A homeowner loan is the same thing as a secured loan or second charge mortgage. It is a loan secured against your home behind your existing mortgage, leaving that mortgage and its rate untouched. Homeowner loans typically start at £10,000 over terms of 3 to 30 years, come mainly from specialist lenders through brokers, and are most often used to consolidate debt. Because your home is the security, it may be repossessed if you do not keep up the repayments.
- Homeowner loan, secured loan and second charge mortgage are three names for one product; lenders and brokers use them interchangeably.
- It is a second, separate loan on your property, so your existing mortgage, rate and term stay exactly as they are.
- Most homeowner loans are arranged through brokers with specialist lenders rather than high street banks.
- FLA data shows 44,725 new second charge agreements worth £2.4bn in the year to June 2026, most for debt consolidation.
- The loan is secured on your home, which may be repossessed if you do not keep up the repayments.
How does a homeowner loan work?
A homeowner loan is borrowing secured on a property you already own with a mortgage. The lender registers a legal charge at the Land Registry behind your mortgage lender's charge, which is why the product is also called a second charge mortgage, and why "secured loan" describes the same thing from a different angle. All three names refer to one product; "homeowner loan" is simply the friendliest label.
You repay it in monthly instalments over an agreed term, separately from your mortgage, and the charge is removed when the loan is cleared. How much you can borrow depends on the equity in your home, the gap between its value and what you already owe, and whether the new payment fits your budget after your mortgage and other outgoings. Terms typically run from 3 to 30 years, and the rate can be fixed for a period or variable throughout.
Because it is a separate agreement, your existing mortgage is not disturbed. That is the main reason people choose a homeowner loan over a remortgage: if you are part way through a fixed rate with an early repayment charge, or your rate is lower than anything available today, you can raise money without giving it up. The trade-off is two secured payments to keep up instead of one, and if you fall behind on either, your home may be repossessed. Our guide to what a second charge mortgage is covers the legal mechanics.
Who offers homeowner loans?
Mostly specialist lenders rather than the bank that holds your mortgage. The UK second charge market includes lenders such as Pepper Money, Together, Shawbrook, United Trust Bank, West One, Selina Finance, Equifinance, Spring Finance, Interbridge, Tandem, Central Trust, Norton Home Loans and Evolution Money, each with its own appetite for loan size, loan-to-value and credit history. Our lender reviews summarise who lends to whom.
Most of these lenders do not deal with the public directly; they work through brokers, some of whom, such as Ocean Finance, Loans Warehouse, Fluent Money and Believe Loans, are household names in their own right. A broker's role is to match your circumstances to the lender most likely to consider you at the best available price, and to handle the application, valuation and consent from your mortgage lender. Checking your options this way will not affect your credit score; a full application is only made once a lender is chosen.
It is a substantial market. Figures from the Finance and Leasing Association show 44,725 new second charge agreements worth £2.4bn in the 12 months to June 2026, up 18% by number and 27% by value on the previous year, with debt consolidation accounting for at least 60% of new business. Equiclear is an introducer within that market, not a lender or a broker: we pass your details to an FCA authorised broker, and we explain how we are paid on our about page.
What does a homeowner loan cost?
Three things make up the cost: the rate, the fees and the term. Homeowner loan rates are usually higher than first mortgage rates, because the lender sits second in line if the property is sold, but well below credit card and most personal loan rates. Fees can include a lender arrangement fee, a broker fee, a valuation and legal costs, and the illustration you receive must show them all combined with the rate as an APRC. The term matters most of all, because a long term lowers the monthly payment but raises the total. Here is the standard example.
Illustrative rates: The rates in this example are fictional and used only to show how the numbers work. They are not an offer. Your actual rate may be lower or higher and will depend on your circumstances, your property and the lender. Consolidating debt over a longer term can mean you pay more interest overall, even if your monthly payment falls.
| Amount | |
|---|---|
| Current monthly payments (£12,000 on cards at 24.9% and an £8,000 loan at 12.9% over 5 years) | £532/month |
| New homeowner loan payment (£20,000 at 7.9% over 15 years) | £190/month |
| Total repayable over the 15-year term | £34,196 |
The monthly payment falls by £342, but the total repaid over 15 years is £14,196 more than the £20,000 borrowed. A shorter term shrinks that gap. Our secured loan calculator lets you try other amounts and terms, and our guide to what a secured loan APRC is explains how to compare two offers fairly.
What are the alternatives to a homeowner loan?
The closest alternative is a remortgage to pay off debt, where you replace your whole mortgage with a larger one and use the extra to clear your debts. It usually carries a lower rate than a homeowner loan and leaves you with one payment, but it means giving up your current deal, paying any early repayment charge and passing a full affordability assessment, and most lenders cap consolidation remortgages at 80% to 85% loan-to-value. Our comparison of a secured loan and a remortgage weighs the two.
If you would rather not secure anything on your home, an unsecured personal loan or a balance transfer card can work for smaller amounts and cleaner credit files. They cost more per month over a short term, but the home is never at risk. See our comparison of a secured loan and a personal loan.
And if the honest problem is that your debts have become unmanageable rather than merely expensive, no loan is the answer. A debt management plan or, in more serious cases, an IVA can deal with the amount without adding a charge to your home. MoneyHelper, StepChange and Citizens Advice will give you free, impartial advice on every option, including the ones that do not involve borrowing, and speaking to them costs nothing and affects nothing. A homeowner loan is a useful tool for someone who can comfortably afford the payment for the whole term.
A homeowner loan is not the right choice if your mortgage deal has ended or is about to, since a remortgage may then give you a lower rate on everything with no early repayment charge to avoid. It is rarely worth it for small sums, because the fixed fees weigh heavily on a modest loan, and it is the wrong tool if you already struggle with your mortgage payment, because a second secured payment raises the risk of losing your home rather than lowering it. In that situation, free advice from StepChange, MoneyHelper or Citizens Advice should come first.
Worried about debt? Get free advice first
If you're struggling, it's worth speaking to a free, impartial debt advice service before you borrow more. They don't sell anything and won't judge your situation.
- MoneyHelper: Free, impartial debt advice backed by government
- StepChange: The UK's largest free debt charity
- Citizens Advice: Free, confidential advice on debt and money
Checking your options with Equiclear will not affect your credit score.
Frequently asked questions
Is a homeowner loan the same as a secured loan?
Yes. A homeowner loan, a secured loan and a second charge mortgage are the same product: a loan secured on your home that sits behind your existing mortgage. Lenders and brokers use the three names interchangeably, and the legal structure and regulation are identical whichever name appears.
Do I need to own my home outright to get a homeowner loan?
No. A homeowner loan is designed for people who still have a mortgage; it sits behind that mortgage as a second charge. If you own your home outright, a lender would take a first charge instead, and a wider range of products, including a standard mortgage, becomes available.
How much can I borrow with a homeowner loan?
Typically from around £10,000 up to six figures, depending on the equity in your home, the lender's maximum combined loan-to-value and what you can afford each month after your mortgage and other outgoings. Lenders with an appetite for adverse credit usually cap the loan-to-value lower.
Can I get a homeowner loan with bad credit?
Often, yes. Many homeowner loan lenders consider defaults, CCJs and missed payments, particularly where they are more than a year old, your mortgage is paid on time and there is enough equity. The rate will reflect the history. Our bad credit hub explains which situations are commonly considered.
Does my mortgage lender have to agree to a homeowner loan?
Your mortgage lender's consent to the second charge is normally needed as a formality, and the broker and solicitor arrange it. It is rarely refused when your mortgage payments are up to date. Your mortgage itself is not changed by the process.