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Homeowner Loans

  • £5,000 - £250,000+
  • Rates start at 3.65%
  • Choose from 600+ plans
  • 95+% LTV available
  • Poor Credit OK
  • 5★ broker partner

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Borrow from £5,000 to £250,000+

Finding You the Right Loan

If you own your home (and have a mortgage) then a homeowner loan could:

Our lenders only work through brokers. Our relationship with the UK's leading broker means you'll get great service and access to over 600 different home owner loans.

Our lenders offer many loans that may suit people with bad credit ratings.

Why consider a Homeowner Loan?

There are a number of reasons why a homeowner loans (sometimes called secured loans) could be of interest to you:

Homeowner Loan or Remortgage?

Compared to a remortgage homeowner loans have a number of advantages:

  • there are no-upfront fees when you apply (e.g. valuations)
  • it can be quicker to arrange
  • you won't jeopardise your "unbeatable" mortgage rate
  • self-employment is more acceptable
  • any historical credit issues may not be so problematic

Homeowner Loan or a Personal Loan?

Homeowner loans have a number of advantages over an unsecured personal loan:

  • you could borrow a much larger sum (subject to there being sufficient equity1 in your home)
  • interest rates are often lower because of the security the home offers the lender
  • you can choose a longer repayment period to help reduce your monthly payments

Before you use a loan secured on your property make sure you understand the implications.


1 this is the value of your home over and above the amount of your mortgage outstanding. For instance your home may be worth £250,000 and your remaining mortgage is £100,000. This means the equity in your home is £150,000.

How do Secured Homeowner Loans work?

When you borrow using one of these loans it is secured against your property. This means that should you have difficulties repaying the loan the lender can, as a worst case, sell your property to recover the amount owing. So this is not a decision to take lightly. But this security does reassure the lender and does mean you may be able to borrow in situations where an unsecured loan would not be possible. 

We have access to lenders who in principle are able to lend very large sums of money. But the amount you can actually borrow depends on a number of criteria:

  • You must own the property you live in.
  • You must have a mortgage on your property - more info
  • Your property must be worth more than the balance of your mortgage - i.e. you must have equity in your property.
  • The lender will set a maximum loan value as a proportion of the value of your property (i.e. the max LTV- more info
  • You must be able to demonstrate that you can afford the repayments for the loan value you need
  • Your credit history will have an influence on the lending decision

See an example of how these "rules" are applied.

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The Cost of your Homeowner Loan

What APR% will you pay? The rate of interest will typically depend on:

  • the amount you want to borrow
  • the loan repayment period
  • your specific credit rating
  • the amount of free equity1 in your home - the larger this is relative to the amount you want to borrow the lower the interest rate should be.

Obviously you need to consider not only the APR% but also the repayment period as these two things determine the total cost of borrowing. You can ask the lender for a number of quotes based on different loan amounts and repayment terms to see the effect and judge how it fits within your monthly budget.

1 This is the value of the property less the amount owed on it (mortgages, and other secured loans).

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Homeowner Loans if you have Bad Credit

If you own your home and have a mortgage then you may find that a bad credit homeowner loan is the way to obtain affordable credit if you have a credit problem. As part of the arrangement the lender uses your home as security for the loan - which is why you need to own your home. This lowers the risk to the lender who should therefore offer you a lower APR% than they would for an unsecured loan.

We work with a very broad range of homeowner loan lenders and together they offer 600+ loan products many of which will accommodate you if you have a bad credit rating.

But before you go any further you should consider:

  • if an unsecured loan product would suit you better - you're not putting any assets at risk
  • if you should be borrowing at all if you've had credit issues recently or foresee income/employment problems

The reason is that if you use your home as security and then fail to make repayments then the lender can take possession of your property and sell it to recover the debt.

It's worth getting a quote to see how the repayment compare to an equivalent bad credit unsecured loan. Make sure that:

  • you only borrow the amount you need and no more
  • you don't over extend the repayment period as you'll end up paying more interest than you need to
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More Information about Home Owner Loans

What is a Homeowner Loan?

A homeowner loan is a loan where the lender requires an asset as security. In this case the security is your property. So, to get one of these loans you need to own your home, hence the name. They are also called secured loans. Compared to an usecured loan:

  • you can borrow larger sums e.g. the typical loan value is c.£30,000 but much larger loans are available
  • repayment can be made over an extended time frame e.g. 10 - 20 years
  • it may be easier to obtain a loan if you have a poor credit history (because of the security you provide the lender).
What are the criteria for getting a homeowner loan?

