Secured Loans

How secured loans work

A lender takes a legal charge over your property. For a typical second-charge mortgage, this sits behind your existing first mortgage.

• The loan is linked to property equity
• Loan amount and term can differ from unsecured borrowing
• The lender may require valuation and legal work
• Affordability and credit assessment still apply
• Existing mortgage and total secured debt matter

When a secured loan may be worth exploring

General information only — not personal advice.

Secured vs unsecured loans

Secured borrowing is not automatically cheaper.

Secured loan vs remortgage

Which is cheaper depends on the full cost of both options, not just the new borrowing rate.

Costs and fees

Possible costs can include broker fees, lender/arrangement fees, processing fees, valuation fees, legal costs, discharge/admin fees and early repayment charges. Some fees may be added to the loan.

APRC can be useful because it reflects certain costs and rate changes over the assumed term, but your personalised offer may differ.

Debt consolidation

Debt consolidation can reduce the number of monthly payments, but a lower monthly payment does not necessarily mean the borrowing is cheaper.

• How much will I repay in total?
• Will the term become longer?
• Are fees added?
• Am I converting unsecured debt into secured debt?
• Can I afford the payment if rates rise?

What affects the rate

Lenders may consider the factors below. This is not a fixed weighting or scoring model.

• Requested loan amount
• Combined LTV / available equity
• Property value
• Existing mortgage
• Credit history
• Affordability
• Employment / income
• Loan term
• Borrowing purpose
• Rate type
• Property characteristics

How to apply

1. 1Decide how much you need
2. 2Check property value and current mortgage balance
3. 3Compare indicative options
4. 4Complete eligibility / affordability assessment
5. 5Credit checks take place
6. 6Property valuation or automated valuation may be used
7. 7Legal / mortgage checks may be completed
8. 8Formal offer is issued
9. 9Loan completes and funds are released

Some steps differ by lender and property.

Questions before applying

• What is the APRC?
• What is the total repayable?
• Is the rate fixed or variable?
• What happens after the introductory period?
• Are fees added to the loan?
• Is there a broker fee?
• Are there early repayment charges?
• What is the maximum combined LTV?
• Can I afford repayments if rates rise?
• Is an unsecured loan or remortgage cheaper overall?

Risks to understand