Looking to raise capital? Is a second charge mortgage right for me?

If you are looking to release equity from your property to complete home improvements, consolidate debt, buy a new car or even a second home a second mortgage could be an option for you. Second charge mortgages have improved over the years and offer an option to not disrupt your mortgage.

What is a second charge mortgage?

Second charge mortgages are sometimes known as secured loans. They are essentially second mortgages secured against your property. They can be secured against your main residence or investment properties.

As second charges are now regulated by the Financial Conduct Authority they are now taken into consideration by advisers as a viable option to raise capital.

You may currently be on an interest only mortgage and if you were to remortgage it is possible you would have to change to a repayment product. With a second charge mortgage, you have the choice to leave the interest only mortgage as it is and look to raise additional capital with the secured charge.

Things to consider with your adviser

Second charge mortgages are generally more expensive than first charge mortgages. This is due to the risk the second charge lender takes being the ‘second’ charge. It is important that the option of remortgaging is also taken into consideration.

Do I really need a second charge?

If your credit score has changed for the negative a remortgage may mean securing a higher rate on the whole mortgage. With a second charge, you may be able to take the additional lending at the higher rate and retain the underlying mortgage rate.

Maybe you are tied into a long-fixed term mortgage with a large early redemption penalty? A secured loan could be arranged until you are ready to remortgage.

Do you need the money quicker than a remortgage can offer? With the strict mortgage underwriting sometimes lenders can take longer than expected.

If you are unsure or would like to just chat through your options give one of our advisers a call or click here to contact us.


You may have to pay an early repayment charge to your existing lender if you remortgage early.

Everyone’s financial position is different. Please seek professional advice from a regulated adviser.