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Secured Loans
Secured loans come with more than just an interest rate to think about. This guide breaks down every fee you might face, from arrangement and valuation costs to early repayment charges, so you can work out the true cost of borrowing against your home.
Secured loan fees generally fall into three categories: upfront costs, ongoing charges and exit fees.
Fees can add a meaningful amount to your total borrowing cost, so it's worth comparing the total cost of a loan, not just the headline rate or the upfront fee, before you decide. Some fees, such as broker and arrangement fees, are sometimes negotiable, while others, such as valuation fees and early repayment charges, generally aren't. Speak to an advisor to get a full fee breakdown before you commit.
Fee categories
Understanding the full cost of a secured loan means looking beyond the interest rate. Secured loan fees can add a meaningful amount to what you eventually repay, and knowing what to expect - and what's negotiable - puts you in a stronger position when you compare lenders.
A secured loan differs from an unsecured loan because you use an asset, usually your home, as collateral. This generally lets you borrow larger amounts, and secured loans typically offer lower interest rates than unsecured borrowing because the collateral reduces the lender's risk. In return, you're taking on a real risk: if you fall behind on repayments, your property could be at risk.
Secured loan fees fall into three broad categories: costs you pay upfront to set up the loan, ongoing charges that might apply during the term, and exit fees if you repay early. Most borrowers focus on the interest rate alone, but fees can meaningfully increase your total borrowing cost, so it's worth understanding each one before you apply.
Here's a summary of the main fees you might encounter:
Secured loans are regulated by the Financial Conduct Authority. We're a broker, not a lender - we don't set these fees, but we compare a wide range of lenders to help you find a cost-effective option for your circumstances.
Upfront fees are the costs you pay - or add to your loan - when you take out a secured loan. Not every lender charges every fee, and some offer fee-free products with a different rate structure instead.
The arrangement fee (sometimes called a product fee or completion fee) is what the lender charges for setting up your loan. It covers their administration, underwriting and account setup costs.
Fee-free products are available from some lenders, usually with a different rate structure to offset the missing fee. Standard products typically charge a moderate arrangement fee, while more complex cases, such as adverse credit applications, tend to attract higher fees.
What affects your arrangement fee: your credit profile plays a significant role. Borrowers with an excellent credit history often qualify for fee-free products, while those with adverse credit typically face higher fees as lenders offset their increased risk. Loan size matters too - larger loans sometimes attract reduced or waived fees because lenders earn more overall.
Can you add it to the loan? Most lenders let you add the arrangement fee to your loan balance rather than paying it upfront. This avoids an upfront cost, but it means you'll pay interest on the fee itself for the rest of the term, which increases its real cost above the amount shown on the fee schedule. Weighing up whether to pay upfront or add it to the loan is exactly the kind of comparison an advisor can help you make.
Lenders need to confirm your property's value before approving a secured loan. The valuation fee pays for a surveyor to assess your home and report back to the lender. Costs generally scale with property value:
When is a valuation required? Almost always. A small number of lenders offer "desktop valuations" for straightforward properties in well-documented areas, using automated tools and comparable sales data. These are free but only available for standard properties with recent, comparable sales nearby.
What happens during a valuation? A surveyor typically spends 15-30 minutes at your property, checking its condition, the number of bedrooms, bathrooms and reception rooms, any extensions or structural changes, access and parking, and how it compares to similar local properties. This assessment is a key factor in how much you can borrow, since lenders use it to work out your loan-to-value ratio.
Important: the lender's valuation is not a full survey. It's designed to protect the lender, not you. If you have concerns about your property's condition, consider commissioning a separate homebuyer's report.
When you work with a broker, there may be a fee for the advice and arrangement service. Broker fees vary across the market: some brokers charge a fixed fee, others take a percentage of the loan, and some are paid commission by the lender without charging you directly.
At Money Saving Advisors, your advisor will explain any fees before you proceed, so you know exactly what you're paying for. That includes access to a wide range of lenders, expert matching to the right lender for your circumstances, application management and document handling, negotiation on rates and fees where possible, and support through to completion.
Is it worth paying a broker fee? In most cases, yes. Rates and total costs can vary significantly between lenders for the same borrower, so comparing across a wider panel can mean a meaningfully lower total cost than approaching a single lender directly, even once a broker fee is taken into account.
Secured loans require legal work to register the charge against your property at the Land Registry. This protects the lender's interest if you default on repayments.
