Your home may be at risk if you do not keep up repayments on a secured loan. Think carefully before securing other debts against your home.
Quick answer
A secured loan is tied to your home. This gives lenders more security, which is why they can offer larger sums (often £10,000 to £250,000+) at lower rates than unsecured products. However, failing to repay puts your home at genuine risk of repossession. Only consider a secured loan once you have fully explored unsecured alternatives.
Types of Secured Borrowing Explained
In the UK, secured lending covers a range of products. Most are backed by residential property, though some commercial or asset-backed products exist. The main options available to homeowners include homeowner loans, second charge mortgages, and remortgaging. Understanding the difference between them is important before proceeding.
Homeowner Loans
Larger loans secured against your property equity. Often lower rates than unsecured.
Learn more →Second Charge Mortgages
A loan secured on your home that sits alongside your existing mortgage.
Learn more →Secured vs Unsecured
Not sure which is right? Understand the trade-offs before deciding.
Learn more →Borrowing Against Your Home
Options, risks, and alternatives when using your home as security.
Learn more →Who Might a Secured Loan Suit?
- Homeowners with substantial equity who need to borrow a larger sum
- Borrowers who have been declined for unsecured credit
- Those mid-way through a fixed mortgage deal who face early repayment charges if they remortgage
- People consolidating several debts into a single lower monthly payment (though this may increase total cost - see risks below)
If you are considering a secured loan for debt consolidation, do the maths carefully. Extending short-term debts over a longer secured term can significantly increase the total amount you repay, even at a lower monthly payment.
Secured Loans vs Remortgaging
Many homeowners assume a secured loan and a remortgage are the same thing. They are not. A remortgage replaces your existing mortgage deal. A second charge mortgage (secured loan) sits alongside it as a separate agreement. The right choice depends on your current mortgage terms, any early repayment charges, and how much you need to borrow. Explore your remortgage options and compare them alongside secured lending before deciding.
Alternatives to Consider First
Before committing to a loan secured against your home, explore these alternatives:
- Unsecured personal loans - no property risk; suitable for smaller amounts
- Remortgaging - if your current deal is ending or allows it without penalties
- Other borrowing alternatives - credit unions, 0% cards, savings withdrawal
Frequently Asked Questions
A secured loan is a borrowing product where the loan is tied to an asset - usually your home. Because the lender has a legal charge over the property, they face less risk, which typically means lower interest rates and the ability to lend larger amounts than unsecured products. However, if you fail to repay, the lender can apply to repossess your property.
A remortgage replaces your existing mortgage - either with the same lender (a product transfer) or a new lender. A secured loan (or second charge mortgage) sits alongside your existing mortgage as a separate loan. A remortgage might offer access to better rates if your deal is ending, while a secured loan can be useful if you are mid-deal and face early repayment charges on your main mortgage. Explore remortgaging options.
The amount you can borrow depends on your available equity (the difference between your property value and outstanding mortgage balance), your income, existing debts, and the lender's own criteria. Lenders will also consider your loan-to-value ratio. Our guide on how much you can borrow explains this in detail.
Second charge mortgages are regulated by the Financial Conduct Authority (FCA) and are subject to the Mortgage Credit Directive. This means lenders must carry out affordability assessments and provide a European Standardised Information Sheet (ESIS). Always check that any lender or broker you use is FCA authorised.
Before securing a loan against your home, consider: unsecured personal loans (if the amount is manageable), remortgaging to release equity (if your current deal allows), 0% credit cards for smaller purchases, or savings if available. Read about all borrowing alternatives. Only use a secured loan if you are confident you can sustain the repayments long-term.
Disclosure
Fundslender is a UK borrowing information and guidance website. We do not lend money directly. When you use this site, you may be connected with regulated lenders or brokers. We may receive a fee or commission if you proceed with a product found through our site. This does not affect our editorial independence or the information we provide. Rates, terms, and approval decisions are set by each individual lender and will vary based on your personal circumstances. Approval is not guaranteed. All borrowing involves risk. Always compare your options, read the full terms, and seek independent regulated financial advice if you are unsure whether a product is right for you. How we make money · Editorial policy