Second Charge Mortgages
Borrow against your equity without remortgaging
Content reviewed: 13 January 2026
Should I get a second charge mortgage or remortgage?
Choose a second charge mortgage if you have a low existing mortgage rate you want to keep, need to avoid early repayment charges, or have credit issues preventing remortgage. Remortgaging is better if you can access lower overall rates. Second charges are faster (2-4 weeks) but have higher interest rates (5-12%) than first mortgages.
What is a second charge mortgage?
A second charge mortgage is an additional loan secured against your property, sitting behind your main mortgage. It lets you borrow against equity without remortgaging. Useful for keeping a good existing rate or avoiding ERCs. Your Home Finance finds the best second charge options for your situation.
What is a Second Charge Mortgage?
A second charge mortgage (also called a secured loan or second mortgage) is additional borrowing secured against your property that sits "behind" your existing first mortgage. This means if your property is repossessed and sold, your first mortgage lender is paid first from the proceeds, and the second charge lender receives what's left. Because they're second in the repayment queue, second charge lenders charge higher interest rates than first mortgages (typically 5-12% vs 3-6%) to compensate for the additional risk, but rates are still much lower than unsecured personal loans or credit cards.
The key advantage is that you can borrow additional money against your home equity without disturbing your existing mortgage. This is particularly valuable if you have a low-rate mortgage that would cost thousands in early repayment charges to exit, or if your current deal is significantly better than today's market rates. Second charges complete faster than remortgages (2-4 weeks vs 8-12 weeks) with less documentation, and you can borrow from £5,000 up to £500,000 depending on available equity. Common uses include home improvements, debt consolidation, business funding, or any significant expense.
However, second charge mortgages come with important considerations. You're taking on a second monthly payment alongside your existing mortgage, increasing your total housing costs. Both debts are secured against your home—failing to maintain payments on either could result in repossession. Selling your property becomes more complex as both lenders must be repaid from the proceeds. Second charge lenders are generally more flexible on credit issues than mainstream mortgage lenders, making them accessible to borrowers with adverse credit who need secured borrowing but can't remortgage. Always compare the total cost of a second charge against remortgaging the full amount before deciding which route to take.
Second Charge Mortgages are arranged by introduction only.
Key Benefits of Second Charge Mortgages
Borrow additional funds without losing your current low mortgage rate or paying early repayment charges
Complete in 2-4 weeks compared to 8-12 weeks for full remortgage, with less documentation required
Secured against property means lower rates than personal loans or credit cards for large borrowing
Borrow £5,000-£500,000 based on available equity, with terms from 3-30 years to suit your needs
Expert Tips & Insights
A second charge mortgage (also called a secured loan or second mortgage) is a loan secured against your property that sits 'behind' your main mortgage. If you default and the property is repossessed and sold, your first mortgage lender is paid first, then the second charge lender gets what's left. Because they're second in line, second charge lenders charge higher rates than first mortgages (typically 5-12% vs 3-6%). You can borrow based on available equity—the difference between property value and first mortgage.
Second charges suit situations where remortgaging is expensive or impossible: you have an excellent existing mortgage rate you'd lose by remortgaging, you'd pay large early repayment charges on your current mortgage (£5,000-£20,000+), you need money quickly (second charges complete in 2-4 weeks), your circumstances changed and you wouldn't pass current affordability checks for full remortgage, or the new borrowing amount is relatively small (under £50,000) making remortgage fees disproportionate.
Second charge rates (5-12%) are higher than remortgage rates (3-6%) but lower than unsecured loans (8-30%). Example: borrow £30k over 15 years. Second charge at 8% = £287/month, £21,660 total interest. Remortgage of £230k at 5% vs keeping existing £200k at 3% + £30k at 8%. Calculate: would you pay more in lost low-rate interest and ERCs by remortgaging, or more in higher interest by keeping the low rate and taking a second charge? Often second charges win for smaller amounts.
Second charges are secured on your home—failure to keep up payments can result in repossession. You're paying two sets of monthly payments (first mortgage + second charge). If you default, the first mortgage lender has priority, so second charge lenders often repossess earlier if payments slip. Selling your home becomes more complex—both lenders must be paid off. Building substantial debts against your home reduces the equity cushion protecting you if property prices fall. Only borrow what you can comfortably afford.
You need sufficient equity (property value minus existing mortgage) to secure the second charge. Most lenders allow combined lending (first mortgage + second charge) up to 85-90% of property value. Example: £300k house, £200k first mortgage = £100k equity. You could borrow up to £55k-£70k on a second charge (leaving 10-15% equity buffer). Some specialist lenders go to 95% combined LTV but at very high rates (10-12%). Bad credit applicants typically face 75-85% max combined LTV.
Legally you don't need your first mortgage lender's permission to take a second charge (though your mortgage terms may require notification). However, you must inform your first lender when selling the property to ensure both loans are repaid correctly. Some first mortgage lenders have clauses allowing them to demand full repayment if you take additional secured borrowing—check your mortgage offer. Most modern mortgages don't have this restriction. Second charge lenders will conduct a property valuation independently.
Frequently Asked Questions
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Need to Borrow Against Your Equity?
Our second charge mortgage specialists will compare the costs of additional borrowing versus remortgaging to find the most cost-effective solution for your needs.