We have reviewed a selection of high street and specialist secured lenders to compare their lending offers and what is available to existing and new customers. The review includes seven high street lenders and two specialist lenders.
Of the seven high street bank lenders we reviewed there was only one, HSBC, that would offer a secured loan to new customers. The rest would only offer additional lending to their existing mortgage borrowers.
Borrowers that choose a secured loan from their existing mortgage lender may find this is also called Additional Borrowing or a Further Advance. In our review below we have referred to all of these as secured loans.
Those that have held a Halifax mortgage for at least six months can borrow up to 85% of their home’s value (subject to their circumstances and eligibility). Borrowers will need to be up to date on their mortgage payments to apply. Those with an interest-only mortgage can only borrow up to 75% of the property’s value.
Halifax also offers a £500 Green Living Cashback Reward for their existing borrowers that use this to make green home improvements. Borrowers must apply directly to the Halifax for their additional borrowing and use a TrustMark registered supplier for the works completed. Terms and conditions and other exclusions apply.
NatWest borrowers can apply for additional borrowing up to 90% of the value of their home. Borrowers need to reside in the UK, want to borrow at least £10,000 for a duration of between three and 35 years and not be more than 70 years old when the mortgage term ends. NatWest will consider applications for further borrowing used for home improvements, cars, holidays and weddings. Other reasons to borrow may be acceptable subject to application.
Barclays offers its existing mortgage borrowers additional borrowing of up to 85% of their property’s value. This will reduce to 80% for those borrowers wanting to borrow more to consolidate their debt.
Tesco Bank sold its mortgages to the Halifax. The Halifax will offer these borrowers additional borrowing.
Santander mortgage borrowers can apply for additional borrowing of at least £5,000 and for a minimum term of five years. The maximum amount that can be borrowed is 85% of the property’s value. Santander borrowers with a Flexible Offset mortgage should already have an agreed additional borrowing limit.
Nationwide’s existing borrowers can apply for additional borrowing up to 85% of their property’s value including their current mortgage balance, or 80% for debt consolidation.
The minimum amount is £5,000, or £10,000 for certain property transactions or debt consolidation. Nationwide also offers additional borrowing at a lower interest rate for energy efficient home improvements.
Those with a HSBC mortgage of at least six months can apply for additional borrowing of at least £10,000 repayable over a minimum five years. Unlike many other high street mortgage lenders HSBC will consider applications for a secured loan from new customers.
Optimum Credit offers secured loans either directly to borrowers or through a specialist loans broker. They offer secured loans from between £5,000 and £1,000,000 over terms of three to 30 years. This lender will accept loans up to 100% of the property’s value (including any existing mortgages).
Those wanting to apply for a secured loan from Optimum Credit can do so through our preferred secured loans broker.
There are lenders that will offer secured loans to those with a poor credit history. This includes those people with mortgage arrears, County Court Judgements (CCJs) and other missed loan or credit repayments. You will still need to meet the affordability and other criteria of the lender and if you are consolidating debts then this should aim to reduce your total cost of interest too.
A secured loans broker can help you to find a lender that will consider your circumstances if you have a history of poor credit.
Any secured loan will put your home at risk if you do not keep up the repayments.
Those wanting a secured loan or additional borrowing will have to complete a new mortgage application and pass an affordability test, even if their application is to their current lender. Lenders may also complete a credit score. The lender will need to confirm the value of your property and this may either be by a desktop valuation or a visit from a surveyor.
Borrowers should compare secured lending rates from their current lender and alternative lenders to help them get best value for money. This comparison should also include any fees involved either from the lender or a specialist broker if used to make the application. Those looking to borrow more to consolidate debts or if their credit has suffered may not be acceptable to their current mortgage lender.
Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.