At a Glance
- This comparator models a remortgage and a secured loan side by side using your own figures – the key number to compare is the interest on the new money only, not the total repayable – understanding the comparison
- A lower monthly payment on the remortgage route does not always mean it is cheaper overall – extending your mortgage term restarts the clock on existing debt and typically adds interest – why the lower monthly is not always the better deal
- A secured loan tends to make more sense when your existing mortgage rate is good, an early repayment charge is still in force, or your circumstances have changed since you took out the mortgage – when each route tends to make sense
- The comparator does not include arrangement fees, early repayment charges, legal costs, or valuation fees – these can materially change which route is cheaper in practice – what is not included in the figures?
- A remortgage involves a full reassessment of your mortgage application – if your circumstances have changed, a secured loan may be available where a remortgage is not – can I remortgage if my circumstances have changed?
Secured Loan vs Remortgage Comparator
Secured loan or remortgage: which works out cheaper?
Enter your current mortgage details and how much you want to borrow. The tool models both routes side by side so you can see the true cost of each, monthly and over the full term.
Your existing mortgage
How much do you want to borrow?
Adjust each route to compare
All figures are illustrative only and are not a quote, offer, or financial advice. Calculations use the standard annuity formula (reducing balance, monthly compounding) based solely on the rate and term you enter. They do not include arrangement fees, valuation fees, legal costs, or early repayment charges, which can be significant and will affect which route is cheaper in practice. The rate you are offered on either product will depend on your credit history, income, equity, and the lender’s assessment of your circumstances. Getting a secured loan or remortgage is an advised process in the UK; a qualified broker will assess your full situation. Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.
About this comparator
Who it is for
Homeowners who want to borrow against their property and are weighing up whether a secured loan or a full remortgage is the more cost-effective route.
What it does
Models both routes using your own mortgage details and borrowing amount, showing monthly payments, total interest, and – critically – the interest cost on the new money only so you can compare like for like.
When to use it
Once you know how much you want to borrow and have your current mortgage details to hand – outstanding balance, interest rate, and remaining term.
Where it fits
Use the LTV and equity calculator first to confirm how much you may be able to borrow, then use this comparator to assess which route suits your situation.
Why it matters
The headline rate rarely tells the full story. The right answer depends on your existing rate, any early repayment charge, and how long you want to borrow over – all of which this tool lets you model.
How this comparator works
Enter your existing mortgage details
Input your outstanding balance, current interest rate, and remaining term. These figures are used to model the remortgage route and to calculate your current position.
Enter how much you want to borrow
This is the additional amount you want to release – the new money on top of your existing mortgage balance. The tool uses this to model both routes.
Adjust the rate and term sliders
Set an illustrative remortgage rate and term for Route A, and a secured loan APR and term for Route B. Adjust each to reflect what you might realistically be offered.
Compare the results
The tool shows monthly payments, total repayable, total interest, and the interest on the new money only for each route. The last figure is the most useful for a like-for-like comparison.
Understanding the comparison
The most important thing to understand about this comparison is that the route with the lower monthly payment is not always the cheaper overall option, and the route with the lower interest rate is not always the better choice. Both routes involve trade-offs that the simple interest comparison does not fully capture.
A remortgage rolls your existing debt and the new borrowing into a single loan, usually over a new, longer term. This can produce a lower monthly payment, but it can also mean paying interest on your existing mortgage balance for additional years you would not otherwise have paid. If you are several years into a 25-year mortgage and you remortgage to a new 25-year term, you are restarting the clock on the existing debt. The comparator shows this effect in the interest breakdown – look at the interest attributed to the new money only, not just the total, to get a like-for-like comparison.
A secured loan keeps your existing mortgage entirely separate. You continue paying your existing mortgage as normal and add a separate monthly payment for the secured loan. This means the existing mortgage balance continues to reduce on its current schedule. The secured loan rate is typically higher than a remortgage rate, but because you are only paying that rate on the additional borrowing, the total interest can sometimes be lower than it appears at first glance, particularly when the secured loan is taken over a shorter term than the remaining mortgage. Our guide to understanding secured loans covers how the product works in more detail.
When each route tends to make sense
Both routes can be the right answer depending on the specifics. The deciding factors are usually your existing mortgage rate, whether an early repayment charge applies, and whether your circumstances have changed since you first borrowed.
Remortgage tends to suit
Your existing mortgage deal has ended or is coming to an end. You can access a significantly lower rate than your current one. You want to simplify your borrowing into a single monthly payment. You are not within a fixed rate period with a meaningful early repayment charge.
