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Remortgaging is becoming more difficult and secured loans provide alternatives.
Mortgages make up the largest portion of household expenditure for most householders, so obviously people are keen to get the cheapest deal possible.
In the age of uncertain interest rates, fixed rate mortgages have become incredibly popular but there has been a downside for some people who may need to borrow extra cash for unforseen circumstances.
The advantage of fixed rate loans is the confidence given to the borrower in terms of budgeting - they know their repayments will not increase during the fixed rate period.
What the borrower gets in stability, they often lose in flexibility and should they need to change the terms of their home loan in order to borrow extra money and take advantage of any increased equity in their home, then the terms of the fixed rate deal can be limiting.
Some lenders will charge heavy redemption penalties if the borrower breaks the terms of the agreed loan and it is possibly cheaper for a new loan to be set up seperately using a secured loan arrangement.
That way the borrower leaves their fixed term loan in place, avoids any penalty charges and if the new loan is setup in a flexible manner then it can be paid off when the borrower sets up a new remortgage in the future.
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