Second-Charge Mortgages.
Unlock equity in your home without remortgaging.
Second-charge mortgages — also known as second mortgages or homeowner loans — are secured loans that sit behind your existing mortgage. They let you raise money against the equity in your home without disturbing your current mortgage deal.
What are second-charge loans?
Taking out a second-charge loan means you'll have two separate mortgages secured against your home. The second mortgage sits below your main mortgage in terms of priority — your main mortgage will always be repaid first in the event of a sale or default.
How do second-charge loans work?
A second-charge mortgage uses equity in your home as security for an additional loan. Equity is the portion of your property you own outright — the market value minus the balance of your primary mortgage.
Second-charge lending works similarly to your main mortgage: when you sell the property, you use the proceeds to repay your main mortgage and then the second-charge loan.
Why choose a second-charge loan?
Second-charge mortgages are often used as an alternative to remortgaging — particularly when remortgaging would be expensive or disruptive.
- 01Your credit score has dropped since taking out your first mortgage
- 02You're on a competitive fixed rate with early repayment charges
- 03You have an interest-only mortgage you don't want to disturb
- 04A change in circumstances means remortgaging would push up the rate on your entire mortgage
- 05A second charge works out cheaper overall than remortgaging once fees are factored in
What can a second-charge loan be used for?
Second-charge finance is flexible and can be used for a wide range of purposes, including home improvements, debt consolidation, funding a wedding, business investment or covering a major one-off cost.
Loan sizes typically range from around £5,000 to £50,000+, depending on the equity available in your property. The more equity you have, the more you can potentially borrow — and you can usually do so without switching mortgage lender.
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FCA Reference Number: 953250