Hi niceoneted,
Yeah, that's what I thought should happen, but the very nice man in the bank led me to believe that I wouldn't have to pay interest on the equity released, that I'd just have to pay it back to them when I sold the house!
I did find it hard to swallow, so asked him in a few different ways. When I asked him why the bank would do that, i.e. what benefit it would be to them, he told me they were getting interest on my current mortgage of 26K, and if I took out an additional loan to top up the equity release (which would be around 65K) then that would also be business for them.
Basically he was saying I could have the 204K equity release, and I could pay it back to them in 2/5/10 years time when I sold the house, with my mortgage staying as is, unless I needed the addtitional top-up loan. Was he talking complete rubbish?!?
J