Comparing UK secured loans in 2026 means weighing five factors that vary materially between lenders: APRC, fee structure, early repayment charges, criteria fit, and product features such as portability and drawdown flexibility. The lowest advertised rate is rarely the cheapest secured loan for a real borrower, and any comparison that stops at headline rate misses what actually drives total cost. This article walks through a structured comparison framework and explains how to read a UK secured loan illustration document.
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TL;DR Five comparison factors: APRC, fees, ERC structure, criteria fit, product features. Always start with APRC, not headline rate. APRC is the FCA-regulated total cost figure. Compare across realistic holding period. Lifetime APRC misleads if you'll refinance early. Verify criteria fit before applying. A great rate is irrelevant if the lender won't approve the case. |
The five-factor comparison framework
| Factor | What to look at | Why it matters |
|---|---|---|
| 1. APRC | Annual Percentage Rate of Charge on the illustration | FCA-regulated total cost figure; directly comparable across lenders |
| 2. Fees | Arrangement fee, broker fee, valuation fee, legal fee | Determines whether headline rate is real cost; also whether fees can be added to loan |
| 3. Early repayment charges | ERC scale by year; when ERC drops to zero | Determines flexibility to refinance or settle early |
| 4. Criteria fit | Will this lender approve your specific case profile | Lowest rate is theoretical if the lender declines |
| 5. Product features | Portability, overpayment allowance, drawdown facility, payment holidays | Future flexibility; some products allow features others don't |
How to read a UK secured loan illustration
The European Standardised Information Sheet (ESIS) is the mandatory illustration document for any regulated UK mortgage or secured loan. Format and required content are set by FCA rules under MCOB 5A. Every illustration shows the same key information in the same order, which makes lender-to-lender comparison straightforward.
| Section | What to check |
|---|---|
| Section 1: Lender and intermediary | Lender name, FCA Firm Reference Number; broker (if any) and their FRN |
| Section 3: Main features of the loan | Loan amount, term, currency, security type |
| Section 4: Interest rate and other costs | Interest rate; APRC; fee breakdown; total amount payable |
| Section 5: Frequency and number of payments | Monthly, fortnightly, etc; total number of payments |
| Section 6: Amount of each instalment | What you'll pay per period |
| Section 8: Additional obligations | Buildings insurance requirement; any other conditions |
| Section 9: Early repayment | ERC structure, exact percentages, exact years |
| Section 11: Complaints | How to complain; route to the Financial Ombudsman Service |
| Section 14: Supervisor | FCA as the regulator |
Compare illustrations side by side rather than relying on summary tables from comparison sites. The illustration is binding for the period stated on it; the summary is not.
Quick comparison checklist
Use this when comparing two or more illustrations:
- APRC: which is lower?
- Total amount payable over the full term: which is lower?
- Total amount payable over my realistic holding period (calculate manually): which is lower?
- ERC at exit point I'm likely to use: which is lower?
- Combined LTV cap: do I fit both?
- Property type acceptance: do both accept my property?
- Income type acceptance: do both accept my income type?
- Credit profile acceptance: have both quoted on my actual credit profile, or theoretical clean-credit pricing?
- Completion timeline: which fits my deadline?
- Product features (portability, overpayments, drawdown): which matter for my case?
