Lower your monthly outgoings — or raise the money you need. Or both.
If you own your home and have equity built up, you might be able to borrow against it — often at lower rates than a personal loan, and without changing your existing mortgage.
Your Home Equity
Example: £450,000 property
Could a homeowner loan suit your situation?
Here’s a quick way to see whether this type of borrowing might work for you.
It could work well if…
- You own your home with a mortgage and have built up some equity
- You’re looking to borrow more than £10,000 — especially over £25,000
- You’re on a mortgage rate you’d rather keep
- You’d face early repayment charges if you switched mortgage
- You’d like to bring debts together but your mortgage lender won’t allow it
- You’d prefer manageable monthly payments over a longer term
You might want to consider other options if…
- You only need a small amount (under £10,000) — a personal loan might be simpler
- Your current mortgage deal is ending soon — remortgaging could give you a better overall rate
- You have very little equity left in your property
- You’re renting or don’t have a mortgage on the property
- You need the money very quickly (completion typically takes 2–4 weeks)
- You’re not comfortable securing borrowing against your home
Not sure? That’s okay
Answer a few questions and we’ll show you whether you might be eligible — and what options could be available. It won’t affect your credit score.
How does a homeowner loan compare?
Here’s how homeowner loans compare to other ways of borrowing.
| Feature | Homeowner Loan You are here | Remortgage | Personal Loan | Credit Card |
|---|---|---|---|---|
| Typical amount | £10k – £1.5m | £10k – £1m+ | £1k – £25k | £500 – £15k |
| Typical APR | 6.9% – 15% | 4% – 7% | 7% – 29% | 19% – 39% |
| Secured against home | Yes (2nd charge) | Yes (1st charge) | No | No |
| Keeps current mortgage | Yes | No — replaces it | N/A | N/A |
| Typical term | 3 – 30 years | 2 – 35 years | 1 – 7 years | Revolving |
| Speed to funds | 2 – 4 weeks | 4 – 8 weeks | 1 – 5 days | Instant |
| Bad credit options | Yes — specialists | Limited | Very limited | Very limited |
Homeowner loan
Often a good option if you need £10k+ and want to keep your current mortgage deal. Commonly used for debt consolidation.
Remortgage
Worth considering if your deal is ending soon, or rates have dropped since you fixed.
Personal loan
Could work better for smaller amounts (under £10k) if you have good credit and don’t want to use your home as security.
Credit card
Usually best for short-term borrowing you can pay off quickly, or 0% balance transfer offers.
How much could you borrow?
It depends on your equity and how much of your home’s value lenders are willing to lend against (called loan-to-value, or LTV).
What you’ll typically need
- A mortgage on your property — the homeowner loan sits alongside it as a second charge
- Enough equity to borrow against (usually at least 15–20%)
- Proof of income and affordability
- A UK residential property (not buy-to-let)
What lenders typically offer
Maximum borrowing
Some specialist lenders go up to 95–100% LTV if you have good credit and strong affordability.
Standard borrowing
Most mainstream lenders sit here. A good range of rates for most credit profiles.
Best rates available
Even with credit issues, you can often borrow at this level. This is where the most competitive rates tend to be.
What do people use homeowner loans for?
They’re flexible — here are the most common reasons people take one out.
Debt consolidation
Bring credit cards, loans and other debts together into one monthly payment that could be lower.
Home improvements
Fund extensions, renovations, new kitchens or bathrooms, or energy-efficiency upgrades.
Large purchases
Buying a car, caravan, holiday home, or making other significant purchases at lower rates.
Tax bills
Cover unexpected tax demands or spread a large tax bill into manageable monthly payments.
Business investment
Raise capital for a business venture, equipment, or start-up costs at competitive rates.
Other purposes
Wedding costs, school fees, helping family members, or any other large expense.
Here’s how the process works
From your first enquiry to receiving funds, it typically takes 2–4 weeks.
Have a quick chat
Answer a few questions about your property and what you’re looking for. You’ll see what options are available — and it won’t affect your credit score.
Speak to a person
A qualified adviser at Loan.co.uk reviews your options and talks you through what could work for your situation. They’re FCA-regulated and there to answer your questions.
Application & valuation
If you’d like to go ahead, a full application is submitted. You’ll need to provide some documents for income and ID, and the lender arranges a valuation of your property.
Get your funds
Once approved, the lender’s conveyancers handle the legal side. Funds are then transferred to your account — or directly to creditors if you’re consolidating debt.
No obligation
Getting a quote and speaking to an adviser is completely free. There’s no pressure to go ahead if it’s not right for you.
Common questions about homeowner loans
Why is it called a ‘homeowner loan’?
A homeowner loan is a type of secured loan that uses your property as security. It’s also known as a ‘second charge mortgage’ because it sits behind your existing mortgage (the first charge). The name simply reflects that you need to be a homeowner with a mortgage to apply.
Because the loan is secured against your home, it’s important to keep up with repayments — your home could be at risk if you don’t.
Will it affect my existing mortgage?
No. A homeowner loan is completely separate from your mortgage. Your existing mortgage rate, term, and monthly payments all stay exactly the same. You don’t need to remortgage or change your current deal in any way.
How much can I borrow?
You can typically borrow between £10,000 and £1.5 million, depending on the equity in your property, your income, and your credit history. Most lenders will lend up to 85% of your property’s value (combined with your existing mortgage), though some specialist lenders may go higher.
Can I get a homeowner loan with bad credit?
Because the loan is secured against your property, lenders can often be more flexible than with unsecured borrowing. Many specialist lenders consider applications with CCJs, defaults, or missed payments. Rates may be higher, but there are often options available where personal loans would say no.
How long does the process take?
From initial enquiry to receiving funds, the process typically takes 2–4 weeks. The initial quote and adviser call can happen within 24 hours. The remaining time is for the formal application, property valuation, and legal work.
What fees are involved?
Fees vary by lender but may include a broker fee, lender arrangement fee, valuation fee, and legal fees. Most of these can be added to the loan so you don’t pay upfront. Through Albot and Loan.co.uk, broker fees are up to 50% lower than the industry average.
Want to see what your options look like?
It takes about 2 minutes, there’s no commitment, and it won’t affect your credit score.
Let’s take a lookRepresentative Example (Secured Loans & Second Charge Mortgages)
If you borrow £18,000 over 10 years, initially on a fixed rate for 5 years at 7.4% and for the remaining 5 years on the lender’s standard variable rate of 7.9%, you would make 60 monthly payments of £249.27 and 60 monthly payments of £254.63. The total amount of credit is £19,657 (including a lender fee of £595 and a broker fee of £1,062). The total amount repayable would be £30,234. The overall cost for comparison is 10.42% APRC representative. This means 51% or more of customers receive this rate or better for this type of product.
Albot is an introducer and technology platform, not a lender and not a broker. Applications may be passed to Loan.co.uk Ltd, which acts as a credit broker, not a lender. Rates are subject to status, affordability checks and lender criteria.