A smarter way to get a low-cost homeowner loan
If you own your home and need to borrow a significant amount, a homeowner loan could be the answer. This guide explains how they work and helps you decide if it’s the right choice.
Homeowner Loan
A loan secured against your property that sits alongside your existing mortgage. You borrow against the equity you’ve built up in your home.
Also known as:
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Is a homeowner loan right for you?
A quick way to see if this type of borrowing suits your situation.
A homeowner loan could be ideal if…
You own your home (with a current first mortgage) and have built up equity
You need to borrow more than £10,000—especially if over £25,000
You’re on a good mortgage rate you don’t want to lose
You’d face early repayment charges if you remortgaged
You want to consolidate debts but your mortgage lender won’t allow it
You want manageable monthly payments spread over a longer term
You might want to consider alternatives if…
You only need a small amount (under £10,000)—a personal loan may be simpler
You’re renting or don’t own property
You have little or no equity in your home
Your mortgage is ending soon and you could remortgage anyway
You’re uncomfortable with your home being used as security
You’re unsure if you can afford the monthly repayments
Not sure? Check in 2 minutes
Answer a few quick questions and we’ll show you if you’re likely to be eligible—and what deals might be available. It won’t affect your credit score.
How does a homeowner loan compare?
See how homeowner loans stack up against other ways to borrow.
Homeowner Loan
Best when you need £10k+ and want to keep your current mortgage deal. Ideal for debt consolidation.
Remortgage
Consider if your deal is ending anyway, or rates have dropped significantly since you fixed.
Personal Loan
Better for smaller amounts (under £10k) if you have good credit and don’t want to secure against your home.
Credit Cards
Only for short-term borrowing you can repay quickly, or 0% balance transfer deals.
How much could you borrow?
Your borrowing limit depends on your equity and the loan-to-value (LTV) ratio lenders will offer you.
What you’ll need
A mortgage on your property (homeowner loans sit as a second charge)
Enough equity — typically at least 15-20% of your home’s value
Provable income — employed, self-employed, or retired with pension
Affordability — lenders check you can manage the monthly payments
How much lenders typically offer
Maximum borrowing
Specialist lenders offer up to 95-100% LTV with good credit and strong affordability.
Standard lending
Most mainstream lenders. Good range of rates available for most credit profiles.
Lower LTV options
Even those with credit issues can often borrow at this level. Most competitive rates.
What do people use homeowner loans for?
Homeowner loans are flexible—here are the most popular reasons people borrow.
Debt consolidation
Combine credit cards, loans and other debts into one lower monthly payment.
Home improvements
Extensions, loft conversions, new kitchens, bathrooms, or garden renovations.
Major purchases
New car, caravan, boat, or other significant one-off expenses.
Property deposit
Raise funds for a buy-to-let deposit or help family onto the property ladder.
Tax bills
Spread an unexpected tax bill over manageable monthly payments.
Special occasions
Weddings, milestone celebrations, or once-in-a-lifetime experiences.
How do you get a homeowner loan?
From initial enquiry to receiving funds typically takes 2-4 weeks.
Get a quick quote
Answer a few questions about your property and borrowing needs. See what deals are available with a soft search that won’t affect your credit score.
Speak to an adviser
A qualified adviser reviews your options and recommends the best deal for your circumstances. They’ll explain everything and answer your questions.
Application & valuation
If you’re happy to proceed, a full application is submitted. You’ll provide documents to prove your income and ID, and the lender will arrange a valuation of your property.
Completion & funds
Once approved, the lender’s in-house conveyancers handle the legal work. The funds are then transferred to your account (or directly to creditors for debt consolidation).
No obligation: Getting a quote and speaking to an adviser is free. You’re under no pressure to proceed if it’s not right for you.
Your questions answered
Why is it called a “homeowner loan”?
Simply because you need to be a homeowner to get one. The loan is secured against your property, so you must own a home to be eligible. It’s also known as a secured loan, second charge mortgage, or home equity loan—they all mean the same thing.
Do I need to have a mortgage?
Yes, a homeowner loan (also called a second charge mortgage) sits behind your existing first charge mortgage. You need to have a mortgage in place to get one. The homeowner loan then sits alongside it as a separate, additional loan secured against your property.
Will my mortgage lender know?
Yes, your first charge lender will be notified and needs to give consent. This is standard procedure and usually straightforward—they rarely refuse. It doesn’t affect your existing mortgage terms or payments.
What if I have bad credit?
Because the loan is secured against your property, lenders can be more flexible than with unsecured borrowing. Many specialist lenders consider applications with CCJs, defaults, or missed payments. Rates may be higher, but options are often available where personal loans would be declined.
Can I pay it off early?
Yes, though some lenders charge early repayment fees—typically a percentage of the balance or a number of months’ interest. Your adviser will explain any charges upfront so you can factor them into your decision.
What happens when I sell my home?
When you sell, the homeowner loan is repaid from the proceeds alongside your mortgage. First your mortgage is paid off, then the homeowner loan, then you receive what’s left. Any early repayment charges would apply.
Find out if you’re eligible
See what homeowner loan deals are available to you in around 2 minutes. No commitment, no credit footprint.
Check your optionsRepresentative Example
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.
Albot is an introducer and technology platform, not a lender. Applications may be passed to Loan.co.uk Ltd, which acts as a credit broker, not a lender. Rates subject to status, affordability and lender criteria. Your home is at risk if you do not keep up repayments on a loan secured against it.