Can I get a loan to buy a house?

Can I get a loan to buy a house?

author: Dan Griffiths

By Dan Griffiths

Put simply, yes ­- you can get a loan to buy a house, although you may not recognise it as a loan in the conventional sense.

It’s incredibly rare that you’ll buy a house outright with cash, so most of us will take out a kind of loan to pay for part of it, but you’re probably more familiar with this loan being called a mortgage.

The main loan option

There’s a good reason why mortgages are the best and often the only option you can take when you’re looking to buy a house. In short, it’s the only line of credit you can take out to pay for a house purchase. The upper limit on most loans aren’t large enough to cover the cost of a house, and the ones that could be – like a homeowner loan – aren’t suitable because you need to own a property already to take one of these out.

Regardless of this though, mortgages are also one of the cheapest ways to borrow a large amount of money, so it makes sense to choose this option. Often, the interest rates charged on a mortgage will be much lower than that of a secured loan taken out over a similar period of time.

Of course, in rare cases taking out a mortgage might not be your only option. For those in a fortunate enough position to do so, there may family members or close friends willing and able to offer interest-free loans to help you buy your home. You should still think carefully about this though, as there’s a risk your relationship could be affected if you’re unable to pay the money back.

Can I buy a house with a different type of loan?

If you’re wondering if you can take out any other form of loan to pay for a house, you’ll most likely struggle. Although there are secured loans that may allow you to borrow as much as a mortgage, you can only take one of these out if you already own a home, as they are secured against your property. Even if you were to buy a second property, you would still be required to take out a second mortgage instead of any other form of lending. And, as we pointed out before, the rate of interest charged on a homeowner loan is far higher than that charged on a mortgage, which makes this a less economical option.

So, it really is the case that a mortgage is the best way to borrow when you’re looking to buy a home, and it’s unlikely you’ll be able to take out any other loan to pay for a house anyway.

If you’re wondering whether you can take out a loan to cover the cost of your home deposit, read our guide here

Disclaimer: We make every effort to ensure that content is correct at the time of publication. Please note that information published on this website does not constitute financial advice, and we aren’t responsible for the content of any external sites.

Can I get a loan to buy a house? Can I get a loan to buy a house?