Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
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).
| Option | Rate | Setup costs | Monthly extra |
|---|---|---|---|
| Remortgage £210k @ 4.5% | 4.5% APRC | £5,400 ERC + £999 fee | +£200/mo on whole loan |
| Secured loan £30k @ 7.5% over 10y | 7.5% 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
Our overview pages explain each route in plain English. For a remortgage, a regulated mortgage broker can help you compare the whole market.