A secured loan against a house in the UK is a loan where the lender registers a legal charge against your residential property, giving them the right to apply for possession and sale if you default. For homeowners with an existing mortgage, the most common form is a second-charge mortgage that sits behind the main mortgage in the priority order at HM Land Registry. For homeowners with no existing mortgage, a first-charge mortgage on the previously unencumbered property is usually the cheaper route. This article covers how a secured loan against a house works in 2026, who offers them, and what to weigh before signing.
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TL;DR Two main routes: second-charge mortgage (if you have an existing first-charge mortgage) or first-charge mortgage on an unencumbered house. Loan range: typically £10,000 to £500,000; terms 3 to 30 years. Combined LTV cap: usually 75-85 percent of the house's market value. Risk: if you default, the lender can apply to the court for possession of the house. Always check affordability stress tested at higher rates before committing. |
The two routes for a secured loan against a house
Route 1: Second-charge mortgage (if you already have a mortgage)
The new lender registers a second charge against your house at HM Land Registry, behind your existing mortgage. Your first mortgage continues unchanged; the new loan runs alongside it with its own monthly payment. This is the most common form of secured loan against a house in the UK and is regulated by the FCA under MCOB.
Route 2: First-charge mortgage (if your house is mortgage-free)
If you own your house outright with no existing mortgage, you can take a first-charge mortgage rather than a second charge. First-charge rates are lower than second-charge rates because the lender is paid first in any forced sale, so for an unencumbered property this is almost always the cheaper route. Most mainstream UK mortgage lenders accept first-charge applications on previously unencumbered properties.
| Your situation | Best route |
|---|---|
| House mortgaged, want to release equity | Second-charge mortgage (this article focuses on this case) |
| House owned outright (unencumbered) | First-charge mortgage on unencumbered property |
| House nearly paid off, small balance left | Either: small remortgage with capital raise, or second charge |
| Joint ownership and mixed credit profiles | Whichever route a specialist broker finds first; second charge often easier |
How much you can borrow against your house
Two limits apply, and the lower of the two is what's offered.
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Limit 1, equity available: Maximum loan = (House value × Maximum LTV) − Existing first-charge balance Limit 2, affordability: What the lender's stress-tested affordability calculator allows for your income and committed expenditure |
For a £400,000 house with £200,000 outstanding on the existing mortgage and a lender willing to go to 80 percent combined LTV, the equity headroom is £120,000. The actual loan offered will be the lower of that figure and what the lender's affordability test allows for your income.
Combined loan-to-value thresholds
UK lenders price by combined LTV. Tighter brackets get better rates.
| Combined LTV (first + second / property value) | Typical lender appetite |
|---|---|
| Up to 60% | Best rates available; most lenders compete actively |
| 60% to 75% | Standard mainstream rates |
| 75% to 85% | Mainstream second-charge lenders accept; rates rise; tighter affordability |
| 85% to 90% | Specialist lenders only; rate premium of 1-2% |
| Above 90% | Almost always declined unless circumstances exceptional |
How affordability is assessed
UK secured-loan lenders apply the affordability rules in the FCA's MCOB 11. The lender must check whether you can afford the new monthly payment alongside your existing mortgage and other committed outgoings, and stress-test the calculation at a higher rate than the one initially offered.
The stress test typically adds 1-3 percentage points to the offered rate. If the offered rate is 8% and the lender's stress is 3 percentage points, the affordability calculator runs at 11%. If you can't afford the payments at 11%, the loan is declined regardless of how comfortable the original 8% rate looks.
Common reasons affordability fails:
- Existing mortgage payment plus the new secured-loan payment exceed the lender's debt-to-income ratio threshold.
- Multiple credit commitments (car finance, credit cards, personal loans) reduce disposable income.
- Income variability for self-employed or contractor income; lenders use averaged or stress-tested figures.
- Stress-tested rate produces a payment too high relative to disposable income.
What you'll need to provide
| Document | Why it's needed |
|---|---|
| Photo ID and proof of address | Anti-money laundering checks under the Money Laundering Regulations 2017 |
| 3 months of payslips (employed) | Income verification |
| 2 years of accounts plus SA302s (self-employed) | Self-employed income evidence under MCOB |
| 3 months of bank statements | Verifies declared expenditure; identifies undisclosed credit commitments |
| Most recent mortgage statement | Confirms outstanding first-charge balance for the consent request |
| Buildings insurance schedule | Required by all UK secured-loan lenders before drawdown |
| Property valuation evidence | Either AVM, desktop valuation, or physical survey commissioned by the lender |
Who offers secured loans against a house in the UK
None of the major high-street banks (Lloyds, Barclays, NatWest, HSBC, Santander) offer second-charge mortgages directly. The market is served by specialist lenders, all FCA-authorised. Active lenders in 2026 include Pepper Money, Selina Finance, United Trust Bank, Together Money, Norton Home Loans, Shawbrook Bank, Equifinance, Step One Finance, and Spring Finance. Verify any lender on the FCA Register before instructing.
