A second charge mortgage is a mortgage that is secured against a property which already has a primary mortgage. This second mortgage is entirely separate from your original mortgage and is a separate product from a new lender.
What Do I Need to Know Before I Apply?
Before you apply, you need your existing lender’s permission in order to secure a second charge mortgage on your property.
It is often the case that second charge mortgage rates will be higher than the rate for your first mortgage, as second charge lenders are taking on more risk. For example, if were you unable to keep up your mortgage payments and your property was repossessed, the first charge lender would be paid before the second charge lender.
Who is a Second Charge Mortgage Suitable For?
A second charge mortgage might be for you if:
- Your credit rating has decreased since taking out your first mortgage
- You’re struggling to get some form of unsecured borrowing – such as a personal loan
- You have a deal on your current mortgage that you don’t want to lose by remortgaging
- You want to avoid remortgaging because you’re still on your introductory deal, or your mortgage has early repayment charges
- You don’t want to extend the term of your current mortgage
- You aren’t able to get a further advance from your existing lender
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Your home may be repossessed if you don't keep up repayments on your mortgage.