Comparison traps to avoid
| Trap | What goes wrong |
|---|---|
| Comparing only on headline rate | Misses fee differences; APRC across the products may be 1+ percentage points different |
| Comparing only on monthly payment | Lower monthly usually just means longer term and more lifetime interest |
| Ignoring ERCs | Locked in to a product even if rates fall meaningfully |
| Assuming the headline rate applies to your case | Headline rates assume specific profiles; your actual rate may be 1-3% higher |
| Skipping criteria check | Wasted credit footprint on declines; the cheapest rate at a lender that won't approve you is irrelevant |
| Adding fees to the loan without comparing | Inflates the loan principal and total interest; sometimes fees-paid-up-front products work out cheaper |
| Ignoring the SVR after the fixed period | If you don't remortgage, you'll roll onto the lender's standard variable rate, which may be much higher |
Worked example: comparing two illustrations
Hypothetical scenario for illustration only. Two UK secured loans on a £75,000 advance over 15 years:
| Component | Product A | Product B |
|---|---|---|
| Headline rate | Looks lower | Looks higher |
| Arrangement fee | £2,500 (added to loan) | £500 (paid up front) |
| Broker fee | None (lender procuration only) | £695 (disclosed in writing) |
| ERC structure | 5% in year 1, falling 1% per year for 5 years | 2% in year 1, falling 1% per year for 2 years, then nil |
| APRC | Higher than Product B once fees included | Lower APRC despite higher headline rate |
| Total cost over 5 years (typical refinance horizon) | Inflated by larger arrangement fee + 5-year ERC | Lower 5-year total cost; ERC ends at year 2 |
The "lower headline rate" product (A) ends up more expensive over a realistic 5-year hold, because the arrangement fee inflates the principal it's charging interest on, and the long ERC blocks early refinance. The illustration document captures all of this clearly if you read it carefully.
How to compare across the lender shortlist your broker provides
If you're going through a whole-of-market broker, ask for illustrations from the top 2-3 lenders rather than just the one the broker recommends. Compare APRC and total cost over your realistic holding period across all of them. The broker should be willing to provide multiple illustrations on request.
Verify each lender on the FCA Register before signing. Confirm the firm is authorised, the permissions include regulated mortgage activity, and the firm name on the illustration matches the entry on the Register.
Comparing direct vs broker
For very simple cases (clean credit, freehold house, low combined LTV, employed income), comparing the direct route at lenders like Selina Finance or Equifinance against a broker's panel can be worthwhile. For most other cases (any adverse credit, self-employed income, leasehold property, unusual case features), going through a broker captures lender criteria knowledge that direct application can't replicate.
The direct vs broker decision is essentially: do you have a case simple enough that one or two specific lenders can be quickly identified as the right fit? If yes, direct is fine. If no, broker pays back the fee through better lender match.
Primary sources
- FCA Mortgage Conduct of Business handbook, MCOB 5A (illustration content): handbook.fca.org.uk/handbook/MCOB/5A/
- FCA Mortgage Conduct of Business handbook, MCOB 10A (APRC calculation): handbook.fca.org.uk/handbook/MCOB/10A/
- FCA Register: register.fca.org.uk
- MoneyHelper: moneyhelper.org.uk
- Financial Ombudsman Service: financial-ombudsman.org.uk
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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 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
What's the most important number when comparing secured loans?
APRC for the cost of taking the loan, then total cost over your realistic holding period (which adds in ERCs at the likely exit point). Headline rate alone is usually misleading.
Should I get illustrations from multiple lenders before deciding?
Yes, where possible. A whole-of-market broker can produce illustrations from 2-3 shortlisted lenders. Multiple hard credit searches across many lenders should be avoided, but soft-search DIPs and illustrations don't impact the credit file.
How long is a UK secured loan illustration valid?
Typically 30 days from issue, stated on the document itself. After that, rates and terms may have changed and a fresh illustration is needed.
Can I compare unsecured loans using APRC too?
The equivalent figure for unsecured consumer credit is APR (Annual Percentage Rate) under the Consumer Credit Act 1974. The two figures use slightly different calculation methodologies, so comparing APRC for a secured loan against APR for an unsecured loan gives a rough but not exact comparison. The total amount payable is the most direct comparison.
Are comparison websites reliable?
Useful for headline rates and rough APRC range, less useful for criteria fit and adverse-credit cases. Most comparison sites operate on lender commissions and may not show the full market. They typically can't quote on adverse credit profiles. Treat them as a starting point, not a final answer.
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FIND AN FCA-AUTHORISED SECURED LOAN BROKER A whole-of-market broker compares APRC across lenders that will actually approve your case, and provides multiple illustrations for like-for-like comparison. 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. |