If remortgaging isn’t an option for you – either through circumstance or financial challenges – then a secured loan could help. Ryan McGrath of Pepper Money explains more

1.8 million people’s fixed-rate mortgage deals are set to end in 2025, creating a pivotal moment for homeowners to consider their financial situation and next steps.

But for many of them, mortgage rates are two, three or even four times higher than when they last renewed their deal.

With energy bills, council tax, and water bills all rising, this is creating the perfect storm for homeowners.

Our Specialist Lending Study found that 8.38 million people (16% of the UK adult population) have experienced adverse credit in the last three years, the highest level recorded since the study began in autumn 2019.

And that’s not all. Nearly 30% of people with adverse credit have outstanding debts exceeding £5,000 and 41% report that their debt has increased in the past year.

Nearly two thirds (63%) of respondents report a decrease in disposable income, with 82% of those with adverse credit saying that an additional £100 in monthly bills would severely impact their finances.

What other options do I have if I can’t remortgage?

Recent adverse credit can make remortgaging more difficult or result in less favourable terms.

Secured loans, also referred to as homeowner loans, can often cater more flexibly to customers with complex credit histories, allowing homeowners to borrow at more favourable rates, which may not always be possible when remortgaging, especially if their income isn’t straightforward due to being self-employed or having multiple income streams.

For those looking to consolidate high-interest debts, a secured loan can be more accessible and affordable compared to a remortgage, especially if their circumstances have changed since they agreed their original mortgage.

Stay stable amid rising interest rates and cost of living pressures

Let’s say a homeowner has a fixed-rate mortgage that’s still favourable despite the current economic climate. To avoid losing this lower rate, they could opt for a secured loan rather than getting a product transfer with their existing lender. This would enable them to access additional funds in order to consolidate debt, pay necessary expenses or undertake a home improvement project which a product transfer does not allow for.

Opting for a secured loan instead of a product transfer also means that customers don’t need to go through the full application process which would be needed when changing a primary mortgage deal, enabling homeowners to access funds quicker.

Another option is remortgaging, which involves replacing a customer’s existing mortgage and can impact any favourable terms on the current mortgages. Similarly, if a customer’s credit score or financial situation has changed negatively since they first took out their mortgage, this could result in less favourable terms being offered.

Choosing a secured loan preserves the existing mortgage’s favourable terms while offering quick access to funds without the complexities of remortgaging, and with more flexible repayment options.

Unlocking financial flexibility

The financial challenges faced by homeowners are only set to intensify. With mortgage rates having risen sharply previously and now beginning to reduce and settle. However, when you consider living costs continuing to place significant strain on monthly budgets, the need for flexible and accessible solutions is greater than ever.

Secured loans are a powerful tool to navigate this ‘perfect storm’, offering a lifeline for those with adverse credit, complex income, or fixed-rate mortgages they want to preserve.

By unlocking the equity in their homes, homeowners can consolidate debts, fund essential expenses, or invest in home improvements, all while maintaining financial stability. At a time when resilience is crucial, secured loans provide a path forward for individuals and families seeking to adapt to changing circumstances.

For the 1.8 million homeowners whose fixed rates are ending in 2025, now is the moment to explore the options available and make informed decisions to secure their financial future. Secured loans, backed by professional advice and responsible borrowing, could be the key to unlocking greater financial flexibility and confidence.

Let’s start the conversation and empower homeowners to thrive in the face of uncertainty.

Ryan McGrath, director of second charge mortgages at Pepper Money