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Secured Loans
Most UK homeowners can borrow between £10,000 and £500,000 with a secured loan, depending on your available equity, income, and credit history.
Most UK homeowners can borrow between £10,000 and £500,000 with a secured loan, though your personal maximum comes down to three things: how much equity you have in your property, whether your income can support the repayments, and your credit history.
Your realistic maximum is whichever of these limits is lowest, not simply the largest figure any one of them allows on its own. Speak to an advisor for a clear picture of what you could borrow based on your own circumstances.
How much you can borrow with a secured loan depends on your property, your income, and your credit history working together. A secured loan, also known as a homeowner loan or second charge mortgage, lets you borrow money using your property as security. This is different from an unsecured loan, which doesn't require collateral and is typically used for smaller or shorter-term borrowing.
Because a secured loan is backed by your property, lenders take on less risk. That's typically why secured loans offer lower interest rates and higher borrowing limits than unsecured loans, though it also means your home is at risk if you don't keep up repayments.
Your borrowing limit is set by two separate caps, and whichever one comes first determines what you can actually access:
Working out how much you can borrow with a secured loan means looking at both limits together, not just the largest figure either one allows on its own.
Eligibility
Your equity is the portion of your property you own outright: your home's current value minus any outstanding mortgage. Lenders use this figure to set your maximum borrowing ceiling, because it forms the security behind your secured loan.
Here's how the calculation works in practice:
Most lenders cap combined borrowing (your mortgage plus the secured loan) at 85% loan-to-value (LTV). Using the example above:
The more equity you have, the more you can typically borrow, because it gives the lender more security. Some specialist lenders offer higher LTV ratios of up to 90% or even 95%, but these usually come with stricter criteria and are reserved for borrowers with strong credit profiles.
Your available equity isn't fixed. Several factors influence how much of it lenders will actually recognise.
Property valuation: lenders arrange their own independent valuation rather than accepting your estimate. Some use a desktop valuation, an automated online assessment, for smaller loans, though larger or unusual properties often need a full physical appraisal. If your home values lower than expected, your equity and borrowing limit drop accordingly.
Outstanding mortgage balance: check your latest mortgage statement for your exact outstanding amount, including any fees or early repayment charges that might be added to the balance.
Property type: standard houses and flats typically qualify for the full loan-to-value limit. Non-standard construction, such as steel frame, timber frame, thatched roofs, or concrete prefab, often faces reduced limits because fewer lenders accept these property types.
Location: properties in areas with slower market activity, or those considered harder to sell, may face lower loan-to-value caps. This can affect rural properties, high-rise flats above certain floors, and properties in flood-risk areas.
Don't rely on your own estimate of your property's value. Lenders arrange their own valuation, and we've seen properties value 5-15% below the owner's expectation, particularly in slower market conditions. That can shift your equity limit more than people expect.
Even with substantial equity, lenders won't approve borrowing that stretches your finances beyond a sustainable level. The Financial Conduct Authority requires all secured lenders to carry out detailed affordability assessments, examining your financial situation to check you can maintain payments throughout the loan term.
Lenders look at your regular income against your committed outgoings. You'll need to provide proof of income, such as payslips, bank statements, or accounts depending on your employment status, to demonstrate financial stability and repayment capacity. Most lenders want your total housing costs, including your mortgage and the new secured loan payment, to stay below 40-45% of your net monthly income.
For example, if your net monthly income is £3,800, a lender might set your maximum housing costs at around £1,710 (45%). Subtracting your current mortgage payment leaves the amount available for a new secured loan payment. This remaining capacity, combined with the interest rate and term you're offered, sets your affordability-based borrowing limit. An advisor can talk you through what that means in loan terms based on current rates.
Employed income: lenders typically ask for your three most recent payslips and sometimes a P60. They'll use your basic salary, though some include regular overtime, commission, or bonuses at a reduced value.
Self-employed income: most lenders want two years of accounts or tax returns, using an average of your declared income. Some specialist lenders accept one year for established businesses. Directors typically need SA302 tax calculations plus company accounts.
