Can I borrow money against my house?
Yes, you can borrow money against your home. There are a few ways to do it, the most common being with a homeowner loan (often called a secured loan). You can also remortgage to release extra cash, or use equity release if you're over 55. Each option works differently, so it helps to know which one suits your situation before you apply.
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Why borrow against your home?
Because your home is used as security, borrowing against it can mean lower interest rates and higher borrowing amounts than you'd get with an unsecured personal loan. This makes it a popular choice for a range of reasons, including:
- Home improvements — such as an extension, new kitchen, or converting a loft
- Debt consolidation — combining several debts into one loan, which in some cases can lower your monthly payments, reduce the interest you pay, and make your finances easier to manage. However, extending the length of your borrowing could mean paying more in interest overall.
- Buying another property — for example, raising a deposit for a second home or buy-to-let
- Large one-off costs — like a wedding, a car, or supporting a family member
Despite the benefits, it’s important to remember that your home could be at risk if you fall behind on any expected repayments.
Who can borrow against their home?
If you own your home, or you're still paying off a mortgage, you can usually borrow against it. Lenders are happy to do this because your property acts as security for the loan.
Having a lower credit score doesn't rule you out. Lenders look at your whole financial picture, not just your credit report, so you may still be able to get a loan with bad credit.
How do you borrow money against your house?
There are three main ways to borrow against your house: a secured loan, remortgaging, or equity release. Each suits different needs, so it's worth understanding how they work before you decide.
What is a secured loan?
A secured loan, or homeowner loan, is a loan that uses your home as security for the lender. They know that in the event you were unable to maintain repayments, as a last resort, they could recoup any losses through the sale of your home.
The loan is separate to your mortgage, and runs alongside it. You can typically borrow between £10,000 and £500,000, repaid over 3 to 30 years.
What is remortgaging?
Remortgaging means switching your mortgage to a new deal, either with your current lender or a new one. When doing so, you may be able to borrow more on top. This extra amount gets added to your mortgage balance. It can work out cheaper than a separate loan, but it depends on your current mortgage rate and any early repayment charges.
What is equity release?
Equity release lets homeowners aged 55 and over release cash from their home without moving out. You don't have to make monthly repayments; instead, the loan (plus interest) is repaid when the home is sold, usually after you pass away or move into long-term care. It reduces the value of your estate, so it's worth getting financial advice before going ahead.
Loans for all purposes from £10,000 to £500,000
- Get a decision online
- Know your rate before you apply
- Comparing won't affect your credit score
Secured loans are secured against your property.
How much can you borrow against your house?
This depends on the option you choose:
|
Option |
Typical amount |
Typical term |
|
Homeowner loan |
£10,000–£500,000 |
3–30 years |
|
Remortgaging |
Based on your home's equity |
Remaining mortgage term |
|
Equity release |
A percentage of your home's value |
Repaid when you sell, move into care or pass away |
When deciding how much to lend, providers tend to consider the following:
- Debt-to-income ratio: Lenders will check your ability to repay the loan based on your income and existing debts.
- Your credit history: A healthier credit history can increase your chances of being accepted and might also get you better interest rates. However, as your property is being used as security, you may be able to get a loan despite having a low credit score.
- Your income: Lenders check that your income is enough to cover the repayments comfortably, alongside your other outgoings.
- How much equity you have in your home: The more equity you have (the difference between your home's value and what you still owe), the more you may be able to borrow.
- Lender policies: Each lender will have their own policies regarding loan amounts and other qualifying criteria.
Can you borrow money against your house to buy another property?
Yes, this is possible. Many people use a homeowner loan or remortgage to raise a deposit for a second property, whether that's a holiday home or a buy-to-let. The lender will want to know how you plan to fund the new purchase and repay the borrowing, so it helps to have a clear plan before applying.
What alternatives do you have to borrowing against your house?
Borrowing against your house isn't the only option. Depending on how much you need, you could also consider:
- A personal loan (unsecured, typically £1,000–£15,000 over 1–5 years)
- A 0% purchase credit card for smaller costs
- Savings, if you have them set aside
Things to think about before you borrow against your home
Before you commit, take a moment to weigh things up:
- Can you comfortably afford the repayments, even if your circumstances change?
- Have you compared rates across a few different lenders?
- Do you understand what happens if you miss a payment?
- Have you checked your credit report with Equifax, Experian, or TransUnion, so you know where you stand?
Borrowing against your house can be a sensible way to access money at a lower rate than other forms of credit. Just make sure you understand the terms and can manage the repayments before you sign anything.
Disclaimer: We make every effort to ensure content is correct when published. Information on this website doesn't constitute financial advice, and we aren't responsible for the content of any external sites.
