MRT1 LO7: Additional forms of security, guarantors and higher lending charges
1,150 words · checked 2026-10-30 · Pro
The property is the lender's main security, but sometimes it is not enough on its own. The loan may be a high proportion of the value, or the borrower's income may be too weak. LO7 of the CeMAP® MRT1 unit covers the extra protection a lender can take and what it means for the lender, the borrower and anyone else who gives security.
Why lenders take additional security
The risk to a lender grows as the loan-to-value (LTV) rises: if prices fall or the borrower defaults, there is less equity to absorb the loss. Extra security either transfers the loss to someone else (an insurer or guarantor) or adds another asset the lender can call on.
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