What Is a Second Charge Mortgage?

A second charge mortgage, also referred to as a “secured loan” or “second mortgage” allows a person to borrow money on a property which already has an existing mortgage on it. This existing mortgage is called a first charge. The second mortgage is separate from the first mortgage because it’s a completely different product with a new mortgage lender. The rate, period of time and overall mortgage term may be different.

You need your existing lender’s permission in order to secure a second charge on your property.

The second charge mortgage rates available to you are likely to be higher than on your first mortgage, as the second lender will be taking on more risk. For example, if you were unable to keep up your mortgage payments and your property was repossessed, the first charge lender would be paid before the second charge lender. This means that if there wasn’t enough equity in the property to pay back both lenders, the second mortgage lender could lose money.

Second Charge Not What You're Looking for?

If it's a first charge mortgage you're after, see our best buys to compare mortgage deals.


Talk to Our Experts Today

0330 433 2927

Send Us an Enquiry

Why Should You Get a Second Mortgage?

Expensive Remortgaging Rates

If you have a poor credit rating, the remortgage deals available to you could come with higher interest rates and you’d miss out on more competitive deals. Taking out a second charge can potentially be cheaper as it will allow you to keep your first rate in place and pay interest at a higher rate only on the additional borrowing. If you already have an idea of the remortgage rates available to you, try our mortgage comparison calculator to see whether remortgaging is a viable option.

Early Repayment Charge

Some mortgages have high ERCs (early repayment charges), so it could be cheaper to take out a second charge mortgage instead of remortgaging.


As a self-employed person, your first charge lender may not allow you to borrow more on a further advance. A second charge presents an opportunity for additional borrowing that can be used for things like tax bills.

Who Could Benefit from a Second Charge Mortgage?

You might find a second charge suitable if you:

  • Want to avoid remortgaging because you’re still on your introductory deal and your mortgage has ERCs (early repayment charges)
  • Have a great deal on your current mortgage that you don’t want to lose by remortgaging
  • Don’t want to extend the term of your current mortgage
  • Aren’t able to get a further advance from your existing lender
  • Have found that your credit rating has gone down since taking out your first mortgage
  • Are struggling to obtain some form of unsecured borrowing

Borrowing More for Home Improvements?

Want to borrow more on your property for a renovation or extension? Find out how much value an extension could add to your home with our house extension cost calculator.

Can You Get a Second Charge Mortgage on Your Home?

Whether you can get a second charge on your home will depend on your income, how much equity you have in your property and whether your existing lender will allow it. You may also need to discuss with your broker whether your property requires a non-standard construction mortgage.


Talk to Our Experts Today

0330 433 2927

Send Us an Enquiry

Do You Need a Mortgage Broker for a Second Charge Mortgage?

You need a mortgage broker to get a second charge on your property. This is because they're specialist mortgages that require bespoke advice and involve specialist lenders.

Using an independent mortgage broker like John Charcol gives you access to expertise and industry knowledge that you need in order to find a suitable second charge deal.

How Can John Charcol Help with Second Charge Mortgages?

We Take Care of Everything

With nearly 50 years of service, we've seen it all. We can save you money, time and make your property journey.

We're Highly Recommended

We have over 2,100 5* reviews on reviews.co.uk, so you can feel confident that your mortgage is in the right hands.

We Give Personal, Expert Advice

We work around your schedule to help you arrange a mortgage that suits your circumstances, no matter how complex.

Second Charge Mortgage Process

1. First Call

When you contact us, we’ll arrange an appointment between you and one of our advisers – this can be over the phone or face to face. Your adviser will ask you some questions and, once they have all the right information, they’ll go away and find you the best second charge option for your current and future needs. They’ll then organise a follow up appointment to tell you about their recommendation.

2. Decision in Principle

After your adviser has presented you with their recommendation and you’re happy to proceed, they’ll work on securing your DIP (Decision in Principle). Your DIP is a promise from the lender that they’ll loan you the money on the condition that the information you’ve provided is correct and subject to a valuation on the property.

3. Pre-Application and Submission

Once the lender secures your DIP, we’ll start to prepare your mortgage application. We’ll send you a pack that explains all the different documents the lender needs. You’ll be assigned a client relationship manager who’ll go through your documents and get everything ready for submission. Your adviser will then submit your full mortgage application.

4. Lender Underwriting and Valuation

The lender carries out a process called “underwriting” where they check all the information and documents you’ve provided in your application. They’ll also instruct a valuation for their purposes on the property to make sure there are no significant problems with it. Sometimes a lender will only instruct a desktop valuation for a second charge – rather than a physical valuation – as your property would have likely had a valuation and internal inspection when you took out your first mortgage.

5. Mortgage Offer

Following a successful underwriting process and valuation, the lender will accept your application and send you a mortgage offer. They’ll also send a copy to us.

6. Completion

Finally, after you’ve signed all the paperwork, your lender will arrange a date with you to drawdown the new money. This is called completion.


