Homeowner Loans

Get A Homeowner Loan Without High Broker Fees

Take out a homeowner loan with ABC Finance and save thousands with our fixed £1,495 broker fee.

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Receive your funds in as little as days

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Fixed £1,495 Broker Fees

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ABC FinanceHomeowner Loans
Gary Hemming

Author: Gary Hemming CeMAP CeFA CeRGI CSP

20+ years experience in homeowner loans

What is a homeowner loan?

A secured homeowner loan is a type of finance that is secured against property and sits behind your existing mortgage.

Homeowner loans are also known as a secured loan or a second charge mortgage.

They allow you to borrow a lump sum of money against the equity in either your home or a buy to let property.

Homeowner loans are popular because they allow you to borrow more than would be possible using an unsecured loan, with many lenders offering up to £250,000.

The amount you can borrow will depend on your property value, current mortgage balance, your income and your chosen lenders affordability criteria.

What can a homeowner loan be used for?

Homeowner loans can be used for almost any purpose.

They’re commonly used as debt consolidation loans to refinance existing debts such as credit cards, personal loans, store cards and any other types of finance.

This allows you to simplify your monthly costs as you will only have to make one payment each month. Using home improvement loans to give you the cash to refurbish your property is also very common.

Undertaking renovations such as redecoration, extensions, new kitchen and bathroom or a loft conversion can increase the value of your asset, allowing you to make a profit, which can ultimately offset your interest costs.

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Who are homeowner loans suitable for?

They’re suitable for homeowners with existing mortgages, who would like to stay with their current lender or are tied in to a low interest rate, and are looking to capital raise. They could work for you if you:

  • Are looking to raise funds
  • Want an alternative to remortgaging
  • Want to keep your repayments down through debt consolidation

Ultimately, deciding whether this is the right option for you will depend on a number of factors. Our team can offer advice and a free quote to help you make the right choice.

Our number one goal is to ensure that both the advantages and risks are explained fully to ensure individuals make informed decisions.

Will I qualify for this type of lending?

In order to have your application approved, you will need to provide information to your lender, who will then make a decision based on the risk presented. They will typically look at the following:

  • Your income and outgoings – to ensure you can afford the proposed monthly payment.
  • Your credit rating – Your credit history is used to check your financial status and how you’ve managed the repayments on other debts.
  • The value of your property – As your house acts as collateral for the loan.
  • The amount of equity you have – The value of your property, minus any existing charges.

Watch our explainer video


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How quickly will I receive the funds?

Homeowner loans can be completed quickly. We can complete an application and have the funds in your account in as little as 5 days, although most take around 3-4 weeks.

The time it takes for the money to hit your bank account will depend on whether a valuation of your property is required and how quickly you supply the required documents.

The application process is simple for home equity loans and our expert team can guide you to a quick completion.

What documents are required to take out a homeowner loan in the UK?

To apply for secured lending, the following will be required:

  • An application form – The application form usually takes around 45 minutes to complete for most clients, although we can usually complete this with you over the phone in around 15 minutes.
  • Proof of ID and address – This is usually covered with either a passport or driving licence and a recent utility bill.
  • Proof of income – Most lenders require 3 months payslips or last 2 years tax return for self-employed borrowers.
  • Bank statements – Most lenders require 3 months bank statements in order to verify your income and assess your account conduct.
  • Your most recent mortgage statement – The most recent statement from your mortgage provider is used to verify your home equity and mortgage balance.

If you’re planning to use the funds for home improvements, a brief breakdown of them would also be helpful.

As mentioned above, preparing these documents upfront when you apply will greatly speed up the process. In almost all cases, your loan provider will require these documents at some point, so it will save time if you’re prepared when they request them.

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How much does a homeowner loan cost?

The cost of a homeowner loan varies according to the amount of money you borrow, the loan repayment term, the interest rate charged and the cost of any arrangement fees that are added to the loan when it is set up.