Pension income: retirement income from a state pension, private pension, or annuity counts fully toward affordability. Maximum ages at loan maturity vary by lender, typically between 75 and 85.
Benefit income: certain benefits count toward affordability, including disability benefits, child benefit, and tax credits. Jobseeker's allowance and other unemployment benefits typically don't qualify.
Rental income: if you own buy-to-let properties, rental income may partially count toward affordability, usually at a reduced percentage to account for void periods and costs.
Lenders don't just check whether you can afford payments at today's rates. They stress test your affordability against potential interest rate rises, modelling what would happen if rates increased, to check you'd still manage the payments if your loan has a variable rate component.
This occasionally stops borrowers accessing amounts that look affordable based on current rates alone. It's frustrating when it happens, but it protects you from a payment shock if rates rise later.
Not sure where you stand?
An advisor can walk through your equity, income, and credit profile together to give you a realistic maximum, rather than a generic estimate.
Your credit profile affects secured lending in two distinct ways: whether lenders will consider your application at all, and what interest rate they'll offer. Lenders will check your credit history, including any county court judgments, to assess your overall creditworthiness and borrowing history.
If you have a poor credit history, including CCJs or missed payments, you may still be eligible for a secured loan because the property reduces the lender's risk. However, you're likely to face a higher interest rate or a lower maximum loan-to-value.
Secured loans are available across a wide range of credit profiles, but your score has a significant impact on the interest rate you're offered, and therefore on how much a given monthly payment will actually borrow. Someone with an excellent credit history will typically be offered a considerably lower rate than someone with a poor credit history, which can add up to a large difference in overall cost over a long loan term.
Missed payments: a recent missed payment (within the last 12 months) carries more weight than an older one. A single missed payment from three years ago rarely affects an application, but multiple recent misses can limit your options significantly.
Outstanding debt: a high level of existing debt relative to your income concerns lenders even if you've never missed a payment. If your credit cards and loans already take up a large share of your income, lenders may reduce your maximum borrowing.
Adverse credit history: people with more serious credit issues still have options through specialist lenders, though expect a higher interest rate and potentially more restrictive terms.
No credit history: having no credit history at all can be almost as challenging as having a poor one, because lenders can't assess your payment reliability without evidence. Building some credit history before you apply can help you access better options.
If your credit isn't where you'd like it to be, a few steps can improve your position before you apply:
Bringing equity, affordability, and credit profile together helps you work out a realistic maximum borrowing figure, rather than relying on any single number in isolation.
Find your property's approximate value (recent sales of similar nearby properties or online tools can help, though the lender's own valuation may differ). Subtract your outstanding mortgage, then multiply the result by 0.85 for standard lenders, or 0.75 if you expect any complications.
Take your monthly household net income and subtract all your committed outgoings (mortgage, loans, childcare, insurance). The amount left over is your maximum monthly capacity for a new secured loan payment, though lenders typically want to see some buffer built in.
Your affordability-based maximum then depends on the interest rate and term you're offered. An advisor can talk you through this using current rates for your circumstances.
Your realistic maximum is whichever figure is lower, not the largest one either limit produces on its own. If your equity and affordability limits come out close together, you're likely to access something close to your maximum. If one is significantly lower than the other, it becomes the deciding factor, even if the other limit alone would allow much more.
If your credit history includes adverse items, apply a further reduction. Specialist lenders for adverse credit often cap loan-to-value at a lower level than mainstream lenders, and a higher interest rate reduces how much the same monthly payment will actually borrow.
Beyond equity, affordability, and credit profile, several other factors influence how much a lender will offer. Different lenders weigh these factors differently: some focus more on the property itself, while others place more weight on your income, so your options can vary depending on which lender you approach.
Home improvements: generally viewed positively, since they can increase your property's value and offset some of the lender's risk. Lenders may accept a slightly higher loan-to-value for substantial renovation projects.
