Aren't mortgage interest rates way lower than any loan? You can overpay too if you want to clear the interest charges quicker.
They are lower, but you are paying that interest rate on a larger amount.
For example interest rates looking at 5 year fixed mortgage products based on a 20 year amortisation period, mortgages @ 90% LTV are around 2.4%, but on mortgages @ 80% LTV they are around 2%.
Loans for £10k can be obtained @ 3.5%.
3.5% on £10k over a 5 year repayment profile costs £182 per month to repay for a total interest charge of £913.
Keeping it simple and using a £100k purchase price, an 80% LTV mortgage with a 2% interest rate would cost £405 per month in the same 5 year period cost £7,169 in interest.
Total monthly payment £587
Total interest paid: £8,082
Total debt after 5 years: £62,890.
Now comparing against a 90% LTV mortgage at 2.4% interest.
The monthly cost of the mortgage is £472, but lets overpay so that the total monthly payment is the same as the loan example above.
Total monthly Payment: £587
Total interest paid: £9,297
Total debt after 5 years: £64,047.
In this example, paying 0.4% extra on £90k costs more then paying 3.5% on £10k over the same period of time.
Obviously the amount the OP needs to borrow to drop the LTV % compared against the loan rate that can be obtained is a massive driver, and then factoring in that personal loans tend to cap out at £25k, and often larger amounts come with higher interest rates.
More detail required to provide a clearer answer.