These are the general critieria you need to satisfy to be able to get one:

  • own the home you live in
  • have a mortgage on that property
  • have equity in the property (i.e. property value more than the mortgage balance outstanding)
  • ensure the loan you want is no more than the equity available and fits the LTV rules
  • demonstrate that you can afford the repayments

You will also get the best rates if you ensure your credit history is as correct as possible. There may be issues that you can fix quickly.

Why do I need to have a mortgage?

Homeowner loans are known as "second charge" loans. They can only be used if there is already a "first charge" loan on the property i.e. a mortgage. If you own your property outright (i.e. don't have a mortgage) then, by definition, you cannot obtain one of these loans. In this situation the way to access the value of your property is through a remortgage.

Loan to Value (LTV) - how lenders set the upper loan limit

LTV defines the maximum lending (mortgages + secured loans) allowed against a property's market value. It is the ratio of maximum lending value to the property value. e.g. if the LTV is 50% and the property value is £200,000 then the maximum lending permitted is £100,000

Lenders have different homeowner loan products which have different maximum LTVs. As the maximum LTV increases they tend to raise the interest rate on those loans. This is because they judge that the riskiness of the loan to have increased. They have to consider their risk exposure should property prices fall.

How lending rules are applied

Here is an example of how LTV, mortgage values and a lender's attitude to risk come together:

To manage their risk a lender could set their LTV on a loan to 75%. If your home is worth £250,000 then the maximum total lending against the property (first + second charge loans) would be £187,500. If you already have a mortgage of, say, £120,000 then this is deducted from the £187,500 giving a balance of £67,500 available to play with.

But the lender may not offer you £67,500 even if the product's terms might suggest it. The lender must assess the affordability of loan repayments, and also judge your credit risk profile by taking into account your credit history. This is all part of their responsible lending policy. All lenders have a duty to lend responsibly.

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How do I get a homeowner loan?

The path to your loan is as follows:

  • Decide how much you need to borrow, and how long you need it for (i.e. making sure the loan repayments are affordable)
  • Ensure the loan you want fits the loan to value rules. Is the loan less than the value of your property minus the amount outstanding on your mortgage?
  • Make sure that your credit report is as correct as possible
  • Make a free enquiry to get your loan quotes
  • Select the quote you want
  • The lender will then process your application, and:
    • check your credit file
    • check your property's ownership and the property's value
    • ensure you can afford the repayments
How quickly can I get the loan?

There is more paperwork required to set up a homeowner loan than a personal loan. The lender needs to check property ownership, get the property valued etc and this takes time. While lenders will always work as fast as they can, and have speeded up the process in recent years, you should expect a period of 3-5 weeks before you will receive your loan.

Can I use my loan for anything I like?

You may think that these loans for homeowners have to be used on your home. This isn't the case at all. You can use the loan to release the hidden equity in your home for anything you like (e.g. debt consolidation, home improvements, etc).

Can it make sense to consolidate my existing debt?

The average unsecured personal debt in the UK stands at around £3200 per adult. That's the average with many people owing considerably more than that! Unsecured personal debt includes credit cards, payday loans, car finance, overdrafts, and other unsecured loans. Much of this type of debt is very expensive to service - i.e. high monthly interest charges.

Do you have expensive unsecured debt? If you are living in a home you own and it is worth more than any mortgage you have on it then you may be able to consolidate the debt. This means swapping the expensive debt for a cheaper homeowner loan. The interest rate should be lower and you can, with care, potentially extend the repayment period to reduce your monthly costs even further. But keep in mind that you would be putting your home at risk if you failed to keep up the repayments on that loan.

Are there any disadvantages to using a homeowner loan?

While there can be significant benefits (see above) from electing to use a homeowner loan for your finance the main thing to be aware of is that you are securing your loan on your property. This means that if you are unable to meet your repayment obligations to the lender in the worst case you could lose your home.

The other thing to be aware of is that if you have one of these loans and then want to move house things may be more complicated as a result.

What are the alternatives to a homeowner loan?

This depends on the amount you want to borrow. For sums less than £25,000 you could consider a personal loan and for anything more than that your main option will be to remortgage.

I have had financial problems. Will this affect my application?

If you have sufficient equity in your home, have a reliable income and can afford the repayments then a previous credit problem should not necessarily prevent you from getting a homeowner loan. Because this type of loan is secured on your property the lender has already offset much of the risk. We also have access to lenders who offer special bad credit plans.

However, as with all credit the better your credit rating the better the deals you are likely to be offered. So it makes sense to make sure that your credit file is as correct as possible.

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Homeowner Loans Info

Rates from 3.65% APR*

* Actual rate will depend on personal circumstances and credit assessments. To find out what rate you can get apply below. The current Representative APRC is 9.1%, including lender and broker fees.

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