Paragon Bank homeowner loans

Paragon Bank offers secured loans of £20,000 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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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured on it.

Whether you’re consolidating debt or improving your home, Paragon Bank could help with a homeowner loan – also known as a “second-charge mortgage”. To get a homeowner loan with Paragon Bank, you will need to apply through a broker (which will receive a fee for its services).

Compare Paragon secured loans

Table: sorted by overall cost for comparison (representative APRC)
Updated December 7th, 2019
Name Product Maximum LTV Loan amounts Loan terms Overall cost for comparison
65%
£100,000 to £500,000
5 to 25 years
3.8% APRC
65%
£50,000 to £500,000
5 to 25 years
3.8% APRC
65%
£50,000 to £500,000
5 to 25 years
4% APRC
60%
£100,000 to £500,000
5 to 25 years
4% APRC
70%
£50,000 to £500,000
5 to 25 years
4.1% APRC
70%
£50,000 to £500,000
5 to 25 years
4.3% APRC
75%
£20,000 to £250,000
5 to 25 years
4.9% APRC
65%
£20,000 to £200,000
5 to 25 years
5.1% APRC
75%
£20,000 to £250,000
5 to 25 years
5.1% APRC
65%
£20,000 to £200,000
5 to 25 years
5.3% APRC
65%
£30,000 to £49,999
5 to 25 years
5.5% APRC
65%
£30,000 to £49,999
5 to 25 years
5.5% APRC

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Overall representative example
If you borrowed £40,000 over a 14-year term at 8.8% p.a. (variable), you would make 168 monthly payments of £461.49 and pay £77,530.32 overall, which includes interest of £33,040.32, a broker fee of £3,995 and a lender fee of £495.00. The overall cost for comparison is 11.3% APRC representative.

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 £20,000 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, up to a maximum LTV of 85%
  • Repay over 5 to 25 years. 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.

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.

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 doesn’t 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 borrowing large sums include:

  • Remortgaging. Remortgaging is when you switch to a new mortgage, with the same or a new lender. In the process you can renegotiate the loan – potentially releasing equity.
  • Unsecured personal loans. If you have excellent credit and would be able to afford it, most lenders offering unsecured loans will stretch to £25,000, or in some cases £30,000. Some big high-street banks will go up to £50,000 for existing customers, but again, you’ll need to get through the affordability and credit checks.
  • Car finance. If you need money to buy a new vehicle, there are a wide range of car finance options you could consider.

Frequently asked questions

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