Home Improvement Loans

Find the best home loan for your circumstances

If you have an existing mortgage and you are looking to borrow £25,000 or more then call our team on 0117 980 7743 (8.30am to 6pm – Monday to Friday) or complete our simple form.

What is a homeowner loan & how do they work?

You love the house you’re in but you just need more space.  Are you thinking of doing some major home improvements: because the property market is sluggish and you’d rather stay put than try to move?

If you’re a homeowner with some equity in your property (you’re not mortgaged up to the hilt) a home improvement loan could be a good option if you want to borrow money for major home improvements: to build an extension, build up into the roof, dig down into the basement, or replace bathrooms and kitchen.

They’re sometimes called homeowner loans, second-charge mortgages, “mini-mortgages”, or secured loans.

This is a secured loan

The clue is in the name. This is borrowing that’s “secured” by the lender against the value of your home. If you can’t repay, they could put your home up for sale. The security makes it less risky for lenders, so the rates are usually cheaper than “unsecured” loans.

Rates and fees will vary from lender to lender, and will depend on how much you want to borrow, the length of the term, how much equity you have in your home, and also your credit rating. You need to check if – as with your mortgage – the interest rate is fixed or may vary.

Access to more money

This kind of borrowing is riskier for you, but if you’re confident of your ability to repay it gives you access to more funding.

The limit for an “unsecured” personal loan from your bank is usually around £25,000. Whereas lenders may offer you up to £100,000 on a secured homeowner-type loan.

You can also take longer to repay the loan: 15 or 20-year terms are common, compared with five or 10 years for a secured loan. A longer term will mean lower monthly repayments – but you will end up paying more in interest.

But unlike secured loans there usually isn’t a penalty if you repay the whole loan earlier than the agreed term.

The minimum you can borrow is usually £10,000, but some lenders may lend as little as £3,000 (you’ll need to make sure that the admin fees are worth it for a smaller loan).

How does it work?

These loans are sometimes referred to as mini-mortgages or second-charge mortgages because they “sit behind” the first mortgage you took out to buy your house. They leave your primary mortgage untouched, so if you’ve secured a good fixed rate on your mortgage that won’t change.

This second-charge mortgage takes second place in the queue if for any reason you can’t keep up with your mortgage payments and the lender takes action to reclaim their money. Because they’re second in the queue their rate will usually be higher than your primary mortgage lender.

Compare rates and fees

Check the deals offered by different lenders, and be sure to calculate the total cost of the loan you want over the whole repayment.