Secured loan market ‘opening up’

Posted 2008-03-7

Continued tightening of the unsecured money markets is making homeowners loans more affordable, new research has found.

MoneyExpert.com said that the lowest rate currently available on a secured loan is 5.9 per cent and that average personal loan rates are now just 6.4 per cent for £5,000 loan and 8.44 per cent for a £15,000 one.

The financial website noted an 85 per cent surge in demand for homeowner loans in 2007 Q4 against the previous quarter, suggesting that consumers are opening up to the idea of using their dwelling as collateral in an increasingly credit-crunched society.

"Historically, secured loans were seen as something of a product of last resort, but these days they are far more attractive to homeowners who are looking for a competitive rate of interest," commented MoneyExpert.com chief executive Sean Gardner.

However, he went on to describe secured loans as a "niche" area of the market and said that borrowers should not underestimate the potentially devastating consequences of lapsing on repayments.

Some 27,100 homes were repossessed in 2007 and according to the Royal Institute of Chartered Surveyors that figure is set to soar to 45,000 this year.

Leave a Reply