Homeowner loans up to £250k

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What is a homeowner loan?

Homeowner loans are also known as secured loans or second-charge mortgages. This type of loan allows homeowners to borrow money against their property. Almost any type of property can be used as security - whether you live in a house, bungalow, or flat.

Lenders may be more willing to approve your secured homeowner loan, even if you don’t have a good credit history. Plus, you may be able to access larger amounts of money at lower interest rates (compared to a personal loan).  

With homeowner loans, it is important that you keep up with repayments, as the lender could sell your property to claim back unpaid funds – though, this is usually a last resort. 

What can I use a homeowner loan for?

You can spend a homeowner loan on a major expense or put it towards a handful of different purposes - the choice is yours. We find the most common reasons people take out a homeowner loan include:

Making large home renovations - You could use the money to pay for a new bathroom, conservatory or loft conversion, for example.

Consolidating multiple debts - If you’re juggling several debt repayments, you could take out a homeowner loan to pay off all those existing debts, so you only need to make one payment each month. Just remember, extending the term could mean you end up paying more interest overall. 

How do homeowner loans work?

When you take out a homeowner loan, you borrow a lump sum of cash against your home and repay it in monthly instalments (including interest), over an agreed number of years.

When it comes to repaying the loan, you make the payments separately from your mortgage. But like a mortgage, the loan is tied to your home. So, it’s important that you always pay on time and only borrow what you need.

How much can I borrow with a homeowner loan?

We can help find you a homeowner loan from £10,000 up to £250,000. The actual amount you can get will depend on your personal circumstances, such as your affordability, credit history, and equity, for example.

What is home equity?

Home equity is the difference between the current market value of your property minus what you owe against it (i.e., your outstanding mortgage balance and any secured loans combined). Generally speaking, the lower your mortgage balance is, and the more equity you have, the less risky you’ll appear to lenders. As a result, you may be able to borrow more and at a lower rate, compared to someone with less equity.

To work out how much equity you have, deduct your mortgage balance from the current value of your home. For example, if your home is worth £250,000 and your mortgage balance is £150,000, then you have £100,000 of equity.

Bear in mind that you can only borrow up to a certain percentage of the equity you have. This is set by the lender. Lenders apply caps on borrowing to reduce the risk of you going into negative equity (where you owe more than your house is worth).

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Who are homeowner loans suitable for?

They are designed for homeowners with a mortgage who want a larger sum than a personal loan or a credit card can offer. Some people take out a secured loan as an alternative to remortgaging. For example, they may want to keep their current mortgage deal if they are enjoying low interest rates, or they want to avoid early repayment charges.  

Whether this type of loan is suitable for you depends on your individual circumstances. If you need help deciding on the best option for you, one of our qualified advisers can provide free professional advice at no obligation.

Simply complete our secured loan form to initiate a call.

Estimated monthly payments
Illustrative Rate 3.86%

£0
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Representative Example: If you borrow £21,700 over 10 years, initially on a fixed rate for 5 years at 4.94% and for the remaining 5 years on the Lender's standard variable rate of 5.74%, you would make 60 monthly payments of £263.41 and 60 monthly payments of £268.56. The total amount of credit is £24,899 (this includes a Lender Fee of £595 and a Broker Fee of £2,604). The total repayable would be £32,013.20 (this includes a Lender Exit Fee of £95). The overall cost for comparison is 8.6% APRC representative. This means 51% or more of customers receive this rate or better.

Or are you looking to borrow less than £10,000? If so, a personal loan may be more suited to your needs.

Representative Example: If you borrow £21,700 over 10 years, initially on a fixed rate for 5 years at 4.94% and for the remaining 5 years on the Lender's standard variable rate of 5.74%, you would make 60 monthly payments of £263.41 and 60 monthly payments of £268.56. The total amount of credit is £24,899 (this includes a Lender Fee of £595 and a Broker Fee of £2,604). The total repayable would be £32,013.20 (this includes a Lender Exit Fee of £95). The overall cost for comparison is 8.6% APRC representative. This means 51% or more of customers receive this rate or better.

The amount we show is an estimate based on an Illustrative Rate excluding fees. You can choose to pay the Broker Fee separately or have it added to the total amount of credit, which would increase the amount of interest you pay overall. Arranged rates from 3.86% to 24.84% APRC. Repayment terms between 3 and 25 years.

Can I get a homeowner loan with bad credit?

Yes, you could still be accepted for a homeowner loan, even if you have a poor credit history. As the lender has the added reassurance of your home being offered as security, your chances of approval are likely to be higher than with unsecured forms of lending (such as personal loans and credit cards). 

As long as you make your monthly repayments on time, every time, then your credit rating should gradually start to build back up (but missing payments can have the opposite effect). 

What's the difference between a secured homeowner loan and an unsecured loan?

Secured homeowner loans and unsecured personal loans are similar in that you borrow a lump sum and repay it in monthly instalments. There are, however, a few key differences:

  1. You can usually borrow more with a homeowner loan – typically from £10,000 to £250,000 - as your home is used as security. The exact amount will depend on your circumstances.
  2. Homeowner loans tend to come with lower interest rates than unsecured personal loans. This is because they are seen as less risky, as your home acts as a safety net for the lender.  
  3. With a homeowner loan, you can spread the repayments over a longer timeframe. This can reduce your monthly repayments but increase the amount of interest you’ll pay in total.  
  4. You may find it easier to get accepted for a homeowner loan if you have bad credit or a thin credit history, as your home gives lenders extra security. 

Read on to find out more about the pros and cons of homeowner loans.

If you want to borrow a lower amount over a shorter period, then a personal loan may be a more suitable option. There is also less risk involved if you fall behind with your repayments, as the loan isn’t tied to an asset. At Ocean, we can help you find a personal loan from £1,000 to £15,000, over one to five years.

What should I consider when choosing a homeowner loan?

If you use a secured homeowner loan to consolidate existing debts, your loan term may end up being extended. This can reduce your monthly repayments, but the amount you pay in interest may increase overall.

Remember that the loan is secured against your property, so it’s important that you can afford the repayments, to prevent your home from being at risk. Before you apply for a loan, try an eligibility checker to see the loan rates you qualify for – this won’t affect your credit score.  

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How do I find the best homeowner loan for me?

At Ocean, we specialise in finding the best loans for our customers. We compare 100s of loans from our panel of lenders to find a loan to suit your exact needs – even if you don’t have the best credit score.

Simply follow these steps:

  • Click ‘Get a quote’ and complete our online form
  • See the loan rate you’re approved for
  • Find out if you can get an even better rate over the phone – tailored to you
  • Finalise your loan and receive the money
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