The key difference
A remortgage replaces your existing mortgage with a new, larger one. You pay off the old mortgage and take out a new deal for a higher amount, with the extra cash released to you.
A secured loan (also called a second charge mortgage) sits alongside your existing mortgage. Your current mortgage stays in place; the secured loan is an additional loan also secured against your property.
When a remortgage is usually better
Your current deal is ending or has low ERCs. If your fixed rate is ending in the next few months, or you're already on your lender's SVR, remortgaging is usually the right move. You can borrow the additional amount at the same time as switching to a new rate.
You can get a lower overall rate. If current mortgage rates are competitive, combining your existing balance and the new borrowing into one remortgage at a low rate can be cheaper than keeping the existing mortgage and adding a higher-rate secured loan.
You want one simple payment. A remortgage consolidates everything into a single monthly payment to one lender.
When a secured loan is usually better
You have a low rate you don't want to lose. If you fixed at 1.5–2% when rates were low, remortgaging now would mean moving your entire balance onto a much higher rate. A secured loan lets you keep the old rate on your existing mortgage while only paying a higher rate on the new borrowing.
You face significant early repayment charges. ERCs can be 1–5% of your outstanding balance — potentially thousands of pounds. If you're mid-deal, a secured loan avoids triggering those charges.
You need to move faster than a remortgage allows. Secured loans can sometimes complete faster than a full remortgage, which can be useful if you need funds urgently.
Your income has changed. If your income has reduced since you took out your mortgage, you might not pass a lender's remortgage affordability assessment — but you might still qualify for a secured loan with a specialist lender.
The cost comparison
Remortgages typically have lower interest rates than secured loans, because they're assessed as first-charge lending. Secured loans carry a higher rate to reflect the higher risk to the lender (second in line for repayment if you default). However, triggering early repayment charges on a remortgage can easily wipe out the rate advantage. You need to compare total costs — not just the rate.
Getting the right advice
A specialist secured loan or remortgage broker will compare both options for your specific situation and tell you which is more cost-effective over the full term. The right answer genuinely varies from case to case. Nesto matches you with an independent broker who can assess both options and give you an honest recommendation — for free. Think carefully before securing any additional borrowing against your home.