Second Charge Mortgages
Raise capital secured against your home without disturbing your existing mortgage — ideal when remortgaging isn't the right option.
What is a Second Charge Mortgage?
A second charge mortgage (also known as a secured loan) is a loan secured against your property in addition to your existing mortgage. It sits behind your first mortgage in priority, which is why it's called a "second charge."
This type of borrowing can be an effective way to raise capital when remortgaging isn't suitable — for example, if you're tied into a fixed rate with high early repayment charges, or if your circumstances have changed since you took out your original mortgage.
Second Charge vs Remortgage
Second Charge may be better when:
- High early repayment charges on your first mortgage
- Your first mortgage has a very competitive rate
- Your credit profile has changed since your first mortgage
- You need funds quickly
- You want to keep your existing mortgage terms
Remortgage may be better when:
- No or low early repayment charges
- Better rates available in the market
- Your deal is ending soon
- You want to consolidate all borrowing
- You want a single monthly payment
Common Uses for Second Charge Mortgages
How It Works
A second charge mortgage is secured against the equity in your home — the difference between your property's value and the amount you owe on your first mortgage. Lenders will assess your income, outgoings, credit history, and the amount of equity available before making a lending decision.
Interest rates on second charge mortgages are typically higher than first charge mortgages, reflecting the additional risk to the lender. However, they can still be more cost-effective than unsecured borrowing for larger amounts.
Example: If your home is worth £300,000 and you have £150,000 outstanding on your first mortgage, you have £150,000 of equity. A lender might allow you to borrow up to 80–85% of the property value in total, meaning you could potentially raise up to £90,000–£105,000 via a second charge.
Key Features
Important Information
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. The guidance contained within this website is subject to the UK regulatory regime.
Want to Raise Capital from Your Home?
Our advisers will assess whether a second charge mortgage is right for your circumstances. Free consultation.