Debt consolidation: common and accepted, though lenders will examine your existing debts carefully to check consolidation genuinely improves your financial position, rather than simply freeing up credit you might use again.
Business purposes: some lenders won't offer secured loans for business use at all. Those that do often ask for more documentation and may cap amounts more conservatively.
Tax payments: using a secured loan to cover a tax bill is increasingly common. Lenders generally accept this but will look closely at your accounts to understand why the debt arose.
Standard construction: brick or block-built properties with a conventional roof qualify with virtually all lenders.
Non-standard construction: properties built with steel frames, timber frames, concrete panels, or other non-traditional methods face a more limited choice of lenders and potentially a lower maximum loan-to-value.
Flat position: ground floor and lower-level flats typically qualify with all lenders. High-rise flats above a certain floor (this varies by lender, often the 6th or 10th) can face restrictions, as can some flats above commercial premises.
Condition issues: properties needing significant repair work may face a reduced valuation or extra conditions before the loan completes.
Lease length: leasehold properties need enough remaining lease, typically 70 or more years at the end of the loan term. Short leases restrict your options significantly.
Age discrimination on its own is prohibited, but practical considerations still affect older borrowers. Most mainstream lenders require the loan to complete before you reach 75-80, so if you're 65 and applying for a 20-year term, you'd need a lender that accepts completion at age 85.
Specialist later-life lenders exist with higher age limits, some accepting applications into your late 70s with terms extending beyond age 90. These lenders tend to focus on sustainable retirement income rather than employment earnings.
Lenders prefer income that's likely to continue throughout your loan term. Permanent employment puts you in a strong position. Fixed-term contracts can work if you have a history of renewal or hold in-demand skills, though a probationary period may mean waiting until you're confirmed in post.
A recent job change can complicate an application even with higher income. Many lenders want to see 3-6 months in your current role, though this varies.
Seeing how equity, affordability, and credit interact in real scenarios helps illustrate what's realistic. The figures below are illustrative only, since your own maximum depends on the lender, product, and rates available when you apply.
Profile: £400,000 property, £150,000 mortgage, household income £6,500 a month, excellent credit.
This borrower has substantial equity, but their affordability caps borrowing slightly below their equity limit. They're in a strong position for a competitive rate.
Profile: £280,000 property, £160,000 mortgage, household income £4,200 a month, good credit.
For this borrower, equity is the limiting factor. Both caps sit close together, so they're likely to access something near their maximum with a good lender match.
Profile: £350,000 property, £280,000 mortgage, household income £5,000 a month, fair credit.
This borrower's high existing mortgage leaves limited equity. Despite a decent income, the equity constraint caps borrowing at under £20,000. They'd need to either pay down their mortgage or wait for property value growth to access more.
Profile: £300,000 property, £120,000 mortgage, household income £4,800 a month, poor credit with settled debts from three years ago.
A higher interest rate for adverse credit significantly reduces what their monthly payment capacity translates to in borrowing. Even so, £70,000 remains accessible, which might well meet their needs.
Understanding how much you can borrow is only half the picture. It's just as important to understand what that borrowing costs, beyond the headline interest rate.
Taking out a secured loan typically involves several upfront costs. These can include a broker fee, a lender fee for arranging the loan, and sometimes a valuation fee. It's worth factoring all of these into any comparison between deals.
A realistic total for setup costs sits between £1,000 and £3,000 for most applications, though complex cases or larger loans may cost more.
Secured loans typically run from 3 to 30 years. A longer term spreads the cost and lowers your monthly payment, but you'll pay more interest overall because interest keeps accruing for longer. A shorter term means a higher monthly payment but less interest paid in total.
Most secured loans include early repayment charges (ERCs) for the first one to five years. These typically run at 1-5% of the outstanding balance and apply if you repay the loan during this period. For example, a £75,000 loan with a 3% early repayment charge in year one would cost £2,250 to repay early.
Check the ERC terms carefully before committing, especially if you might sell your property, come into money, or refinance within the early years.