The lender's own solicitor usually handles this and charges a fee that you pay. Most secured loans don't require you to have separate legal representation - the lender's solicitor handles the charge registration and you simply sign the documents. For larger loans, or more complex situations, independent legal advice is worth considering, though this comes with an additional cost.
Can legal fees be avoided? No, but some lenders include legal costs within their arrangement fee or offer "fee-assisted" packages. These often come with a different rate structure, so it's worth calculating whether they're actually cheaper overall.
Don't assume the fee-free option is automatically cheaper. A modest arrangement fee combined with a more competitive rate often works out less expensive over the full term than a fee-free product - ask your advisor for a full cost comparison, not just the headline fee.
Compare fees
Arrangement, valuation, broker and legal costs vary between lenders. Speak to an advisor to see a full fee breakdown for your circumstances.
Once your secured loan completes, most of what you pay each month covers interest and capital repayment. Secured loans are typically repaid in monthly instalments over a longer period, which can run to 25 years or more, though a few other charges can apply along the way.
Some lenders charge ongoing administration fees for account maintenance. These might include an annual service fee, a paper statement fee if you don't opt for paperless statements, a duplicate document fee if you need copies of paperwork, or an account amendment fee if you change your details or payment date.
How to avoid these: choose lenders with no annual fees and sign up for paperless statements. Most modern lenders have eliminated ongoing administration charges entirely.
If you miss a payment or it bounces, expect a charge for each occurrence. More importantly, missed payments damage your credit score and could trigger your lender to start recovery proceedings.
Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
If you can't pay, contact your lender immediately. Most will work with you to find a solution, such as a payment holiday, reduced payments, or a term extension. Ignoring the problem makes everything worse. If you're struggling more broadly, MoneyHelper offers free, independent guidance on 0800 138 7777.
Early repayment charges (ERCs) are fees for paying off your secured loan before the agreed term ends. They compensate the lender for the interest they'll lose as a result.
Most secured loan ERCs work on a sliding scale, reducing each year you hold the loan, until they eventually disappear:
The early repayment charge is calculated as a percentage of your outstanding balance at the time you repay, not the original loan amount. The exact percentage depends on how many years you've held the loan and your lender's specific ERC schedule.
ERCs typically apply when you remortgage and use the funds to clear the secured loan, sell your property, come into money and want to clear the debt, or consolidate debts with a new facility.
They don't usually apply to regular overpayments within your allowance (typically 10% of the balance per year), the death of the borrower, or moving to a new property if your lender allows you to "port" the loan.
Some lenders offer secured loans with no early repayment charges, or with shorter ERC periods than the market standard. These typically come with a different rate structure to compensate.
Is an ERC-free loan worth it? Think about your likely scenario. If there's a reasonable chance you'll repay within a few years, for example if you're expecting to sell your property, receive an inheritance, or remortgage, an ERC-free product might work out cheaper overall. If you're confident you'll keep the loan to term, a standard product is usually better value. An advisor can help you weigh this up based on your circumstances.
If you're not sure how long you'll keep the loan, ask your advisor to compare the total cost of an ERC-free product against a standard one under a few different payoff scenarios. It's often clearer than trying to guess a single 'right' answer.
The true cost of a secured loan isn't the interest rate alone. To understand what you're really paying, you need to factor in every fee alongside your repayments over the full term.
As a simple framework: total cost = total repayments over the full term + all upfront fees - any cashback. Two loans that look similar on the surface can end up costing quite different amounts once fees are added in, which is why comparing total cost matters more than comparing rates or fees in isolation.
Upfront fees across our lender panel typically range from a few hundred pounds for a straightforward, fee-free product, up to around two thousand pounds or more for a complex case involving a larger loan amount, a higher-value property, and additional legal work. Your advisor can give you a personalised total cost comparison based on the specific lenders and products available to you.
The APR (Annual Percentage Rate) is designed to show the true cost of borrowing by including mandatory fees alongside the interest rate. Comparing APRs, rather than headline interest rates, generally gives a more accurate picture of what a loan will really cost.
But APR has limitations. It assumes you'll keep the loan for the full term, and it doesn't account for optional fees or potential early repayment charges. Always check the full fee schedule alongside the APR, and ask your advisor to explain anything that isn't clear.
Your credit profile mainly affects the interest rate you're offered, but it can also affect certain fees, particularly the arrangement fee and the type of valuation required.
