Home/Guides/Secured loan vs remortgage
Secured Loans · 6 min read

Secured loan vs remortgage: which is right for you?

Both let you borrow against your home — but they work very differently. Here's how to choose, with worked examples and the trade-offs that actually matter.

Last updated: April 2026

Key takeaways
  • ✔ A remortgage replaces your existing mortgage; a secured loan sits alongside it as a second charge
  • ✔ Remortgage rates are usually lower — but only matter if there are no early repayment charges
  • ✔ Secured loans are usually faster (2–6 weeks vs 4–8 for a remortgage)
  • ✔ Secured loans let you keep a low existing fixed rate intact
  • ✔ Both put your home at risk — your home may be repossessed if you don't keep up repayments

The fundamental difference

A remortgage means replacing your current mortgage with a new one — usually with a different lender, often releasing equity at the same time. The new mortgage pays off the old one and you start fresh on the new lender's terms.

A secured loan (also called a second-charge mortgage or homeowner loan) is an additional loan secured on your property, sitting behind your existing mortgage. Your existing mortgage doesn't change — the new loan is a separate agreement with a separate lender and a separate monthly payment.

If you're only after a better rate on your existing borrowing, remortgaging usually wins. If you want to add borrowing without disturbing what you have, a secured loan often wins.

When a secured loan makes more sense

  • You'd lose a low fixed rate. If your current mortgage is on a 2% fixed rate, remortgaging now means losing it. A secured loan keeps it intact.
  • You'd pay big early repayment charges. ERCs of 1–5% on a £200k mortgage can be £2,000–£10,000. A secured loan avoids them.
  • You have adverse credit. Specialist second-charge lenders are usually more flexible than high-street remortgage lenders.
  • You're self-employed or have complex income. Specialist lenders are often happier to underwrite manually.
  • You need the money fast. 2–6 weeks vs 4–8 for a remortgage.

When remortgaging makes more sense

  • Your fixed rate is ending. You're going to remortgage anyway — bundle the extra borrowing in.
  • You're currently on the SVR. A new mortgage will almost certainly be cheaper than your lender's standard variable rate.
  • You want one monthly payment. Remortgaging keeps everything in one place.
  • You have clean credit and a strong income. You'll get the best mainstream rates.

Worked example: £30,000 home improvement

Imagine you have a £180,000 mortgage with 4 years left on a 2.5% fix and £30,000 to borrow for an extension. ERCs would be 3% (£5,400).

OptionRateSetup costsMonthly extra
Remortgage £210k @ 4.5%4.5% APRC£5,400 ERC + £999 fee+£200/mo on whole loan
Secured loan £30k @ 7.5% over 10y7.5% APRC£500 fee£356/mo

Even though the secured loan rate is higher, you avoid £6,400 of upfront costs and keep the cheap fix on £180k. Once the fix ends in 4 years, you can roll everything into one new mortgage.

Illustrative only. Actual rates and savings depend on your circumstances.

Frequently asked questions

Is a secured loan cheaper than a remortgage?
Not always. Remortgaging usually has lower interest rates because it sits as a first charge. But if you'd lose a low fixed rate, pay early repayment charges, or want to keep your existing mortgage, a secured loan can be cheaper overall once those costs are factored in.
Will a secured loan affect my existing mortgage?
No — your existing mortgage stays exactly as it is. A secured loan sits behind it as a 'second charge'. Your mortgage lender is notified and consents to the second charge, but your monthly mortgage payment, rate and term don't change.
How long does each option take?
Secured loans typically complete in 2–6 weeks. A standard remortgage usually takes 4–8 weeks. If speed matters — for example to fund home improvements before winter — a secured loan can be quicker.
Do I need permission from my mortgage lender for a secured loan?
Yes. Your first-charge mortgage lender must consent to the second charge being registered. This is a routine step — most lenders charge a small fee (£25–£100) and respond within 1–2 weeks. Your second-charge lender handles the request.
Can I get a secured loan if my mortgage is on a fixed rate?
Yes — that's actually one of the most common reasons people choose a secured loan over remortgaging. A secured loan lets you borrow more without disturbing your existing fixed-rate deal or triggering early repayment charges.
What if I have bad credit?
Specialist secured loan lenders are typically more flexible than mainstream remortgage lenders for adverse credit cases. We work with lenders who consider CCJs, defaults and missed payments — your home and the equity in it are usually the main focus.
Not sure which is right for you?

A soft-search check shows what you can borrow on both routes — no impact on your credit score.

Compare secured loans →Compare remortgages →
Important: This guide is for information only and does not constitute financial advice. Both secured loans and remortgages put your home at risk if you don't keep up repayments. CleverCompare is an introducer appointed representative of Charles Frank Finance Limited, which is authorised and regulated by the Financial Conduct Authority.