Expert Guide
Secured Loan
vs Remortgage
Need to raise money against your property? The two main options are a secured loan (second charge) or remortgaging. This guide explains when each option makes sense — and how to choose.
Last updated: March 2026
Quick Answer
Whether a secured loan or remortgage is better depends on your circumstances. A secured loan keeps your existing mortgage rate and deal completely intact, completes faster at 3–6 weeks versus 6–12 weeks for a remortgage, and avoids early repayment charges that can cost thousands. It is the better choice if you have a competitive fixed-rate mortgage you want to protect. Remortgaging may be cheaper if your current deal has ended and you are on the lender's standard variable rate, as first charge rates are typically 4–6% compared to 6–12% for secured loans. However, with a secured loan you only pay the higher rate on the additional borrowing, not your entire mortgage balance. For homeowners locked into a good deal, needing funds quickly, or with changed credit circumstances, a secured loan is usually the more practical and cost-effective option.
The Quick Answer
Choose a Secured Loan if...
- ✓ You're on a good mortgage rate you don't want to lose
- ✓ You'd face early repayment charges to remortgage
- ✓ You need funds quickly (3–6 weeks)
- ✓ You only need to borrow a relatively small amount
- ✓ Your credit has worsened since taking your mortgage
- ✓ You want to keep things separate from your mortgage
Choose Remortgaging if...
- ✓ Your current mortgage deal has ended (on SVR)
- ✓ No early repayment charges apply
- ✓ You can get a better rate than your current deal
- ✓ You need to borrow a very large amount
- ✓ You want to consolidate everything into one payment
- ✓ You have excellent credit
Full Comparison
| Factor | Secured Loan | Remortgage |
|---|---|---|
| Interest rate | Typically 6–12% | Typically 4–6% |
| Your existing mortgage | Stays exactly the same | Replaced with a new deal |
| Early repayment charges | None on your current mortgage | May apply — often £1,000–£10,000+ |
| Speed to completion | 3–6 weeks typical | 6–12 weeks typical |
| Maximum borrowing | Up to £500,000 | Based on full property value |
| Costs & fees | Arrangement fee (£695–£1,495 typical) | Valuation, legal, arrangement fees |
| Credit requirements | More flexible — specialist lenders available | Stricter — assessed on full borrowing |
| Total cost of borrowing | Higher rate but only on the extra amount | Lower rate but on entire mortgage + extra |
| Separate from mortgage | Yes — independent product | No — everything combined |
Worked Example: The Real Cost
Let's say you have a £200,000 mortgage at 2.5% fixed with 3 years left on the deal, and you need to raise £30,000 for home improvements.
Option A: Secured Loan
£30,000 at 8.5% over 15 years
Monthly payment: £295
Total interest on £30k: £23,100
Mortgage stays at 2.5%: no extra cost
Total extra cost: £23,100
Option B: Remortgage
£230,000 at 4.5% over 25 years
Monthly payment: £1,278
ERC on current mortgage: £4,000
Extra interest (losing 2.5% on £200k): £18,000+ over 3 years
Total extra cost: £22,000+ (plus lost deal)
In this scenario, the secured loan has a similar total cost but preserves the competitive 2.5% mortgage rate. If interest rates rise further, keeping that deal becomes even more valuable. The secured loan is also faster to arrange and doesn't require restructuring your entire mortgage.
Common Questions
Can I have a secured loan and a mortgage at the same time?
Will a secured loan affect my mortgage?
Is a secured loan more expensive than remortgaging?
How long does a secured loan take compared to a remortgage?
Not Sure Which Option Is Best?
Get a free, no-obligation secured loan quote. Our advisers can help you compare against remortgaging to find the best option.