Second charge mortgages explained
A second charge mortgage, often called a homeowner loan or secured loan, lets you borrow against your home without replacing your current mortgage. Our friendly specialists help homeowners across the UK work out whether it suits their plans and what it really costs.
What is a second charge mortgage?
A second charge mortgage is a loan secured against your home that sits alongside your existing mortgage. Your main mortgage lender keeps the first charge on the property, and the new lender takes a second charge. You then make two separate monthly payments: one for your mortgage and one for the second charge.
Is it the same as a homeowner loan?
Yes. Homeowner loan, secured loan and second charge mortgage are different names for the same type of borrowing. Because the loan is secured against your property, your home may be repossessed if you do not keep up the repayments.
When might a second charge suit you?
It may suit you if you are tied into a good mortgage rate or would pay a large early repayment charge to leave it, if your current lender will not lend you more, or if your circumstances have changed since you took out your mortgage, for example self-employment or a less-than-perfect credit record.
What can the money be used for?
Common reasons include home improvements, consolidating existing debts, paying a tax bill or helping family. If you are consolidating debts, remember that securing previously unsecured debts against your home puts your property at risk and a longer term can increase the total you repay.
How much could you borrow?
Lenders look at your property value, the balance on your existing mortgage, your income, your outgoings and your credit history. The combined borrowing across both charges must stay within the lender’s loan-to-value limits. An adviser can help you understand what is realistic; no amount is guaranteed.
Costs to compare
Second charge rates can be higher than first mortgage rates, and there may be broker, lender, valuation and legal fees. Compare the interest rate, every fee, any early repayment charges, the term and the total amount repayable against the alternatives: a remortgage, a further advance from your current lender or an unsecured loan.
How we can help
We arrange second charge mortgages and homeowner loans. We review your current mortgage, property, income, outgoings and plans, compare suitable options and explain the fees, risks and total repayment costs before you decide. An initial consultation is no obligation, and no lender approval is guaranteed.
Common questions
Do I need my mortgage lender’s permission for a second charge?
Some mortgage lenders must be told about or consent to a second charge. We check this as part of your application.
Is a second charge better than remortgaging?
Not always. A second charge can avoid early repayment charges on your current deal, but its rate may be higher. Compare the total cost of each option over the full term.
Can I get a second charge mortgage with bad credit?
Missed payments, defaults or CCJs affect which lenders and rates are open to you rather than always ruling you out. Specialist lenders may consider your circumstances, though rates may be higher and approval cannot be guaranteed.
How long does a second charge mortgage take?
It depends on the lender, the valuation and how quickly documents are provided. We gather what we need at the start to keep your case moving.
Free independent debt support: MoneyHelper or StepChange Debt Charity.
Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Think carefully before securing other debts against your home. A longer repayment term may increase the total amount you repay.
Mortgage availability and suitability depend on your individual circumstances. An initial consultation is no obligation; any applicable charges should be explained before you proceed.
Related guides: remortgaging to pay off debt, second charge mortgages, remortgage or loan? and releasing equity.
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