Before deciding how much to borrow, it's worth being clear-eyed about the genuine risks of secured lending. Because a secured loan is backed by your property, lenders take on less risk than they would with unsecured borrowing, which is often why they can offer larger amounts and lower interest rates. The more equity you have, the less risk the lender faces, which can lead to better terms.
This isn't hypothetical. If you can't maintain your payments, the lender has the legal right to repossess and sell your property to recover what's owed. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
The secured loan lender takes a second charge behind your mortgage, meaning your mortgage lender is paid first from any sale proceeds, then the secured loan lender. Repossession typically only happens after extended payment difficulties and failed attempts to reach an arrangement, but it remains a real possibility throughout your loan term. It's worth asking yourself honestly whether you could maintain payments if your income dropped significantly.
If you're worried about keeping up with payments on any debt, free and impartial guidance is available from MoneyHelper at moneyhelper.org.uk or by calling 0800 138 7777.
Many secured loans have a variable interest rate, meaning your payments can increase if the Bank of England base rate rises. Fixed-rate secured loans exist but are less common and may carry a higher initial rate.
If your loan has a variable rate, it's worth stress testing your own budget: could you still afford your payments if the rate increased by 2-3%? Speak to an advisor about how a rate rise could affect your specific circumstances before you commit.
Borrowing against your home equity reduces your financial flexibility for the life of the loan. That equity isn't available for other purposes, it can be harder to relocate if the loan pushes you toward negative equity, and your options narrow if your circumstances change. This matters particularly for longer loans: a 25-year term locks up equity for a substantial part of your working life, and potentially into retirement.
For smaller amounts, an unsecured personal loan may actually cost less overall, despite a higher interest rate, because it's typically repaid over a much shorter term. Unsecured borrowing also avoids setup costs and doesn't put your property at risk.
As a general rule, secured borrowing tends to make more financial sense for amounts above £25,000-£30,000, where unsecured options either aren't available or come with a much higher interest rate. For smaller amounts, it's worth asking an advisor to compare both routes before deciding.
Whatever amount you borrow, securing a competitive interest rate makes a real difference to your overall cost. A strong, well-managed credit profile puts you in a better position to be offered a lower rate, because lenders see you as a lower risk.
Secured loan rates vary considerably between lenders, and the right rate for your circumstances depends on your specific profile. A broker searches across multiple lenders to find suitable matches, rather than approaching just one.
We compare a wide range of lenders, including mainstream providers and specialists for more complex circumstances. That breadth means we can often find options that a direct-only search would miss.
When comparing secured loan quotes, make sure you're comparing like with like:
Why use a broker
Secured loans are arranged against your property's equity, with a registered charge at the Land Registry. To qualify, you'll generally need to be a homeowner with sufficient equity in your property, at least 18 years old, and a UK resident.
Here's what the process typically looks like when you apply through Money Saving Advisors. The whole process usually takes 3-6 weeks from initial enquiry to funds reaching your account, though complex cases can take longer.
How it works
Initial conversation
We'll discuss your borrowing needs, property situation, income, and any credit concerns. This helps us understand which lenders might suit your circumstances.
Soft search
With your permission, we'll run a soft credit check that doesn't affect your credit score. This confirms your credit position and lets us give you a realistic indication of your options.
Lender matching
We compare a wide range of lenders to find suitable options, presenting the best matches with clear explanations of rates, terms, and total costs.
Full application
Once you've chosen a lender, we handle the application process, including gathering documentation and liaising with underwriters on your behalf.
Valuation and completion
The lender arranges a property valuation, and once approved, solicitors handle the legal completion. We stay in touch throughout to answer any questions.
Common questions
The absolute maximum with some lenders reaches £500,000 or even higher for exceptional circumstances. But most borrowers access between £10,000 and £250,000 based on their equity and affordability. Your personal maximum depends entirely on your property equity, income, and credit profile rather than any universal cap.
