Paragon Bank homeowner loans

Paragon Bank offers secured loans of £15,000 to £500,000 to UK homeowners, repayable over 5 to 25 years. It does not lend directly to its customers, so you'll need to apply through one of its brokers.

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Paragon Bank

Paragon Bank has helped more than 1.5 million customers with their finances since it was founded in 1985. As well as offering homeowner loans, it also arranges mortgages, unsecured loans, motor finance and savings accounts. The bank is part of the Paragon Banking Group, which is one of the FTSE 250.

To receive a homeowner loan with Paragon Bank, you will need to apply through a broker. Paragon Bank itself will act as the lender. Bear in mind that the broker will receive a fee from Paragon Bank for its services. Always compare lenders to ensure you’re getting the most affordable deal for your circumstances before you go ahead.

Whether you’re consolidating debt or paying for a wedding, Paragon Bank could help with a homeowner loan – also known as a “second-charge mortgage” – of up to £500,000. It’s easy to apply online for a Paragon Bank loan by using one of its registered brokers.

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warning icon Warning: your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured on it.

What is a second-charge mortgage?

In the same way as your original (first-charge) mortgage, a second-charge mortgage is a type of loan that’s secured against your home. It’s wise to think carefully before taking out a second-charge mortgage, as your property will be at risk if you don’t keep up repayments.

Full guide to second charge mortgages

Key features of a Paragon Bank homeowner loan at a glance

  • Borrow £15,000 to £500,000. The amount you can borrow will be based on the value of your home, the outstanding mortgage and what you can afford.
  • Repay over 60 to 300 months. Your repayment term will depend on your individual needs and circumstances.
  • Variable or fixed rates. You can choose to fix your interest rate for 2 to 5 years to help you budget for the repayments.
  • Security. Your home will be used as security on your loan. Missing repayments will put your property at risk, so always ensure that you can afford the loan you are asking for before you apply.
  • Product fee. You will be charged a one-off fee when you take out your loan.
  • Overpayments. You can make additional payments to your loan, but they must be of at least £500 each time.
  • Early settlement. You can pay off your loan early in full at any time by contacting Paragon Bank for a settlement figure. There may be a fee for doing this.

Am I eligible for a Paragon Bank homeowner loan?

You should only apply for a Paragon Bank homeowner loan if you are certain you can meet the repayment terms. You must also meet the following criteria:

  • Be over 21 years old
  • Be employed or self-employed
  • Be resident in England, Wales or mainland Scotland.
  • Be a homeowner. The property you are securing your loan against must be your main home.
  • Already have a first-charge mortgage on your home.

Paragon Bank states that these loans should not be used for business purposes, cosmetic surgery, settlement of outstanding tax, installation of solar panels, financial speculation, or funding towards marital settlement.

How can I apply?

  • Paragon Bank does not sell its second-charge mortgages directly to customers. They are only available through a number of mortgage brokers, or ‘intermediaries’, who specialise in this market. You can contact Paragon Bank to find a suitable company to apply through.
  • Once you have chosen an intermediary, they will ask about your circumstances and finances and about your requirements. They will then recommend a loan that is most suitable for your needs and circumstances. They will also be responsible for arranging your loan.
  • Your intermediary should explain the terms and conditions of the loan, as well as what the various documents mean. You should always ask for an explanation if you don’t understand any part of your second-charge mortgage agreement, including the terms and conditions.
  • If, after talking to your intermediary, you are still in any doubt you should seek independent legal and/or financial advice. Please be aware that your intermediary may charge you a fee for their service. Always check this before you go ahead.

Alternatives

Before taking out a homeowner loan, you should consider all of your options carefully. Other ways of gaining funds secured against your home or an asset include:

  • Car loans. These secured loans can be for new or used cars. You can find car loans from most banks and credit unions, as well as dealerships and standalone car loan lenders. You can usually repay the loan at any time by returning the car.
  • Line of credit loans. If you’re looking to renovate, invest in property, go on a holiday or buy a new car, you can consider this type of loan. Also called a ‘home equity’ loan, it can be drawn on continually based on the equity held in your property. This is a flexible way to access funds, which could suit you if the amount of credit you need is going to change over time.
  • Personal asset secured loans. High-priced assets such as boats, motorbikes and jewellery are accepted by some lenders as a guarantee. Your item or collection of items is valued and then used as security, allowing you to take out the loan you need. You generally won’t find these loans at major banks.

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