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Second mortgage

If you are already a property owner and looking to raise some additional funds and not in a situation to do remortgage, then you may look for a second charge option. Second charge are often called second mortgage because they have secondary priority behind your main (or first charge) mortgage.

Second charge is a secured loan, which means they use the borrower’s home as security. Many people use them to raise money instead of remortgaging but there are some things you need to be aware of before you apply. A second charge mortgage allows you to use any equity you have in your home as security against another loan. This means you will have two mortgages on your home.


When a second charge could be a good option?

There are several reasons why a second charge mortgage might be worth considering:

  • If you need to borrow some money but struggling to remortgage due to your current circumstances i.e. poor credit, low income etc
  • If your credit rating has gone down since taking out your first mortgage, remortgaging could mean you end up paying more interest on your entire mortgage, rather than just on the extra amount you want to borrow.
  • If your mortgage has a high early repayment charge, it might be cheaper for you to take out a second charge mortgage rather than to remortgage.
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