Homeowner loans

What are homeowner loans?

A homeowner loan is a type of credit secured against the value of your property. It allows you to use the value of your home as a guarantee you’ll be able to repay a loan by putting up your property as an asset.

How do they work?

A homeowner loan works like a mortgage - the amount you borrow is secured against the value of your home. You’ll pay off the loan each month over an agreed timeframe.

Benefits of choosing a homeowner loan

Lenders tend to offer more favourable terms on a homeowner loan than with unsecured loans. This is because they view the customer as a lower risk, as the borrower has secured the loan against their home.

It means you may be offered lower interest rates and more choice over the duration of your loan, meaning a more manageable monthly repayment.

Risks of a homeowner loan

Although putting your home up as collateral for a loan tends to increase your chances of landing better terms, this is a huge decision that requires a big commitment and careful consideration.

If you fail to meet the repayments, your home may be used to recover the outstanding debt by lenders, so it’s vital you ensure you can afford the repayments before you apply for a homeowner loan.

Is a homeowner loan right for me?

Taking out a homeowner loan is a big decision that shouldn’t be made lightly. Make sure you consider the ins and outs of this type of loan to ensure it is a good fit.

Are the terms right for me?

Before you apply, you should be confident that you can manage monthly repayments. It’s especially important with loans for homeowners considering you’re putting up your property as a form of collateral.

You may find another type of loan to be more suitable.

Can I afford the repayments?

Think about your typical monthly income and outgoings. If your circumstances were to change, could you still afford the repayments? With the amounts of money involved in a secured homeowner loan, it can take many years to repay, so you want to be sure you can afford your payments before you commit.

Am I eligible for a homeowner loan?

So long as you own all or part of your own home, you could be eligible. Even if you’re applying with poor credit or CCJs, or are self-employed or retired, we can help find the right loan for you. Our guide to loan eligibility can help you find out more.

What do I need to apply for a homeowner loan?

Before you apply for a homeowner loan, use our homeowner loans calculator to see what your repayments may look like.

Once you’ve chosen how much you wish to borrow, and for how long, you can begin your application online. As well as your most recent mortgage statement, make sure you have all the following details to hand:

• Name and address
• Employment status
• Details of your income

Representative example

SECURED LOANS - Rates start at 3.37% variable. Our range of products offers rates up to 65.2%, meaning we have the ability to help you find a loan that meets your personal needs and circumstances.

Representative example: Borrow £10,000 over 10 years at an Annual Interest Rate of 5.14% (variable) and you would make 120 payments of £122.71 per month.

The total amount repayable will be £14,725.20. This total includes a lender fee of £495 and a broker fee of £1,000, which have been added to the loan. Overall cost for comparison is 8.6% APRC representative. Maximum APR is 65.2%.

Commonly asked questions about homeowner loans

There’s a lot to consider when it comes to homeowner loans, from bad credit ratings and employment status to repayment periods.

Can I move house with a homeowner loan?

Yes, you can move house while still paying off a homeowner loan. However, you’ll need to pay off the outstanding loan balance. Some lenders may allow you to transfer the loan to your new property.

How much can I borrow against my home?

The maximum amount you can borrow against your home will depend on the amount of equity you hold in the house. This is determined by your home’s value and the percentage of that value the lender is willing to accept less any existing mortgage balance on your property. See our guide to things to consider before you apply.

Loan details

• How long will it take?
  Once you apply for a loan, you’ll receive a decision in principle. The loan will then be finalised within about two weeks of applying.

• How long are the repayment terms?
  Repayment terms are flexible. We offer short term loans for homeowners which start from as little as one year, as well as long-term products which can last 30 years. The most important thing is that you’re comfortable with the time period.

• What are the interest rates?
  While homeowner loan rates can be as low as 2.9%, the rate you secure will depend on your history of personal finances and your current circumstances.

• Are there any loan fees?
  We’re a broker, not a bank, so we search a full comparison across lenders’ products to see how they stack up. Once a loan is secured, we take a commission payment from the lender and we may also charge a broker fee. This is charged at up to 12.5% of the loan itself, to a capped figure of £3,995. If a loan is unsecured, we won’t charge a broker fee.