Why is it lower?
Secured loans, also known as second mortgages, are known for having a low interest rate. But second mortgages are just that - second. While they have claim on your home if you default on their loan, they do not have "first dibs" - if you default on your mortgage as well, you lose your home to the mortgage lender first, not to the secured loan lender. Therefore, they can lower their interest rates even more because there is essentially no risk on their loan.
Rates are also dependent on what type of loan you get. 30 year mortgages have a different interest rate than a 15 year mortgage, and that interest value varies a great deal itself depending on the state of the economy. 30 year mortgages can be at 6.35% and 15 year mortgages can be at 5.81%, despite both of them being based on the same home and the same risk (on base rates of 5%).
These rates change a great deal not only by the economy, however, but also by who has applied for the loans recently and whether or not they have paid them back.
Mortgage rates, of course, are the largest and most expensive loans one will ever get despite the low interest rates. Because of that, the fact that these rates vary are the reason that one needs to compare loans before they make a final decision. Comparing these loans is incredibly important, because a single .125% different equals several thousand pounds on your mortgage.
Despite how mortgage interest rates are secured, there is a part of your credit score that - especially during the credit crunch - decides whether or not you are going to even get alone, and whether or not you will be charged some additional percentage points against that loan in order to account for your risk.
That is why if you are going to be buying a home any time in the near future you need to try to improve your credit score. It is absolutely necessary that you make your credit score as high as you can, because the difference can be not only a few percentage points, but whether or not you can even qualify for the loan during the credit crisis .