No. Lenders typically cap total borrowing (mortgage plus secured loan) at 85% of your property value, meaning you must retain at least 15% equity. Some specialist lenders offer up to 90-95% loan-to-value, but these require a strong credit profile and come with a higher interest rate.
You don't need a deposit in the traditional sense. Instead, you need available equity in your property. The minimum usable equity required varies by lender, but typically starts around £15,000-£20,000 after accounting for loan-to-value limits.
Yes, but perhaps not how you'd expect. Your credit score primarily affects the interest rate you're offered rather than your maximum loan amount. However, a higher rate for poor credit means the same monthly payment will actually borrow less. Adverse credit can also limit you to specialist lenders, who may cap loan-to-value at a lower level than mainstream lenders.
No. Your total borrowing (existing mortgage plus secured loan) can't exceed 85-95% of your property's value, depending on the lender. This protects both you and the lender from a negative equity situation, where you owe more than your home is worth.
Standard applications take 2-6 weeks from application to funds. Straightforward cases can sometimes complete faster, especially with a desktop valuation rather than a physical visit. If you need funds within days rather than weeks, a credit card or bridging loan might be more appropriate.
Initial eligibility checks use a soft search that doesn't affect your credit score. A hard search only appears on your credit file if you go ahead with a full application. Multiple hard searches in a short space of time can temporarily lower your score, which is one reason it helps to use a broker who can check eligibility across several lenders with a single soft search.
Most secured loans allow early repayment, though many include an early repayment charge during an initial period, typically one to five years. This charge often equals a couple of months' interest. After that period ends, you can usually repay without penalty, but always check the specific terms of any loan you're considering.
Essentially, yes. A secured loan is technically a second charge mortgage - a second mortgage that sits behind your main mortgage. The terms are often used interchangeably.
Contact your lender straight away if you're struggling. They're required to work with you on solutions before taking enforcement action, which might include a payment holiday, reduced payments, or a term extension. Only after prolonged default would a lender typically pursue repossession, and even then you have rights, including court involvement and time to sell voluntarily. If you're worried about keeping up with repayments, MoneyHelper (moneyhelper.org.uk or 0800 138 7777) offers free, impartial guidance.
Yes. You'll typically need 2-3 years' accounts or SA302 tax calculations, though some lenders accept one year's trading with strong figures. Limited company directors need evidence of salary and dividends drawn, and income assessment methods vary between lenders.
Yes, secured loans are often more accessible than unsecured products for people with adverse credit histories, because the property security reduces the lender's risk. Specialist lenders will consider applications with past missed payments, defaults, or even a debt management plan, though rates are typically higher than for those with a clean credit history. Speak to an advisor about the options available for your circumstances.
A secured loan sits as a second charge behind your mortgage, while remortgaging replaces your existing mortgage with a new, larger one. Remortgaging might offer a lower rate, since first-charge mortgages are typically cheaper than second-charge borrowing. But remortgaging may trigger an early repayment charge on your current mortgage, and the new rate would apply to your entire borrowing, not just the new amount. A secured loan keeps your mortgage separate, which can be an advantage if you have a good mortgage rate locked in.
Secured loan rates typically run higher than mortgage rates, because the lender takes a second position behind your mortgage lender. If your property sold at a loss, the mortgage lender would be paid first. This additional risk is reflected in the rate, though secured loan rates remain substantially lower than typical unsecured personal loan rates for similar circumstances.
Most purposes are accepted, including home improvements, debt consolidation, vehicle purchases, weddings, tax bills, and other large expenses. Some lenders restrict business use, gambling-related purposes, or overseas property purchases. Always confirm acceptable purposes with your lender before applying.
What our clients say
Shortly after I spoke with Anna, she was also very helpful and made it effortless and a nice experience.
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Thrilled to share my exceptional experience with Money Saving Advisors. The website made it incredibly simple and easy to connect with an advisor. They helped me find the best deal on my remortgage and secured a very competitive interest rate!
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Secured Loans
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