A loan against property is a loan which uses your home as collateral. It’s usually used for things like home improvements, as an alternative to taking out a personal loan, or using your credit card.

You can only take out a loan against your property if you own all or part of your home (known as the equity in your property.) You can borrow money in different ways against your property’s value–the major risk being if you don’t keep up with your repayments, you could lose your home because the lender can take action to repossess. When you apply for a loan against your property, the lender will look at how much equity you have in your home, your income and outgoings, and your credit score. They’ll then use this to work out how much you can borrow and the interest rate you’ll be offered.