Homeowners can apply for homeowner loans at competitive rates from our leading lenders. The amounts which can be borrowed can vary from small to large sums of money and can be used for anything from home improvements or renovations, a long deserved holiday or to pay off outstanding debts on store and credit cards and other loans.
By virtue of the fact that the loan is granted using their home as security or collateral, homeowner loans are generally secured loans. Secured loans usually enjoy lower interest rates because the loan company is taking on a lower perceived risk. The borrower however is taking more of a risk than with an unsecured loan where their home is not used as security. The result of this risk is that should you fall into difficulties and do not manage to pay back the loan, your home will be at risk of repossession. It is very important that you make sure that you can easily afford the repayments on a loan before signing on the dotted line.
Homeowner loans are usually easier to get approval on than unsecured loans because you are in effect betting your home that you will pay back the money to the lender. These loans could take a little longer to process but the time it takes is well worth the money saved on interest.
The money loaned is paid back monthly over an agreed term with interest and this is called the Annual Percentage Rate or APR. The amount you can borrow, the APR you are offered and the length of time or term you are given to pay back the loan all depends on your personal circumstances and the lending company's view of your ability to pay back the money. The equity you have in your property is also important. When comparing APRs for homeowner loans from different lenders you will be looking at typical rates and these are only a guide, an indication of the average of what successful applicants have received in the past. The exact interest rate you will be offered will be done on an individual basis and will also depend on your credit history.
Comparing APRs of homeowner loans from different lenders in a good indication of how competitive they are so it's useful if you are familiar with the different ways in which interest rates are quoted. If a variable rate is quoted, this means that the rate you are given may rise and fall with changes in the bank base rate so your monthly repayments could also fluctuate during the term of the loan. A fixed interest rate implies that the rate you pay will remain constant throughout the term of the loan, regardless of what happens to the bank base rate. This would make it easier for you to maintain a monthly budget but you wouldn't benefit if the bank base rate should fall.
Another factor to consider is if you think you may want to pay off the loan before the end of the agreed term. Some lenders apply a charge to homeowner loans if they are paid off before the due date. This is called a redemption penalty and can be up to two months interest - a significant additional cost. If you might want to pay off your loan earlier than agreed at the outset then it may be wise to take homeowner loans that do not have a redemption penalty, even if you pay a slightly higher APR.
If you want more information on homeowner loans and would like to have access to our competitive comparison of loans from our leading lenders then take a few minutes to fill out our simple online application.