Raise money against your home without replacing your existing mortgage.
- Mortgage advice from real people
- Directly authorised by the FCA
Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Think carefully before securing other debts against your home.
What’s a second charge mortgage?
A second charge mortgage is a separate loan secured against a property that already has an existing mortgage. Your original mortgage remains the first charge on the property. The new lender takes a second charge, which means the first mortgage lender has priority over the proceeds if the property has to be sold.
Unlike a remortgage, taking a second charge normally means your existing mortgage remains in place with its current lender, rate and terms.
Second charge mortgages are also commonly referred to as second mortgages or secured loans.
How much you can borrow and the rate available will depend on factors including your property’s value, existing mortgage balance, available equity, income, credit history and lender criteria.
Why are you looking to borrow more?
A second charge mortgage can be used for a range of purposes. Start with what you’re trying to achieve.
I want to improve my home
Use available equity to potentially fund an extension, renovation, new kitchen or other major home improvements.
I want to consolidate existing debts
A second charge mortgage may allow you to combine some borrowing into one secured loan, but this can increase the repayment period and total interest paid.
I want to keep my existing mortgage
If you have a competitive first mortgage or would face an early repayment charge by leaving it, a second charge can potentially allow you to borrow more without replacing that mortgage.
My existing lender won’t lend me more
If a further advance is not available or suitable, another lender may potentially consider a second charge mortgage.
I want to raise money for another property
Some homeowners use equity in one property to raise funds towards another property purchase, subject to lender criteria and affordability.
My circumstances are more complicated
Self-employed income, changing credit history or other factors may affect which lenders and borrowing options are available.
How much can you borrow with a second charge mortgage?
There is no single borrowing limit that applies to everyone.
A larger amount of available equity does not automatically mean a lender will allow you to borrow all of it. Affordability must also be assessed.
A lender may consider:
- Your property’s current value
- The amount outstanding on your first mortgage
- Your available equity
- Combined loan-to-value
- Income
- Household expenditure
- Existing credit commitments
- Credit history
- The purpose of the borrowing
- Your proposed repayment term
Want to talk it through?
Call our friendly team on 0800 888 6500 for free, no-obligation advice or start online with our calculator.
Things to consider when taking out a second charge
Depending on your circumstances, you may need to budget for:
Conveyancing costs
You’ll normally need a solicitor or conveyancer for the additional finance.
Get a quote nowMortgage fees
Potential costs can include product, arrangement, valuation or broker fees depending on the mortgage and service.
Surveys
You may choose to commission a property survey in addition to the lender’s valuation.
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What if your circumstances have changed?
A lot may have changed since you took out your current mortgage.
I’m now self-employed
If you’ve become self-employed, lenders may assess your income differently.
Read our guide to self-employed mortgagesMy income is more complex
Bonuses, overtime, commission, contract work or multiple sources of income can be treated differently between lenders.
Read our guide to how income is calculatedMy credit history has changed
Missed payments or other credit issues can affect lender choice but do not automatically prevent additional finance.
Read our guide to mortgages with adverse creditGuides and insights
Borrowing more deserves a proper comparison
A second charge mortgage can be useful in the right circumstances, but it should not automatically be the answer simply because you have equity in your home.
Morrow helps you understand both the product and the alternatives.
Compare different routes
We’ll look at second charge mortgages alongside remortgaging, further advances and other relevant borrowing options.
Specialist lender access
We can explore specialist second charge lenders and their different eligibility criteria.
Look beyond the monthly payment
We’ll help you understand rates, fees, mortgage terms and total borrowing costs.
Advice built around your circumstances
Your mortgage, property, income, credit history and purpose for borrowing all matter.