If you have an excellent credit history with no adverse entries, you're more likely to qualify for the most competitive products, and arrangement fees are often waived altogether. A desktop valuation may also be possible for a straightforward property.
You'll still access most lenders, though you may not qualify for fee-free products. Expect a moderate arrangement fee, with other fees at standard rates.
Your options narrow at this level. Some mainstream lenders may decline, and specialist lenders are more likely to charge higher arrangement fees. Higher, risk-based valuation fees are also possible, and broker fees may be higher for more complex cases.
If you have recent debt issues, missed payments or defaults, specialist lenders will still consider your application, but typically charge higher arrangement fees and require a full physical valuation rather than a desktop assessment. Rates for adverse credit borrowers are also higher, so it's particularly important to check the total cost of borrowing is genuinely affordable before proceeding.
If your application isn't urgent, spending a few months improving your credit score before you apply, for example by registering on the electoral roll, paying down credit card balances, and correcting errors on your credit file, can make a real difference to the fees and rate you're offered.
Some charges aren't always obvious upfront. Here's what to look for in the small print before you commit to a secured loan.
Most secured loans require buildings insurance, which you probably already have. But watch for lenders that push additional cover: payment protection insurance is never compulsory, though some lenders still offer it; some lenders reduce your rate if you take out their life insurance, so it's worth calculating whether the saving outweighs the premium; and income protection is occasionally suggested but never mandatory.
Watch for loans that require you to open a current account with the lender, take out other products such as credit cards or savings accounts, or use specific solicitors or valuers. These aren't necessarily bad deals, but always compare the total cost against loans without tie-ins.
If you're referred to a broker by another company, such as an estate agent, financial advisor or comparison site, check whether a referral fee has been added to your costs. A legitimate broker shouldn't charge you more because of how you found them.
If your application takes longer than expected, the original valuation may expire, meaning a new valuation - and another fee. Keeping your application moving and responding promptly to requests for information helps you avoid this.
Negotiating fees
A few practical steps can help you reduce the total cost of a secured loan, beyond negotiating individual fees.
Contrary to what many borrowers assume, some secured loan fees are genuinely negotiable. Get quotes from multiple lenders or advisors and use them as leverage, ask specifically whether arrangement fees can be reduced or waived, enquire about fee-free versions of products, and if you're borrowing a larger amount, ask about discounts that sometimes apply to bigger loans.
Sometimes paying a little more upfront saves money over the long term, and sometimes a fee-free product with a different rate structure works out cheaper overall. The only way to know for certain is to compare the total cost of each option over your likely term, rather than judging a product on its fee or its rate alone. This is exactly the kind of comparison an advisor can run for you.
If your application isn't urgent, spending a few months improving your credit score can reduce both your fees and your rate. Quick wins include registering on the electoral roll, paying down credit card balances well below your limit, clearing any defaults or disputes on your file, and avoiding new credit applications in the months before you apply.
As the sections above show, the lowest headline rate isn't always the cheapest loan once fees are factored in. Always ask for a total cost comparison, covering the full term, before deciding between products.
If cash flow is tight, there are ways to manage secured loan fees without necessarily paying everything upfront.
Most setup fees can be added to your loan balance instead of being paid upfront. This avoids an initial lump sum, but it increases your total debt and the interest you'll pay over time, because you're effectively borrowing the fee as well as your original amount.
Adding fees to your loan can make sense if your cash flow is tight but your income is stable, if the rate difference between adding fees and paying upfront is minimal, or if you're likely to make overpayments later that offset the extra interest. It's worth avoiding if you're already stretching affordability, if your loan term is very long, since interest on the fee compounds for longer, or if you're unlikely to make overpayments.
Some brokers offer fee payment plans, allowing you to pay a broker fee in instalments rather than at completion. Check whether interest is charged on these arrangements before agreeing to one.
If you're worried about affording a secured loan at all, speak to your advisor before you commit. MoneyHelper (moneyhelper.org.uk, 0800 138 7777) also offers free, independent guidance if you'd like to talk through your options with someone outside the lending process.
How it works
We discuss your circumstances
A quick conversation about how much you want to borrow, your property value, and your credit history, usually 10-15 minutes.
We search our panel
We compare a wide range of lenders for the most cost-effective fee and rate combination for your situation.