For first-charge mortgages on unencumbered houses, mainstream high-street and building society lenders all accept applications, with rates and criteria similar to a standard remortgage.
Typical timeline
| Stage | Typical duration |
|---|---|
| Decision in principle | Same day to 48 hours |
| Full application and documents | 1-3 working days |
| Property valuation | 5-10 working days (faster with AVM) |
| Underwriting and offer | 3-7 working days |
| Legal work and first-charge consent | 5-15 working days |
| Completion and drawdown | 1-3 working days |
| Total typical | 3-6 weeks |
Cases involving leasehold property, adverse credit, complex income, or slow first-charge lenders can extend beyond 8 weeks.
Costs and fees
- Interest rate: higher than first-charge mortgage rates; varies by combined LTV and credit profile.
- Lender arrangement fee: £500 to £2,500 typical, sometimes added to the loan.
- Broker fee: £0 to several thousand pounds depending on case complexity and broker model.
- Valuation fee: £0 (AVM) to £600+ (physical survey).
- Legal fees: typically £200 to £800.
- HM Land Registry fee: per the published HMLR fee schedule.
- Early repayment charges: typically 1-5 percent of balance for the first 1-5 years.
Risks specific to secured loans against a house
- Forced sale risk. If you default and the lender obtains a possession order, your house can be sold.
- Term extension increases total interest. Consolidating short-term debts into a 25-year secured loan reduces monthly payment but raises lifetime interest.
- Combined LTV exposure. Borrowing at high combined LTV reduces equity cushion and exposes you to falling property prices.
- Loss of consumer credit protection. Rolling unsecured debts (credit cards) into a secured loan removes Section 75 protection under the Consumer Credit Act 1974.
- Joint and several liability. On joint applications, both borrowers are liable for the full balance, not half each.
Free debt advice is available from StepChange, National Debtline, and Citizens Advice.
Primary sources
- FCA Mortgage Conduct of Business handbook, MCOB 11: handbook.fca.org.uk/handbook/MCOB/11/
- HM Land Registry registration fees: gov.uk/guidance/hm-land-registry-registration-services-fees
- Consumer Credit Act 1974 (Section 75): legislation.gov.uk/ukpga/1974/39
- FCA Register: register.fca.org.uk
- Money Laundering Regulations 2017: legislation.gov.uk/uksi/2017/692
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Disclaimer: This article is editorial information only and does not constitute financial advice or a recommendation of any specific product or lender. Secured loans on residential property are regulated by the Financial Conduct Authority. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Always consult an FCA-authorised mortgage broker or adviser for personalised guidance, and verify lender details on the FCA Register before making any decision. |
Frequently asked questions
Can I get a secured loan against a house I co-own?
Yes, but both owners must consent and both will typically be named on the loan as joint borrowers, jointly and severally liable. Some lenders accept "sole borrower, joint owner" structures where only one person is on the loan but both consent to the charge being registered, although this is less common and usually requires both parties to receive independent legal advice.
Can I get a secured loan against a house in another country?
UK lenders generally only accept charges on properties in England, Wales, Scotland, and Northern Ireland. Properties in the Republic of Ireland, the Channel Islands, the Isle of Man, or further abroad require a specialist international lender, which is a small and specialist segment.
What happens if my house value drops after I take a secured loan?
Your secured loan agreement is unaffected. The loan amount and terms stay the same. However, if combined LTV rises above 100% (negative equity), you may struggle to remortgage or move house, since most lenders won't accept a charge on a property with negative equity.
Can I rent out a house with a secured loan against it?
Most residential first-charge mortgages restrict letting without the lender's consent. If you let the property without consent, you may breach both the first-charge mortgage and the secured loan terms. If you plan to let, the right route is a buy-to-let mortgage on the property, which is a different product set.
Is a secured loan against a house cheaper than an unsecured loan?
Usually yes, especially for larger amounts and longer terms. Unsecured personal loans typically cap around £25,000-£50,000 and 7-year terms. Secured loans go to £500,000+ over 30 years, with materially lower rates because of the property security. The trade-off is that the house is at risk if you default.
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FIND AN FCA-AUTHORISED MORTGAGE BROKER Whether you need a second-charge mortgage on a house with an existing mortgage, or a first-charge mortgage on an unencumbered house, a regulated broker can place your case at the right lender. The KFI directory lists FCA-authorised mortgage brokers across the UK, filterable by region and specialism. All firms shown are verified against the FCA Register at the time of listing. |