Home loans (also known as secured loans) offer a way to borrow large amounts of money by using the equity you own in your home as collateral against your loan. This reduces the risk of you being unable to pay your loan, which is why secured loan lenders often have a more flexible lending criteria and why they often offer attractive interest rates. Home loans have become a popular choice amongst borrowers as they allow you to obtain the additional finance that you require without disrupting your existing mortgage deal.
Types of home loans
Generally speaking, home loans can come in three different forms:
Short-term fixed rate home loans – These loans involve you paying a fixed amount every month throughout the short term of the fixed rate (usually between 1-5 years). Following this period, your repayments will ten revert to the lenders standard variable rate (meaning your payments could go up or down).
Fixed for term home loans – These loans involve you paying a fixed rate every month throughout the term of the deal, giving you peace of mind that your repayments will not fluctuate and the ability to budget your outgoings.
Variable rate home loans – With these loans the interest rate that you may pay may fluctuate in response to the Bank of England base rate or market forces. This means that your monthly repayments and the total amount you repay over the term could increase or decrease.
What are the advantages of home loans?
- Lower rate of interest – You will normally pay a lower interest rate than with a personal loan because the loan is secured against your home.
- Longer repayment period – home loans may allow you to make payments over a longer time period, which can be helpful for budgeting.
- Borrow more – some home loan providers will allow you to borrow significantly more than is usually available via personal loans.
It is worth taking into consideration that as a home loan is secured against your property, failure to keep up with repayments can result in the repossession of your home. Consequently you should ensure you can fully afford payments before committing to a loan.
Home Loan Calculator
Taking out a home loan is a big investment, which is why you should ensure that you have the capacity to afford the repayments. Whilst our home loan calculator can assist you in comparing over 200 different loans from over 20 different lenders, we still urge that you contact a mortgage broker to assist you.
We have a specialist secured loan advisory team, who can help you calculate the loan terms that you can comfortable afford. Additionally, our expert team can also compare a range of leading and exclusive home loan deals, to help find the ideal loan perfect for your personal circumstances.
If you have any questions or queries about calculating a secured loan, why not call us today on 0117 313 8872, for a FREE initial consultation.