Secured loans
How secured loans can help you borrow more by using your property - but with important risks to consider.
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Tap into your home's value without remortgaging
A secured loan (also known as a second charge mortgage) lets you borrow money against the value of your home - without changing your existing mortgage. It's often used for big expenses like home improvements, debt consolidation, or helping out the family. Since secured loans work by using your property as collateral, you can usually borrow more at lower rates than an unsecured loan.
When might a secured loan make sense?
You don't want to change your current mortgage
Secured loans can work if you're tied into a great mortgage deal with early repayment charges or low rates you want to keep. Let's say you're locked in at 1.9% until 2027, but you need £30,000 for an extension - a secured loan lets you borrow that amount without losing the good rate.
- Tip: Check your terms before committing - some mortgage lenders allow small extra borrowing without fees.
You need to borrow more than a personal loan
Unsecured personal loans usually cap at around £25,000. Secured loans tend to offer a better option - with longer repayment terms. So if you need £50,000 to consolidate debts and pay for a loft conversion, a secured loan could offer a term of 10–20 years, keeping monthly payments manageable.
- Tip: Make sure the total cost of borrowing (including fees and interest over time) makes sense in the long run.
Home truths: what could go wrong?
Your home is at risk if you can't repay
This is the biggest difference between secured and unsecured loans. If you fall behind on your monthly repayments, the lender can take legal action to repossess your home - just like with a mortgage.
- Tip: Only borrow what you can afford to repay, and have a backup plan for unexpected changes in income.
You may end up paying more overall
Most secured loans offer lower interest rates than credit cards or personal loans, but because they're spread over many years, the total interest paid can be much higher. Borrowing £30,000 over 20 years at 6% interest may seem manageable monthly - but you could end up paying back over £51,000 in total.
- Tip: If you can afford it, consider overpaying to reduce interest and clear the loan faster.
Summing up
A secured loan can be a smart way to borrow more money while keeping your current mortgage intact. But it's not without risk - your home is on the line if things go wrong. Always weigh the long-term cost, and get advice before signing on the dotted line. Used wisely, this can be a flexible and powerful financial tool.
Frequently Asked Questions
What's the difference between a secured loan and remortgaging?
A secured loan sits alongside your mortgage, while remortgaging replaces it. If your mortgage has a low rate or early exit fees, a secured loan may be cheaper and easier. But remortgaging might still be better if you're planning to borrow a large amount and get a good rate.
What's the difference between a secured loan and remortgaging?
A secured loan sits alongside your mortgage, while remortgaging replaces it. If your mortgage has a low rate or early exit fees, a secured loan may be cheaper and easier. But remortgaging might still be better if you're planning to borrow a large amount and get a good rate.
What's the difference between a secured loan and remortgaging?
A secured loan sits alongside your mortgage, while remortgaging replaces it. If your mortgage has a low rate or early exit fees, a secured loan may be cheaper and easier. But remortgaging might still be better if you're planning to borrow a large amount and get a good rate.
How much can I borrow with a secured loan?
This depends on the equity in your home, your credit report, and your income. Some lenders offer secured loans up to £100,000 or more. In general, the more equity you have, the better your financial situation, and the lower your loan-to-value ratio, the more you can borrow - and at better rates.
How much can I borrow with a secured loan?
This depends on the equity in your home, your credit report, and your income. Some lenders offer secured loans up to £100,000 or more. In general, the more equity you have, the better your financial situation, and the lower your loan-to-value ratio, the more you can borrow - and at better rates.
How much can I borrow with a secured loan?
This depends on the equity in your home, your credit report, and your income. Some lenders offer secured loans up to £100,000 or more. In general, the more equity you have, the better your financial situation, and the lower your loan-to-value ratio, the more you can borrow - and at better rates.
Does a secured loan affect my credit file?
Yes. Like any form of credit, a secured loan affects your credit score and appears on your file. Making payments on time can help you keep a good credit score, while missed payments will damage it. Lenders will also do a credit check when you apply, which can cause a temporary dip in your score.
Does a secured loan affect my credit file?
Yes. Like any form of credit, a secured loan affects your credit score and appears on your file. Making payments on time can help you keep a good credit score, while missed payments will damage it. Lenders will also do a credit check when you apply, which can cause a temporary dip in your score.
Does a secured loan affect my credit file?
Yes. Like any form of credit, a secured loan affects your credit score and appears on your file. Making payments on time can help you keep a good credit score, while missed payments will damage it. Lenders will also do a credit check when you apply, which can cause a temporary dip in your score.
Could I pay off a secured loan early?
Yes, but you may face early repayment charges, depending on the terms of your agreement. Some lenders allow overpayments or early settlement without a penalty, while others charge a fee. Always check the small print, and ask your lender for a "settlement figure" before paying off early.
Could I pay off a secured loan early?
Yes, but you may face early repayment charges, depending on the terms of your agreement. Some lenders allow overpayments or early settlement without a penalty, while others charge a fee. Always check the small print, and ask your lender for a "settlement figure" before paying off early.
Could I pay off a secured loan early?
Yes, but you may face early repayment charges, depending on the terms of your agreement. Some lenders allow overpayments or early settlement without a penalty, while others charge a fee. Always check the small print, and ask your lender for a "settlement figure" before paying off early.
Can I get a secured loan with bad credit?
It's possible. Because the loan is secured against your home, some lenders may be more flexible with poor credit histories. But you may pay interest at a higher rate, and not all lenders will accept your application. A credit broker can help you find the right deal - and whatever you can do to build a good credit history will be worthwhile.
Can I get a secured loan with bad credit?
It's possible. Because the loan is secured against your home, some lenders may be more flexible with poor credit histories. But you may pay interest at a higher rate, and not all lenders will accept your application. A credit broker can help you find the right deal - and whatever you can do to build a good credit history will be worthwhile.
Can I get a secured loan with bad credit?
It's possible. Because the loan is secured against your home, some lenders may be more flexible with poor credit histories. But you may pay interest at a higher rate, and not all lenders will accept your application. A credit broker can help you find the right deal - and whatever you can do to build a good credit history will be worthwhile.
About the author
Lawrence Howlett
Lawrence Howlett brings a results-driven mindset to his writing, shaped by over a decade of experience across finance, legal, and energy sectors. As the founder of Moneysavingadvisors, he’s built a reputation for turning complex financial concepts into clear, actionable insights for consumers. His writing stands out for its clarity, structure, and focus on delivering value.
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