A secured loan on a house in the UK is a loan with a registered legal charge against the borrower's residential property. For homeowners with an existing mortgage, the most common form is a second-charge mortgage that sits behind the main mortgage at HM Land Registry. For homeowners with no existing mortgage, a first-charge mortgage on the previously unencumbered property is usually a cheaper route. This article covers what the product is, who offers them in 2026, what to weigh before signing, and how the application typically unfolds.
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TL;DR Two main routes: second-charge mortgage (alongside existing first mortgage) or first-charge mortgage (on an unencumbered house). Combined LTV cap: typically 75-85 percent of the house's market value across both charges combined. Typical timeline: 3-6 weeks application to drawdown. Property at risk: default can lead to a court order for possession of the house. |
Two routes for a secured loan on a house
Route 1: Second-charge mortgage (mortgaged house)
The new lender registers a second charge against the house behind the existing first-charge mortgage. Your first mortgage continues unchanged; the new loan runs alongside it with its own monthly payment. This is the most common form of UK secured loan against a house and is regulated by the FCA under FCA MCOB.
Route 2: First-charge mortgage (unencumbered house)
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 because the lender is paid first in any forced sale. Most mainstream UK mortgage lenders accept first-charge applications on previously unencumbered houses.
| Your situation | Best route |
|---|---|
| House mortgaged, want to release equity | Second-charge mortgage |
| House owned outright (unencumbered) | First-charge mortgage |
| House nearly paid off, small balance left | Either: small remortgage with capital raise, or second charge |
| Joint ownership, mixed credit profiles | Whichever route a specialist broker finds first; second charge often easier |
How much you can borrow against your house
The cap is the lower of two limits:
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Limit 1, equity available: Maximum loan = (House value × Maximum combined 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: equity headroom is £120,000. The actual loan offered is the lower of that figure and what affordability allows.
Combined LTV thresholds
| Combined LTV (first + second / property value) | Typical lender appetite |
|---|---|
| Up to 60% | Best rates available; most lenders compete |
| 60-75% | Standard mainstream rates |
| 75-85% | Mainstream second-charge lenders accept; rates rise; tighter affordability |
| 85-90% | Specialist lenders only; rate premium 1-2 percentage points |
| Above 90% | Almost always declined |
Affordability assessment
UK secured-loan lenders apply the affordability rules in FCA MCOB 11: existing mortgage payment plus the proposed new payment plus all committed outgoings stress-tested at 1-3 percentage points above the offered rate. Common affordability fail reasons:
- Total committed outgoings exceed the lender's debt-to-income threshold.
- Multiple credit commitments (car finance, credit cards, personal loans) consume disposable income.
- Income variability for self-employed or contractor income.
- Stress-tested rate produces a payment too high relative to net income.
Who offers UK secured loans on a house
For second-charge mortgages, the active lender market in 2026 includes Pepper Money, Selina Finance, United Trust Bank, Together Money, Norton Home Loans, Shawbrook Bank, Equifinance, Step One Finance, and Spring Finance. All FCA-authorised and verifiable on the FCA Register. Most are intermediary-only; some (Selina, Equifinance) accept direct applications.
For first-charge mortgages on unencumbered houses, mainstream high-street and building society lenders all accept applications. Rates and criteria are similar to standard remortgage cases.
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 |
| Underwriting and offer | 3-7 working days |
| Legal work and first-charge consent (second-charge route) | 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.
What documents you need
- Photo ID (passport or driving licence) and proof of address less than 3 months old.
- 3 months of payslips (employed) or 2 years of accounts plus SA302s (self-employed).
- 3 months of bank statements covering all accounts.
- Most recent first-charge mortgage statement (second-charge route).
- Buildings insurance schedule.
- Where applicable, evidence of additional income (rental, dividends, pension).
Costs and fees
- Interest rate: higher than first-charge rates on the second-charge route; varies by combined LTV and credit profile.
- Lender arrangement fee: £500 to £2,500.
- Broker fee: £0 to several thousand pounds, depending on broker model and case complexity.
- Valuation fee: £0 (AVM) to £600+ (physical survey).
- Legal fees: £200 to £800.
- HM Land Registry fee: per the published HMLR schedule.
- Early repayment charges: typically 1-5 percent of balance for the first 1-5 years.
Risks specific to secured loans on a house
- Forced sale risk. If you default and the lender obtains a possession order, your house can be sold.
- Term extension increases lifetime 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 against falling property prices.
- Loss of Section 75 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: handbook.fca.org.uk/handbook/MCOB/
- HM Land Registry registration fees: gov.uk/guidance/hm-land-registry-registration-services-fees
- Consumer Credit Act 1974: legislation.gov.uk/ukpga/1974/39
- FCA Register: register.fca.org.uk
- MoneyHelper: moneyhelper.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 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 on 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 party 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 on a house I let out?
Yes, through buy-to-let secured loan products. Most BTL secured loans are unregulated commercial lending, with tighter combined LTV caps (typically 70-80 percent) and rental income coverage tests on top of personal affordability.
What 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 percent (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 my secured loan be transferred to a different house?
Some products are "portable", meaning the lender allows the loan to move with you to a new property subject to the new property's value, your circumstances, and the lender's criteria at the time. Portability is set out in the offer document and is not universal.
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.
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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. |