Rates on secured loans are becoming more competitive than those on the average personal loan, according to financial comparison website MoneyExpert.

Research from the website found the average APR on a £15,000 unsecured loan is around 8.44%, while secured loan customers – people who secure a loan against their property – looking to borrow the same amount, can get interest rates of 5.9%.

Furthermore, there has been an 85% increase in homeowner loan applications in the quarter ending January 2008, compared to the quarter ending October 2007, MoneyExpert said.

Sean Gardner, chief executive of MoneyExpert, said: “Historically, secured loans were seen as something of a product of last resort. But these days they are far more attractive to homeowners who are looking for a competitive rate of interest. While these low rates can include an arrangement fee of as much as £995, the monthly savings to be made by opting for a homeowner loan can still be substantial.”