Homeowner loan rates can either be a fixed rate or variable rate. Fixed rate loans mean that your monthly repayment will stay the same even if interest rates change in the wider market.

In addition to the interest charged, you may be faced with other costs. The most common ones are:

  • Lender arrangement fee – Also known as a product fee. This is charged by the loan provider as part of their loan pricing. In most cases, this fee can be added to the loan.
  • Broker fee – Almost all brokers charge a fee for their service. Most charge very high fees, often thousands of pounds, while we charge a fixed, low broker fee. In most cases, this fee can be added to the loan.
  • Early repayment charge – Should you repay your loan within the first couple of years, you may have to pay an early repayment fee, or exit fee to the lender.

As Financial Conduct Authority regulated brokers, our job is to keep your loan costs as low as possible, so we’ll always work to find you the best possible deal.

What should I consider when choosing a homeowner loan?

Whether you’re using a homeowner loan as a debt consolidation loan or a home improvement loan, there are a few important things to consider.

When using secured borrowing to repay existing debts, carefully consider your chosen loan term. Should you choose to extend the term, while your monthly repayments will be lower, the total cost of borrowing (APRC) may increase.

Secondly, securing your loan against your property can put your property at risk of repossession should you fail to keep up your monthly repayments. For this reason, the long term affordability of the loan should be carefully considered. In all cases, the secured loan lender will assess affordability to vastly cut down the chances of the loan becoming unaffordable and check your ability to manage your expenses.

Finally, you should consider the impact of adding fees to your borrowing. Should you add various fees such as broker fees, lender arrangement fees and other charges, you will pay interest on them. This can significantly increase the total cost of your borrowing and mean you pay more interest.

Why choose ABC Finance?

At ABC Finance, we put our customers first – which is why our broker fees are on average £2,880 cheaper than some of our competitors. On a £35,000 loan, we charge a fixed £1,495 fee, while many others charge 12.5% of the loan amount – £4,375.

On top of the great value we offer, we’re fully Financial Conduct Authority (FCA) regulated and have been trading since the year 2000. We’re rated an average of 4.8 out of 5 across TrustPilot, Reviews.co.uk and Google reviews.

We work with lenders across the market so will compare homeowner loans and secure the best deal for your circumstances. If you’re looking for low fees, market leading interest rates and great service from an experienced team, get in touch today.

Read more – Homeowner loans for self-employed borrowers

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Frequently Asked Questions

You can borrow anything from £5,000 to £250,000 with this type of loan.

The amount you can borrow is dependent on your property value, mortgage balance, affordability, the loan term and how much money you need based on your needs.

Yes, you can still qualify for this type of borrowing even if you have a poor credit history, including defaults, CCJs, IVAs, use of payday loans, previous bankruptcy or historical mortgage arrears.

We offer a specialist range of bad credit homeowner loans for this situation. Of course, those with a perfect credit score will have a higher chance of approval and access to lower homeowner loan interest rates.

While brokers play a vital role in the homeowner secured loan market, there is no need to pay a high broker fee to access finance.

Many brokers charge high fees, with some charging up to 12.5% of the loan amount, meaning £5,000 on a £40,000 loan. Should you choose to add this fee to the loan, you will significantly increase your monthly payments and end up paying interest on the fee, making it even more expensive.

At ABC Finance, we charge a low, fixed £1,495 broker fee and believe in improving access to finance for borrowers in the UK. For this reason, we advise against paying high broker fees.

No, we can offer you a detailed quote based on your circumstances without impacting your credit score.

Should you choose to proceed with the quote, we would then conduct credit searches, which would show up on your credit report and could impact your score.

Of course, we would not do this without first informing you.

Homeowner loans are secured against your property. Before you apply for a secured loan, be aware that your home is used as security. This means your home may be at risk if you fall behind with your secured loan or mortgage repayments. 

Remember, if you consolidate your existing borrowing, you may be extending the term and increasing the amount you repay in total.

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