Second Charge Mortgages

A second charge mortgage is an additional loan secured against a property that already has an existing (first charge) mortgage. It sits behind your main mortgage, which keeps priority if the property is ever sold or repossessed.

You keep your current main mortgage and take a separate second charge loan that is also secured on your home, usually over a set term with fixed or variable interest rates. Both payments have to be maintained, and lenders will assess your income, outgoings and credit commitments to check the borrowing is affordable.

A second charge may be considered where you want to raise additional funds but changing your current mortgage would not be in your best interests, for example because you are on a competitive rate or would face substantial early repayment charges. In other situations, remortgaging, a further advance or other forms of borrowing may be more suitable, which is why it is important to look at your full position before deciding.

Subject to lender criteria and regulation, second charge borrowing is commonly used for purposes such as home improvements, extensions, or other significant planned expenditure, and sometimes for consolidating existing debts where this is clearly suitable and affordable. The exact uses allowed will depend on the lender's terms and on your individual circumstances.

Because a second charge is secured on your property, you are taking on an extra mortgage-style commitment, and total borrowing and costs may increase over the long term. Second charge rates are often higher than first charge mortgage rates, and if you are consolidating existing debts there is a risk you could pay more interest overall by spreading payments over a longer term. Additionally, by consolidating, you are securing previously unsecured debt against your home.

We can help eligible homeowners across the UK who want to explore whether a second charge mortgage is appropriate for their needs. That includes clients with equity in their property, a UK-based income, and a clear objective for the borrowing, where affordability can be evidenced and the solution appears to offer fair value compared with alternatives.

No. Second charge lending will only be suitable for some clients and in some situations. Our job is to assess your circumstances, explain the options and help you decide whether proceeding is in your best interests, or whether another route may be more appropriate.