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Homeowner loans
Homeowner loans are a form of borrowing available to people who own their own property.
The loan that is taken out is secured against the home – meaning if the borrower fails to make payments their home can be at risk.
However, this added security from the lender's perspective means that borrowers can generally take out a homeowner loan for larger amounts and at less interest than they would be able to take out an unsecured or personal loan for.
Homeowner loans can also be taken out over a longer period than a personal loan – i.e. over a repayment period of up to 30 years – making monthly repayments lower initially.
However, spreading the payments over a longer term will generally result in a larger amount being paid back in total, if at lower monthly rates.
The credit rating of the borrower also influences how high interest rates are.
Repayments on a homeowner loan, along with the interest rate charged, tend to be fixed for the duration of the loan.
There is a large difference between the interest rates charged by providers, so borrowers are advised to shop around to find the cheapest homeowner loan for them.