A secured loan works in a very similar way to a regular mortgage. You will make a monthly repayment towards the secured loan so that it is paid off when you reach the end of your mortgage term (which could be between three and 30 years).
In the early years of your secured loan, a larger chunk of your repayments will be paying interest on the amount you've borrowed, and a smaller part will pay off your capital. But the more capital you pay off, the lower your interest repayments will be. Once you get to the end of your term and providing you’ve made payments in full and on-time, the capital you’ve borrowed will be repaid.
The amount that the mortgage will cost you to pay off will be determined by the term of your secured loan (how long you take out the loan for) and your interest rate.
Longer-term mortgages and secured loans cost less per month because the repayments are spread over a longer period. However, this means your mortgage or secured loan will cost you more overall because you will be charged more interest over a longer period.
Shorter-term mortgages and secured loans have higher monthly repayments, but this means you’ll pay off the balance quicker. As a result, you’ll own your property outright sooner and you won’t be charged as much interest.