Calculate monthly repayments for a secured loan against your property, including combined LTV assessment.
This calculator provides estimates for guidance only. It does not constitute financial advice. Secured loans use your property as collateral; your home may be repossessed if you do not keep up repayments. Always seek independent financial advice.
A secured loan, also known as a second charge mortgage or homeowner loan, is a form of borrowing secured against your property. Unlike an unsecured personal loan, a secured loan gives the lender the right to take possession of your home if you fail to keep up with repayments. In exchange for this security, lenders typically offer larger loan amounts, longer terms, and lower interest rates than unsecured alternatives. Secured loans sit as a second charge behind your existing mortgage. This means that if you sell your property or default on payments, your first mortgage lender is paid before the secured loan lender. Because of this subordinate position, secured loan rates are usually higher than first mortgage rates but lower than unsecured personal loan rates for equivalent amounts. In the UK, secured loans are regulated by the Financial Conduct Authority under the Mortgage Credit Directive. Lenders must conduct thorough affordability assessments and provide clear information about the risks of secured borrowing. Typical uses include home improvements, debt consolidation, school fees, or large purchases where the amount needed exceeds what is available through unsecured lending. The amount you can borrow with a secured loan depends on the equity in your property. Lenders assess the combined loan-to-value (LTV) ratio, which includes both your existing mortgage and the new secured loan. Most lenders require the combined LTV to remain below 80-85%, though some specialist lenders will go higher at increased rates.
To calculate the cost of a secured loan: 1. Enter the loan amount you wish to borrow. Secured loans typically range from GBP 10,000 to GBP 500,000, depending on your property equity and lender policies. 2. Enter the annual interest rate. Secured loan rates in the UK typically range from 3% to 15% APR, depending on the combined LTV, loan size, term, and your credit profile. 3. Set the loan term in years. Secured loans are available from 3 to 25 years. Longer terms reduce monthly payments but increase total interest. Choose a term that balances affordability with total cost. 4. Enter your property value. Use a recent valuation or estimate. The lender will arrange their own valuation during the application process. 5. Enter your existing mortgage balance. This is the current outstanding amount on your first mortgage. Together with the new loan, this determines the combined LTV. 6. Review the results. The calculator shows your monthly payment, total repayable, total interest, combined LTV, and any warnings about high LTV ratios.
Secured loan monthly payments are calculated using the same annuity formula as a standard repayment mortgage: Monthly Payment = P x r(1+r)^n / ((1+r)^n - 1), where P is the loan amount, r is the monthly interest rate (annual rate / 12 / 100), and n is the term in months (years x 12). The combined LTV is calculated as: Combined LTV = (Existing Mortgage + New Loan) / Property Value x 100. For example, with a property worth GBP 300,000, an existing mortgage of GBP 200,000, and a new secured loan of GBP 30,000: Combined LTV = (200,000 + 30,000) / 300,000 x 100 = 76.67%. For a GBP 30,000 secured loan at 6% over 10 years (120 months): the monthly rate is 0.5%, and the monthly payment is approximately GBP 333.06. The total repayable is GBP 333.06 x 120 = GBP 39,967, and the total interest is GBP 9,967. The calculator flags a warning if the combined LTV exceeds 85%, as this limits lender options and typically results in higher rates.
Inputs: Loan: GBP 30,000, Rate: 6%, Term: 10 years, Property: GBP 300,000, Existing mortgage: GBP 200,000
Inputs: Loan: GBP 50,000, Rate: 5.5%, Term: 15 years, Property: GBP 400,000, Existing mortgage: GBP 250,000
Inputs: Loan: GBP 80,000, Rate: 8%, Term: 20 years, Property: GBP 300,000, Existing mortgage: GBP 200,000
Before taking out a secured loan, carefully consider whether the borrowing is necessary and affordable. Your home is at risk if you cannot maintain repayments. Free, impartial debt advice is available from StepChange, Citizens Advice, and the National Debtline. Compare secured loan offers from multiple lenders, including specialist secured loan brokers who may have access to products not available directly. Pay attention to the total cost of borrowing, not just the monthly payment. A lower monthly payment over a longer term often means paying significantly more in total interest. Some secured loans come with early repayment charges, which penalise you for paying off the loan before the agreed term. Check the terms carefully if you think you might want to repay early or if you plan to sell your property before the loan term ends. If you sell your property, the secured loan must be repaid in full from the sale proceeds after your first mortgage is cleared.