This basically sounds like a second mortgage where you might look to do this if you were able to secure a significantly better rate and you are locked into a higher fixed rate. I could see this being worth it if you were in the US were you may have been locked into a long term (30yr) fixed rate and you can’t get out and then suddenly the interest rates drop significantly. I am not sure of the benefits in a market like ours where the longest fixed loans are usually around 5yrs. In terms of would the bank hold some ownership. Nothing is free and in effect there would most likely be a fixed arrangement that the loan would then be settled by a given date ie sale of the house. I can’t imagine this being perpetual. So your house is collateral on the new re-draw on equity loan you have now taken on to pay down your home loan. Anyway just spit-balling as I have no idea but was trying to process how it could work.