How a loan against property works
A loan against property uses a home or other property you own as security. The lender usually registers a charge on it, so the property can be sold to repay the debt if you don't keep up repayments.
Lenders look at the property's value, any mortgage already secured on it and your income. They usually cap the total borrowing at a share of the value, set by the lender.
Worked example
Borrowing £50,000 at 7.5% over 15 years costs £463.51 a month, £83,431.11 in total, so £33,431.11 is interest.
Over 10 years the payment rises to £593.51 but the interest falls to £21,221.06. Over 20 years the payment drops to £402.80, but the interest rises to £46,671.18.
Interest is worked out monthly at one twelfth of the annual rate. Lenders may calculate interest differently (some charge it daily), so your actual payments can differ slightly.
Before you borrow
A long term makes the monthly payment easier but adds a lot of interest. Check for arrangement fees and early repayment charges, and compare the APR and total repayable with unsecured options.
Your property may be repossessed if you don't keep up repayments on a loan secured on it.
Inputs for the secured loan against property calculator
Amount to borrow
The amount you want to borrow against the property.
Interest rate (per year)
The annual interest rate on your loan. The rate shown is only an example, so enter the rate from your quote.
Term
How many years you'll repay over. Loans against property often run for longer than personal loans.
CALCULATOR QUESTIONS
Secured loan against property calculator questions
What is a loan against property?
A loan secured on a property you own, which the lender can sell to recover the debt if you don't repay.
How much can I borrow against my property?
It depends on the property's value, what you already owe on it and the lender's loan-to-value limit, as well as your income.
Does a longer term cost more?
Yes. In the example, 20 years instead of 15 lowers the payment to £402.80 but adds £13,240.07 of interest.
Can I lose my property?
Your property may be repossessed if you don't keep up repayments on a loan secured on it.