Best Homeowner Loans – Our Top Picks
If you are a homeowner with a mortgage and you are looking to borrow in excess of £10,000 for home improvements then a homeowner loan may be an option for you.
Over recents years the interest rates on homeowner loans (also known as secured loans or second charge mortgages) have come down so today they are comparable with personal loan rates.
With a personal loan, this is typically unsecured finance where the loan terms will range from 1 to 7 years dependent on lender and where borrowing is normally capped at £25,000.
If you are a homeowner with an existing mortgage, and you are looking to borrow over a longer term than 7 years, or where you wish to borrow more than £25,000, and remortgaging is not an option then the homeowner route may be an option for you. With this type of loan like your mortgage the debt is secured on your home.
Selected Homeowner Loan Deals September 2020:
Loan Type
Masthaven Homeowner Loan
APR/APRC
3.64% APR
Loan Term
3 to 35 Years
Borrow
£10,000 to £500,000
Raise capital for any purpose
e.g. home improvements, buy to let property purchase, school fees, business purposes, tax bill payment.
Raise capital for any purpose
e.g. home improvements, buy to let property purchase, school fees, business purposes, tax bill payment.
Loan Type
Shawbrook Homeowner Loan
APR/APRC
4.2% APR
Loan Term
3 to 25 Years
Borrow
£25,000 to £500,000
Special Features: Complete flexibility – repay the loan in full at any time
Special Features: Complete flexibility – repay the loan in full at any time
Loan Type
Paragon Bank Homeowner Loan
APR/APRC
3.40% APR
Loan Term
10 to 30 Years
Borrow
£30,000 to £500,000
Special Features: One of the cheapest homeowner loans in the UK!
Special Features: One of the cheapest homeowner loans in the UK!
What are homeowner loans used for?
Most homeowner loan providers are fairly flexible on how the borrowing is used.
Common reasons include, home improvements, paying for school fees, consolidating expensive debt e.g. credit cards and for using to put down as a deposit for a second property.
How Much Can I Borrow?
How much you can borrow and over what term of repayment will depend on factors such as:
- Whether you are a homeowner with a mortgage
- Your credit status
- Employment status
- How long you have been in the UK
- How much you earn
Homeowner Loans: What you need to know
- A second charge mortgage is also known as a “secured loan”, or a “homeowner” or “property-owner” loan, since it’s secured against the value of your home.
- It sits “behind” the primary mortgage on a property, and as a result can be quick to arrange. The completion time of a homeowner loan can be as quick as 10 working days.
- Interest rates are higher than for a first charge mortgage because the lender bears a greater risk, coming second in line for repayment should the worst happen and the property need to be sold to redeem the debt.
- When determining whether to lend you money, as with a mortgage the lender will need to ensure that you can afford monthly repayments by looking at your income and existing credit history.
Homeowner Loan Representative Example:
The Representative APRC is 5.9%. Based on an assumed loan amount of £48,000 (including broker fee of £2,505 & product fee of £495) over 240 months at an interest rate of 5% (varaible). Monthly repayment £316.78 & total repayable £76,027.20.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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