Pricing
Annual Percentage Rate of Charge (APRC)
APRC combines the interest rate, all compulsory fees, and any rate changes (such as revert rates) into a single figure expressed as an annual percentage. It's the most reliable number for comparing secured loan products.
Arrangement Fee
An arrangement fee is the lender's charge for setting up a secured loan. It typically ranges from £495 to £1,995 and can usually be added to the loan rather than paid upfront.
Early Repayment Charge (ERC)
An early repayment charge is a penalty fee applied when you repay a secured loan during its initial fixed-rate period. ERCs typically range from 1% to 5% of the outstanding balance.
Fixed Rate
A fixed-rate secured loan locks the interest rate for an initial period — typically 2, 3, or 5 years — providing payment certainty during that time.
Initial Rate
The initial rate is the interest rate charged during the fixed-rate period at the start of a secured loan — typically 2 or 5 years — before the rate switches to the variable revert rate.
Loan to Value (LTV)
Loan to value is your existing mortgage plus the new secured loan, expressed as a percentage of the property's value. It's the single biggest factor in determining your secured loan rate.
Revert Rate
The revert rate is the variable interest rate that applies to a secured loan after its initial fixed-rate period ends. It's usually higher than the initial rate.
Loan structure
First Charge
The first charge is the senior loan secured against your property — usually your main mortgage. It's repaid first from any sale proceeds before any other charges.
Further Advance
A further advance is additional borrowing from your existing first-charge mortgage lender, sitting on top of your current mortgage rather than as a separate loan.
Homeowner Loan
A homeowner loan is another name for a secured loan or second charge mortgage. The product is identical — only the marketing label differs.
Remortgage
A remortgage replaces your existing first-charge mortgage with a new one — usually on different terms, often with a different lender, and sometimes for a larger sum.
Second Charge Mortgage
A second charge mortgage is a loan secured against your property that ranks behind your existing mortgage. It's the technical name for what's also called a secured loan or homeowner loan.
Secured Loan
A secured loan is borrowing where the loan is secured against an asset you own — usually your home. UK secured loans are regulated as second charge mortgages by the FCA.
Process
Adverse Credit
Adverse credit covers any negative entries on your credit file — missed payments, defaults, CCJs, IVAs, or bankruptcy — that affect a lender's view of your reliability.
County Court Judgment (CCJ)
A County Court Judgment is a court ruling against someone who hasn't paid a debt. CCJs appear on credit files for six years and affect lender risk assessment.
Default
A default is a notice on your credit file recording that you fell substantially behind on a credit agreement, after which the lender closed the account. Defaults remain on credit files for six years.
Property Valuation
A valuation is the lender's assessment of your property's market value, used to confirm there's enough equity to support the secured loan you're applying for.
Underwriting
Underwriting is the lender's detailed review of your application — credit history, income, affordability, and property — before deciding whether to lend.
Regulation
ESIS
The European Standardised Information Sheet (ESIS) is the statutory illustration document UK secured loan lenders must provide. It shows the loan terms, total cost, monthly payment, and APRC in a standardised format.
FCA Authorisation
FCA authorisation is the regulatory permission required for any UK firm to offer or broker secured loans. Authorised firms appear on the FCA Register with a unique Firm Reference Number (FRN).
MCD 2016
The Mortgage Credit Directive (MCD) is the 2016 EU-derived regulation that brought secured loans (second charge mortgages) under FCA mortgage rules, alongside first-charge mortgages.
Reflection Period
The reflection period is the minimum 7-day window after a secured loan offer is made during which you can change your mind without penalty. It's a statutory consumer protection under MCOB rules.