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If you want to borrow money, there is an alternative to a remortgage – a secured loan.

Like a remortgage, a secured loan uses your home as security to borrow money for any purpose, which could include: home improvements, a new car, a luxury holiday or a child’s wedding. Very often this secured loan is used for debt consolidation.

You can take out a secured loan even if your property is already mortgaged. If this is the case, the lender will take what is known as a Second Charge on your property. If you own your house outright, the lender will take a First Charge on it.

Lenders are normally prepared to offer secured loans of between £3,000 and £50,000, although some may offer loans up to £100,000. Like a mortgage or remortgage, you make monthly repayments over a period of time (typically between 3 and 35 years) which will include an interest charge element. If you fail to repay your loan, or Default, your home could be repossessed by the lender.

Typically a secured loan will have a higher rate of interest than a remortgage.

There are a number of differences between a loan and a remortgage.
The main one is the interest charged. Typically a loan, will attract a higher rate of interest than a remortgage. Remortgages have the advantage of offering very competitive interest rates and this can make the repayments significantly lower than a loan.

Another difference is the time it takes to apply and get a loan. With a remortgage, there is a certain amount of legal paperwork to be done (conveyancing). This is not the case with a loan, so the whole process is quicker. A secured loan could be agreed and processed within a week or two, with a remortgage perhaps taking 2-4 weeks.

Also, when you apply for a remortgage, the amount you are able to borrow is based on a multiple of your household income (typically 3 times your annual income). With a loan, you may be able to borrow more than this amount, although your income is still taken into account when assessing your suitability and your credit status is also a big factor, as with a remortgage application.