We present your options
You'll see full fee breakdowns alongside the rate for each option, not just a headline figure.
You decide whether to proceed
There's no obligation to continue, and no pressure to proceed with any option you're not comfortable with.
Common questions
Typical upfront fees include an arrangement fee, a valuation fee (the cost usually depends on your property's value), a broker fee if you use one, and legal fees. Not all lenders charge all of these - some offer fee-free products with a different rate structure instead. Ask your advisor for a full breakdown of the fees that apply to your specific application.
Yes, most lenders let you add the arrangement fee, and sometimes the broker fee, to your loan balance. This avoids paying upfront, but it means you'll pay interest on those fees for the rest of the loan term, which increases their real cost above the amount shown on the fee schedule. Valuation and legal fees usually need to be paid separately.
Early repayment charges (ERCs) are fees for paying off your loan before the agreed term ends. They typically work on a sliding scale that reduces each year, until they disappear entirely after a set number of years. Some lenders offer ERC-free products with a different rate structure instead. Regular overpayments within your annual allowance, typically 10% of the balance, usually don't trigger ERCs.
The lender needs to confirm your property's value to calculate the loan-to-value ratio and check there's enough equity to secure the loan safely. The valuation fee pays for a surveyor's assessment, and costs generally scale with your property's value. Some lenders offer free desktop valuations for straightforward cases.
Usually, yes. Brokers can access lenders you might not be able to approach directly, and help match you to the most suitable option for your circumstances. Rates and total costs vary significantly between lenders for the same borrower, so comparing across a wider panel can more than offset a broker fee. Always ask your advisor to explain how they're paid and what you'll receive for any fee charged.
APR (Annual Percentage Rate) includes the interest rate plus mandatory fees, such as arrangement charges, giving a more accurate cost comparison than the headline rate alone. But APR assumes you'll keep the loan to term, and doesn't include optional costs like payment protection insurance. Always check the full fee schedule alongside the APR for the complete picture.
For most secured loans, no. The lender's solicitor handles the charge registration at the Land Registry, and you simply sign the documents. Your own solicitor is typically only needed for larger loans, more complex property situations, or if you want independent legal advice, and this comes with an additional cost.
Total cost depends on your loan amount, term, rate and fees, so there isn't a single figure that applies to everyone. As a guide, upfront fees across our lender panel typically range from a few hundred pounds for straightforward cases to a couple of thousand pounds for larger or more complex applications. Speak to an advisor for a personalised total cost comparison based on your circumstances.
Some fees are negotiable. Broker fees and arrangement fees can sometimes be reduced, especially on larger loans or for applicants with an excellent credit history. Ask specifically about fee-free products or discounts on larger loans. Valuation fees, legal fees and early repayment charges are rarely negotiable, since they're set by third parties or fixed in your contract.
If you miss a monthly loan payment, expect a late payment fee, plus potential damage to your credit score. Repeated missed payments could lead your lender to start recovery proceedings, which for a secured loan means your home could be at risk. If you're struggling to pay, contact your lender immediately - they're required to work with you on solutions before taking recovery action. MoneyHelper (0800 138 7777) also offers free, independent guidance if you'd like support.
Potential additional costs to check for include re-valuation fees if your application takes too long, document copy fees, account amendment fees, and paper statement charges. Some lenders also offer optional insurance products. Read the full terms and conditions, and ask your advisor about any charges not listed in your initial quote.
Applicants with a poor credit history typically face higher arrangement fees than those with an excellent credit history, along with mandatory full property valuations rather than a desktop option, and potentially higher broker fees for more complex case handling. Rates are also higher for adverse credit borrowers, so the total cost of borrowing can be significantly higher overall.
Valuation fees are usually paid when you apply, before your application is approved. Arrangement fees, broker fees and legal fees are typically paid at completion, either from your loan proceeds or separately. If you add fees to your loan, they're deducted from your loan amount at drawdown. Monthly payments usually start around a month after completion.
Fee-free secured loans exist, but they typically come with a different rate structure to compensate the lender. Whether this works out cheaper depends on your loan amount and term, so it's worth comparing the total cost over the full term rather than just the upfront fees. An advisor can run this comparison for you.
Several factors influence your fee level: your credit history, your loan amount, your property value, which lender you use (fees vary significantly between providers), and the product type, since fee-free and standard products are structured differently. Your advisor can help you find the most cost-effective combination for your situation.
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