A second charge mortgage (also called a secured loan or second mortgage) is an additional loan secured against your property, sitting behind your existing mortgage.
If you’re on a competitive fixed rate with 2+ years remaining, remortgaging to release equity means losing that rate and potentially paying thousands more in interest. A second charge lets you keep it.
Breaking a fixed-rate mortgage early can trigger ERCs of 2-5% of your loan amount. On a £300,000 mortgage, that’s £6,000-£15,000. A second charge avoids this entirely.
Second charges can complete faster than full remortgages because you’re not changing your main mortgage lender.
If your income has become more complex since your original mortgage (self-employment, multiple income streams), getting a second charge might be easier than re-proving income to a new first-charge lender.
Release £20,000-£100,000+ for extensions, loft conversions, or major renovations that add value to your property. The improvement may increase your home's value more than the loan costs.
Consolidate expensive credit cards, personal loans, or car finance into one lower monthly payment. Warning: you're securing previously unsecured debt against your home, so only do this if you're confident in repaying.
Raise capital to invest in your business, purchase equipment, or bridge cash flow gaps without giving up equity in your company.
Fund weddings, once-in-a-lifetime experiences, or unexpected major expenses without depleting all your savings.
Use equity in your current home to fund a deposit on a second property or investment, without remortgaging your main residence.
Fund university fees or private education when other options aren't sufficient.
Current mortgage: £250,000 at 2.5% fixed for 3 more years (ERC: 3% = £7,500)
Need: £40,000
In this scenario, the second charge saves £11,900 in the first year.
We’ll run these numbers for your specific situation.
Typically 4-10% depending on:
Loan Amounts: £10,000 to £500,000+ (though most fall in the £15,000-£100,000 range)
Loan Terms: 3-30 years (though typically 5-15 years for most borrowers)
Fees to Expect:
Combined Loan-to-Value: Most lenders will lend up to 75-85% combined LTV (first mortgage + second charge total).
Example: Property worth £400,000, existing mortgage £200,000 = 50% LTV. You could potentially borrow another £100,000 (taking combined LTV to 75%).
They’ll be notified (as the second lender needs to register their charge), but they can’t refuse it unless your mortgage terms specifically prohibit second charges (rare).
Yes, though you’ll typically need 2 years’ accounts or SA302s to prove income.
Some second charge lenders specialise in adverse credit cases, though rates will be higher. We’ll find the most competitive option for your situation.
Usually yes, though early repayment charges may apply in the first 1-3 years. Check the specific product terms. We’ll tailor the deal to fit with your needs.
Most second charges are portable (you can take them to your new property) or you repay them from your sale proceeds. Discuss this before taking out the loan.
Yes. Both your first and second charge mortgages are secured against your home. If you can’t make payments on either, your home could be repossessed. Only borrow what you can afford.
In theory yes, though each lender will be in third, fourth position etc., making it progressively harder and more expensive. Most people have just one second charge.
Before we recommend a second charge, we’ll discuss:
Affordability: Can you comfortably afford both mortgage payments from your income?
Purpose: Is this the right financial tool for what you need? (Sometimes personal loans, credit cards, or remortgaging might be more suitable)
Alternative Options: Have you explored all other options, including remortgaging, personal loans, or delaying the expense?
Long-term Impact: How will this affect your financial position in 3, 5, 10 years?
Exit Strategy: How will you eventually repay this—via remortgage, property sale, or paying it down over time?
We’re here to find the right solution, even if that means advising you that a second charge isn’t suitable.