different lenders.

The right product depends primarily on how you need to access the money. If you have a specific, known cost that you need in full on day one, such as a single debt consolidation, a defined purchase, or a project with a fixed budget, the homeowner loan is likely the better fit. You receive the amount agreed, repay it in fixed monthly instalments, and know exactly what you owe at every stage. A fixed-rate homeowner loan also gives payment certainty that the variable-rate HELOC cannot provide.

If your costs are staged, ongoing, or uncertain in total, the HELOC may work out more cost-effective. Home improvements carried out in phases, school fees billed each term, or a business that needs to draw on funds periodically rather than all at once are common cases. With the HELOC, you pay interest only on what you have actually drawn, which can reduce the total interest cost compared with borrowing the full projected amount upfront. The trade-off is the front-loaded fee structure and the variable rate. A broker who understands both products can help model the total cost of each option for your specific situation, which is the most reliable way to make the decision. The guide to are secured loans a good idea covers the broader considerations.

Yes. Both products can be used for debt consolidation, and this is one of the most common purposes Selina's borrowers cite. For the homeowner loan, the agreed sum is typically paid directly to creditors where consolidation is involved. For the HELOC, the available credit limit can be drawn to clear existing debts during the flexible period, with the benefit that only the amount actually cleared needs to be drawn on day one rather than the full anticipated consolidation amount.

It is essential to understand the implications of consolidating unsecured debts into a secured loan. Credit cards, personal loans, and store card balances are currently unsecured: if you cannot repay them, creditors cannot take your home. Once consolidated into a second charge mortgage, those debts become secured against your property. If you subsequently cannot keep up with repayments, your home is at risk. Extending the repayment term to reduce the monthly payment can also increase the total interest paid over the life of the loan even if each individual payment is lower. The guide to secured loans for debt consolidation covers these trade-offs in full before you decide.

Yes. Selina Finance Limited is authorised and regulated by the Financial Conduct Authority under registration number 820183. The company is registered in England and Wales (Company No. 11497606) and is headquartered in London. As a regulated second charge mortgage lender, Selina is required to carry out mandatory affordability assessments on all applications, provide standardised mortgage disclosure, and give borrowers the right to complain to the Financial Ombudsman Service if they are dissatisfied with the outcome.

Selina is also a Certified B Corporation, having met independently verified standards of social and environmental performance in 2025. Both the HELOC and the homeowner loan are regulated second charge mortgages. This means the same FCA consumer protections apply to both products: the right to a compliant affordability assessment, a reflection period before completing, and access to the Financial Ombudsman Service. The regulatory status is the same regardless of whether you apply directly via Selina's website or through an intermediary broker.