With an existing lifetime mortgage in place, it’s very unusual for another lender to be allowed to take a second charge over the same property. Most equity release providers want to keep their position clean, because the property value is the safety net that ultimately repays the loan.
In other words, the question is often less “which companies allow it?” and more “what are the realistic ways to raise the extra £50,000 without breaking the first lender’s rules?”.
Why second charges are so difficult with equity release
A second charge lender sits behind the lifetime mortgage provider. That creates two practical problems:
- Consent is normally required. A second charge lender will usually need the first charge holder’s permission to register their charge.
- The first lender’s security is diluted. Equity release providers rely on the remaining equity and their own terms (including the no-negative-equity framework) to manage risk over an unknown timescale.
The Equity Release Council’s standards also point advisers to approach the first charge holder first where a second charge is being considered, which reflects how rarely this is straightforward in practice.
The most realistic route: raise more with your existing lifetime mortgage provider
Given you’ve got an unused cash facility of £65,000, this is usually the first avenue to explore.
Depending on your provider and product type, additional borrowing may be available via:
- drawdown (using the pre-agreed facility), or
- a further advance (new extra borrowing on top of the existing plan, subject to criteria).
This matters because it avoids the biggest hurdle: getting a different lender’s second charge approved.
What you should check on your current plan
Ask your provider (or adviser) for:
- an up-to-date redemption statement showing the ERC and total balance
- whether using the drawdown facility triggers any new product terms or charges
- whether a further advance is available and how it’s priced
- whether taking funds as drawdown changes the ERC profile on the whole plan (provider-specific)
If you specifically want “interest-only for up to 7 years”
A standard interest-only mortgage at 68 for a short, defined term can be possible, but it hinges on affordability and lender policy. Two alternatives are more common in later life:
Retirement Interest-Only mortgage (RIO)
You pay the interest monthly and the loan is typically repaid when the property is sold (for example on death or moving into long-term care). It can be a better fit than a short-term interest-only deal if you want predictable monthly payments without a fixed redemption date.
Replacing the lifetime mortgage with a later-life mortgage
In some cases, if income supports it, you can look at remortgaging to clear the lifetime mortgage (and its terms) and restructure borrowing more conventionally. This is heavily numbers-led, especially once ERCs are included.
So, which equity release companies allow a second charge?
In most mainstream cases: none will actively “welcome” it, because they’ll usually refuse consent.
If a second charge is possible at all, it tends to be:
- exceptional,
- very case-specific, and
- dependent on the existing provider giving written consent (which is the hurdle).
That’s why the practical solution is usually “raise more with the existing provider” rather than trying to bolt a second lender on top.
What to do next
To make this answer genuinely actionable, you need three up-to-date numbers:
- a current valuation (your 2012 RICS value will be too old for any lender decision)
- the current balance + ERC on the lifetime mortgage
- the exact terms on your drawdown/further advance options
From there, a broker can compare:
- using the existing drawdown facility, versus
- a further advance, versus
- restructuring to a RIO / later-life mortgage if the aim is monthly interest payments and a different repayment profile.
You could benefit from speaking to one of our independent mortgage advisers. Please call 023 8235 2300 to speak to an adviser about this further, and feel free to read our borrowing into retirement guide.