Talk to Our Experts Today

0330 433 2927

Send Us an Enquiry

John Charcol Expert Tip - February 2024

"Second charges serve as a beneficial choice for mortgage holders contemplating substantial home improvements. It's advisable to explore the possibility of raising a further advance with your existing lender, as this often presents a more cost-effective borrowing option. Alternatively, if you are nearing the end of a fixed rate term, remortgaging to raise funds is another avenue to consider. However, if you find yourself tied to a favourable deal with time remaining or facing a high early repayment charge, opting for a second charge might emerge as the more suitable option in such scenarios. It's essential to weigh these considerations based on your specific financial circumstances and mortgage terms."

- Mortgage Technical Manager Nick Mendes, CeMAP qualified

Alternatives to Second Mortgage

If you need access to additional funds, there are several alternatives to taking out a second mortgage on your property, such as the following.

  • Further advance - this is where you stay with your current lender but are able to release equity to raise additional funds. These are based on current market conditions and won’t affect your existing mortgage. They’re also typically cheaper than second charges
  • Remortgaging - remortgaging can allow you to release equity. You do this by borrowing more when you remortgage than the amount outstanding on your existing loan
  • Personal loan - if you don’t need a particularly large loan, for example you want to borrow less than £10,000, an unsecured personal loan may be preferable as it can give you access to funds without putting your home up as collateral
  • Homeowner loan - this is similar to a second mortgage but lenders may have different names for them
  • Credit cards or overdrafts - if you need access to a small amount of money for a short period a credit card or overdraft facility is an option
  • Borrowing from family - a loan from a relative or friend might be an option, however, it’s important to formalise the arrangement with clear terms to avoid any potential misunderstandings and ensure you can afford the repayment plan
  • Savings or investments - you can consider using any savings or investments you have rather than taking on additional debt

Second Charge FAQs

What Is a Second Charge on a Mortgage?

A second charge is a second mortgage you take out on a property that already has a mortgage on it. Second charges are a way to release equity from your property and access money without remortgaging away from your current lender.

How Long Does a Second Mortgage Take?

Getting a second mortgage typically takes 4 – 6 weeks, assuming there are no issues with your application.

Are Second Mortgage Rates More Expensive?

Second charges are usually a little more expensive than first charges because they’re a riskier form of lending for providers. If you were unable to keep up both of your mortgage payments and your property had to be repossessed, the lender of your first mortgage would come before the second lender when it came to receiving money from the sale of the property.

Is a Second Charge Mortgage the Same as a Remortgage?

A second charge mortgage is not the same as a remortgage.

A second charge mortgage is a type of secured loan that’s taken out against the available equity in your home after the money you owe on your mortgage is deducted from the value of the property. Your normal mortgage against your home is the first charge against your home, which means if you default the lender has first claim on the proceeds from selling the property. The lender of the second charge secured loan must wait for the first mortgage lender to recover any debt before their debt is covered. A second charge operates separately from the second charge; they can be on different rates, have different terms and be with different lenders.

A remortgage is where you take out a new mortgage with a new lender on your property, replacing the existing mortgage in the process. Your remortgage arrangement pays off the existing mortgage loan when it’s actioned; it’s basically a first charge replacing another first charge. You typically remortgage when you come to the end of your current mortgage deal to avoid going onto your lender’s more expensive SVR (standard variable rate). You can remortgage for the same amount you had outstanding on your existing mortgage or you can remortgage for a greater amount and release equity from the property that can be used to fund large purchases or pay for home improvements

Does a Second Mortgage Hurt Your Credit?

Getting a second mortgage on your property won’t hurt your credit score, as long as you keep up your monthly payments on both your original mortgage and your second mortgage.

Can a Mortgage Company Refuse a Second Charge?

Not all first charge mortgage lenders will permit a second charge on your property because of the additional risk they incur. If your lender does not agree for you to take a second charge out on your property, you may be able to consider an equitable charge. An equitable charge is where a lender is able to use your property as security but they don't require the first charge lender's permission. Talk to your broker to see if this is an alternative option for you.

Will Second Charge Lenders Ask Me for a Deposit?

Like with a remortgage, you don’t need a cash deposit for a second charge. The lender simply lets you release equity that you already own in your property for the loan.

What Happens if I Move House?

You’ll need to clear the second charge mortgage when you move and sell your house which means it’s important to check whether you’ll be liable for any ERCs (early repayment charges).

Home Insurance

Want to change insurance providers? We can find you buildings and contents insurance tailored to suit your needs.

Learn More


It’s especially important to take out mortgage protection when you get second charge on your property. Ask us to arrange it for you.

Learn More

Equity Release

If you’re aged 55 or over and own your property outright with no mortgage on it, you may be able to release equity and access the money you need.

Learn More


We could help you find a better deal on your utilities with our free and exclusive Concierge Service, available through our partnership with Just Move In.

Learn More

You are currently offline. Some pages or content may fail to load.