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What is a secured loans?

A secured loan, also known as a second charge or a second mortgage, is a type of loan that allows homeowners to borrow money against the equity in their property.

Usually, the more equity you have in your home, the more you’ll be able to borrow.

The interest rate of a secured loan will be slightly higher than a regular mortgage due to the higher risk involved by the lender. However, the interest rate on a secured loan is usually cheaper than an unsecured regular personal loan.

The first charge of the property will be held by the primary mortgage company. In the event of repossession, the first charge mortgage will be repaid first from the proceeds followed by any secured loan or subsequent charges.

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Secured loans for different purposes

There are lots of reasons and individual situations where a secured loan will be recommended by our mortgage advisor team, these include:

Home Improvements – A secured loan can be used to fund home improvements such as a new kitchen, bathroom, or extensions etc. These enhancements can also lead to an increase in property value over time.

Debt Consolidation – Both unsecured debts such as credit cards or loans, or other secured loans can be consolidated using a new secured loan. Great mortgage advice is required here as you will need to be made aware and run through any risks involved with your mortgage advisor.

Releasing Capital – There are many reasons why clients would consider a secured loan to raise capital. Such as helping family members, a large purchase or holiday, home repairs, tax bills etc.

Investment/Business Opportunities – Business owners and landlords may consider a secured loan if they need money quickly for another business interest such as to buy another property or perform a refurbishment project.

You should think carefully before securing other debts against your home. By adding your unsecured debts to your mortgage, which is secured on your home, you are potentially putting your home at risk if you cannot make the required repayments.

Although the total monthly cost of servicing your debt may have reduced, the total cost of repayment may still have risen as the term of your mortgage is longer than it may have taken to repay the debts originally.

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Secured Loans FAQs

What are the different types of second charge mortgage?

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As with regular mortgages, there are lots of different types available to cater for individual client circumstances. As part of receiving great secured loan advice, your mortgage advisor will recommend the best way forward based on your situation.

Here’s a summary of the types of secured loans that are available:

Repayment – At the end of your agreed repayment term, the loan will be repaid. This is the most common type of secured loan.

Interest Only – You’ll just repay the interest payments; the capital of the secured loan will remain the same throughout the term. You’ll need to prove to the lender that you have a repayment/exit plan in place for this type of loan.

Variable/Fixed Rates – As with regular mortgages, there are various interest rate options such as fixed terms or variable rates. Your secured loan advisor will recommend the best way forward based on your personal situation.

Early Repayment Charges – A secured loan is a medium to long term commitment, if you repay the loan early there will usually be early redemption charges payable, just like with a regular mortgage. If you are looking for short-term borrowing for 24/36 months or below, there may be other products more suitable that we’d recommend.

Why use a mortgage broker when looking at second charge mortgages?

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As a mortgage broker, we’ll make sure all clients will receive a free, no-obligation consultation where we’ll answer all your questions and explain a route forward.

You can book this online via our ‘speak to an advisor’ button or telephone.

Each type of secured loan has its own terms, eligibility criteria, and purposes.

As part of our secured loan mortgage advice process, we’ll recommend the best way forward for you and let you know the fees and costs involved with your secured loan.

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Converse with your own dedicated case manager.

Your case manager will be by your side through the whole process.

We're here for you, every step of the way!

Any questions regarding your mortgage or the process that you have along the way, we will be more than happy to answer them.

Your mortgage isn't the only priority, insurance is important too.

We like to make sure every customer who get in touch are covered with the right inurance policy tailored to their circumstances, to make sure they are protecting themselves and the people they love.

Explore various mortgage products.

In order to try and find the best mortgage deal for you, we will search through various specialist lenders.

We have 20+ years of experience dealing with mortgage situations.

We have insider knowledge of lending criteria and debt consolidation mortgage products.

Your advisor will be with your every step of the way to try and help you with your mortgage, even with bad credit.

It's not just about the mortgage, we want you to receive the best mortgage advice and customer service possible to let you take out a second charge mortgage.

Secured Loan Considerations


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If you’re looking to consolidate your unsecured debts such as credit cards and/or personal loans, you’ll need to fully understand and consider the risks of securing these against your home. Our mortgage advisors will run through all of these with you.

Higher Interest Rates

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Due to the higher risks involved for the lender, secured loans tend to have slightly higher interest rates compared to traditional a first charge mortgage. However, secured loan rates are usually much lower than any unsecured personal loan or credit card etc will offer. So generally, it’s a cheap way to raise money.

Affordability Assessment

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Applying for a secured loan is a very similar process to applying for a first charge mortgage. You’ll need to pass affordability assessments and prove you can afford the repayments. Documents such as bank statements and proof of income will be requested.

Loan Amount

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We may need to prove to the secured loan lender the purpose of the loan. For example, if your secured loan is for home improvements, we might need to provide quotes and timescales etc.

Credit Score

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Similar with first charge, regular mortgages, there may be options available for secured loan lending with a low credit score. Your mortgage advisor will be able to review your credit report and advise of your options.

Associated Costs

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In addition to the interest rate, borrowers should be aware of other costs associated with a secured loan, such as arrangement fees, valuation fees, legal fees, and potentially early repayment charges. All the costs will be explained clearly as part of the secured loan advice process.

Property Value

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Similar to a first charge mortgage, as part of the process, you’ll be required to pay for a property valuation. Often, this can be added on to the loan amount if required. This figure will be in the region of £100 to £300 depending on the secured loan lender.

Time Scales

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Secured loans are much faster to complete than with a regular mortgage. This is due to a quicker legal process and there’s no-chain involved. However, if money is required in weeks an alternative short-term product like bridging finance might work better. Your mortgage advisor will help you with this and recommend the best product to meet your situation.

Mortgage Guides

UK Moneyman Limited is Registered in England, No. 6789312
Registered Address: 10 Consort Court, Hull, HU9 1PU.

Authorised and Regulated by the Financial Conduct Authority.

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