The more you borrow, the lower the rate of interest. And at the top end of the borrowing scale,
personal loans are competing with mortgages, which usually have a lower interest rate.
While personal loans typically have rates between around 6 per cent and 18 per cent, it's possible to find a fixed rate mortgage at 5 per cent.
If you're borrowing £15,000 for some major work on the house, it's worth thinking very carefully whether it would be cheaper to get a mortgage than a personal loan loan.
Mortgage lenders are more than ready to extend existing mortgages or to tempt customers over from other lenders, particularly when increases in property prices have left many people with large amounts of equity in their home.
You can arrange an extended mortgage over a period similar to a personal loan, and the repayments, like
loans, are structured to pay off the debt at a fixed time.
But beware. Borrowers always have to be aware of the risk of losing their home if they can't keep up with the bigger monthly repayments.
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