Secured loan tends to suit
Your existing mortgage rate is competitive and you want to preserve it. An early repayment charge would make remortgaging expensive. Your circumstances have changed since you took out the mortgage. You want to borrow over a shorter term than your remaining mortgage. Speed matters – secured loans can often be arranged more quickly than a full remortgage.
Frequently asked questions
Is it cheaper to remortgage or take a secured loan?
This depends on your current mortgage rate, any early repayment charge, how much you want to borrow, the term you want to borrow over, and the rates available to you on each route. There is no universal answer. The comparator is designed to help you model the specific numbers for your situation, because the decision is almost always case-specific.
A common scenario where a secured loan works out cheaper in total: the borrower is three years into a five-year fixed rate at a competitive rate, with a 1.5% early repayment charge still in force. Remortgaging incurs the penalty, resets the term, and loses the existing rate. Taking a secured loan avoids all three of those costs. The secured loan rate is higher, but the total cost may be lower once the penalty and the effect of extending the existing mortgage term are included. The comparator does not model early repayment charges, so these need to be factored in separately.
What is not included in the comparator figures?
The comparator calculates capital and interest payments only, using the rate and term you enter. It does not include arrangement fees, which can be significant on both remortgages and secured loans. It does not include valuation fees, legal costs, or broker fees. It does not include any early repayment charge on your existing mortgage, which is one of the most important costs to factor in if you are currently in a fixed rate period.
For a full picture of the costs involved in secured borrowing, our guide to APR on secured loans explains what the annual percentage rate includes and how to compare offers on a like-for-like basis.
Can I remortgage if my circumstances have changed?
A remortgage involves a full reassessment of your mortgage application, including income, employment, and credit history, by the new lender. If your circumstances have changed since you took out your original mortgage – for example, if you have become self-employed, your income has reduced, or you have had some credit issues – you may find that you no longer qualify for the same level of mortgage borrowing at a competitive rate.
In those situations, a secured loan may be available where a remortgage is not, because the secured loan assessment takes a different approach to affordability and credit. Our eligibility checker is a useful way to understand how your current circumstances are likely to be assessed before approaching a lender.
Does a secured loan affect my existing mortgage?
Taking a secured loan does not directly affect your existing mortgage rate, term, or monthly payment. Your existing mortgage continues exactly as it was. However, your existing mortgage lender is notified when a second charge is registered against the property, and most mortgage terms require you to obtain consent from your existing lender before taking additional secured borrowing.
In practice, most mainstream mortgage lenders grant this consent routinely, but it is a step in the process and your broker will handle it as part of the application. Our guide to secured loans for home improvements includes more detail on how the second charge process works alongside an existing mortgage.
Squaring Up
This comparator helps you move beyond the headline rate and understand the true cost of each route using your own numbers. The right choice between a remortgage and a secured loan depends on factors that no single rate comparison can capture – your existing deal, any exit costs, and how your circumstances stand today.
- The key number is interest on new money only. Comparing total interest across the two routes is misleading because the remortgage total includes your existing balance spread over a new term. Focus on the new money interest figure for a fair comparison.
- A lower monthly payment is not always a better deal. Extending a remortgage term can significantly increase the total interest you pay on your existing debt, even at a lower rate.
- Early repayment charges change the calculation entirely. If you are within a fixed rate period, the ERC may make remortgaging more expensive than the rate comparison suggests. The comparator does not model these – factor them in separately.
- Changed circumstances favour the secured loan route. A remortgage involves a full income and credit reassessment. A secured loan assessment is more flexible, which means it is sometimes available when a remortgage is not.
- Speed can be a factor. Secured loans can typically be arranged more quickly than a full remortgage, which matters when timing is important.
- Fees are not in the figures. Arrangement fees, legal costs, and valuation fees apply to both routes and are not modelled by the comparator. Get full quotes from a broker before deciding.
If you have not yet confirmed how much equity you have available, the LTV calculator is the right starting point. If you want to understand how your eligibility is likely to be assessed, the eligibility checker works through the key factors lenders look at.
Ready to see what you could borrow?
Checking won’t harm your credit score Check eligibilityAll comparator figures are illustrative only and are not a quote, offer, or financial advice. Calculations use the standard annuity formula (reducing balance, monthly compounding) based solely on the rate and term you enter. They do not include arrangement fees, early repayment charges, legal costs, or valuation fees. The rate you are offered will depend on your credit history, income, and individual circumstances. Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.
