Second charge mortgages are a type of secured loan that allow homeowners to raise extra money without the need to remortgage or take out an unsecured personal loan.

What is a Second Charge Mortgage?

With a second charge mortgage your loan is secured against the value of the equity in your home much like your first mortgage. There are several reasons where a second charge mortgage might be worth considering, including: 

  • If you don’t want to extend the term on your current mortgage - or forgo the existing low rate on your current mortgage deal
  • 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 may be cheaper for you to take out a second charge mortgage rather than to remortgage.
  • If you’re struggling to get some form of unsecured borrowing - such as a personal loan, perhaps because you’re self-employed.
  • If your current lender is unwilling to provide the funds that you require – perhaps for example as your using it to invest in a business venture
  • If you need to move fast and have funds available quickly - second charge mortgages are often a speedier option than a traditional remortgage 
Question mark

Can I get a second charge mortgage?

Any homeowner with at least 15% equity in their property can apply for a second charge mortgage. Second charge lenders may offer more flexible lending criteria than a first charge mortgage, but broadly applications are assessed in the same way as a traditional mortgage; taking into consideration  the property’s value and condition as well as your income and credit rating.

Talk to the experts on larger mortgages.

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How much can I borrow?

How much you can borrow will depend on the equity in your property - the equity is the percentage of the home owned outright by you. For example, if you bought a house for £500,000 and you have £150,000 left to pay on the mortgage, then you have £350,000 equity. The equity you own in your home will increase with the property’s value.

Second charge mortgages usually let you borrow money starting at £10,000. The higher the equity in your property, the more money you are likely to be able to borrow. Although this would be subject to your income and credit rating.


Legal

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT.

John Charcol is a trading name of John Charcol Limited and its Appointed Representatives. John Charcol Limited is authorised and regulated by the Financial Conduct Authority. The Financial Services Register number is 665649. Registered in England No. 9157892. Registered office address for John Charcol Limited is 5th Floor, Cutlers Exchange, 123 Houndsditch, London, EC3A 7BU. The FCA does not regulate some investment mortgage contracts. Calls may be recorded for training and monitoring.