Mortgage Options Guide
Secured Loan vs Remortgage:Which Option Could Work for You?
Comparing two ways to raise money using your property as security—and understanding which could suit your circumstances.
Featured insight
Understanding your options when raising funds against property equity.
A secured loan and a remortgage are both ways to raise money using your property as security—but they work differently.
- Remortgage: replaces your existing mortgage with a new one.
- Secured loan: a separate loan secured against your home, typically alongside your current mortgage.
Because both are secured on your property, missing payments can put your home at risk.
Quick comparison
| Feature | Secured loan | Remortgage |
|---|---|---|
| Your current mortgage | Stays in place | Replaced |
| Monthly payments | Two (mortgage + secured loan) | Usually one |
| Interest rate (typical) | Can be higher than remortgage rates | Often lower (depends on LTV/credit) |
| Speed | Can be faster in some cases (varies) | Often longer due to legal/valuation steps |
| Common reason people choose it | Avoid ERCs / keep existing mortgage deal | Improve rate and consolidate into one mortgage |
When a secured loan may suit you
A secured loan may be considered when:
- You're tied into your current mortgage with high ERCs, and you don't want to remortgage yet.
- You want to keep your existing mortgage rate/terms unchanged.
- Your circumstances have changed and you want to explore options beyond a traditional remortgage route (lender criteria vary).
When a remortgage may suit you
A remortgage is often explored when:
- You want to reduce your interest rate (where available) and ensure borrowing is on a single structure.
- Your fixed deal is ending and it's a natural time to review.
- You want to keep things simple with one lender and one monthly payment.
Key things to watch
- Total borrowing cost: a secured loan might reduce monthly outgoings, but could cost more overall depending on rate and term.
- Future remortgaging: having a secured loan can reduce remortgage options because the next lender assesses both debts.
- Fees and charges: both can come with arrangement fees and other costs; remortgaging may add legal/valuation steps.
FAQs
Is a secured loan the same as a second charge mortgage?
In many cases, yes—secured loans are often structured as second charge borrowing alongside a first mortgage.
Can I use either option for debt consolidation?
Some homeowners do—however, it changes the risk profile because previously unsecured debts become linked to your home.
Which is "better"?
There's no one-size-fits-all. It usually comes down to ERCs, your existing rate, how much you need, affordability, credit profile, and total cost.
Next step
Compare the total cost, monthly payments, and impact on future borrowing. A mortgage adviser can help you understand which route may suit your situation best.
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Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.