Second charge mortgages
A second charge mortgage can help you borrow additional money if you already have a mortgage.
Why choose a second charge mortgage?
A second charge mortgage, also known as a secured loan or a homeowner loan, lets you borrow against the equity in your home without changing your existing mortgage. It can be a flexible way to access funds when you need them.
People use second charge mortgages for a range of reasons, including:
- Home improvements and renovations
- Consolidating debts into one monthly repayment
- School fees
- Major life events, such as weddings
- Unexpected expenses or larger one-off costs
Depending on your circumstances, a second charge mortgage could be quicker and more suitable than remortgaging.
It’s important to remember your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
Discussing your needs with an independent adviser can help you find the best option for your financial situation.
Can I get a second charge mortgage?
To get a second charge mortgage, you need to:
- Be a homeowner
- Be aged 21 or over
- Prove you can afford the repayments on your existing mortgage and the new second charge mortgage
- Meet the lender's credit and affordability criteria
Eligibility will depend on your individual circumstances and is subject to underwriting.
Benefits of a second charge mortgage
- You keep your existing mortgage deal – including your current lender, interest rate and terms
- Could be better value than remortgaging – particularly if changing your mortgage would mean paying early repayment charges or giving up a competitive rate
- Can be arranged quickly – in many cases, a decision can be made in as little as 4 days
- The interest rate may be lower than other forms of borrowing – such as credit cards or unsecured loans, depending on your circumstances
- Longer repayment terms may be available – which can make borrowing larger amounts more affordable than some personal loans, while also allowing you to borrow more than many unsecured lenders can offer
Using a second charge mortgage for debt consolidation
It can be a good way for homeowners to simplify existing debts. Here’s why…
- One monthly payment instead of managing multiple credit commitments
- Potentially lower monthly outgoings by spreading repayments over a longer term
- Lower interest rate than some unsecured borrowing, depending on your circumstances
- Improved cash flow by reducing monthly debt repayments
- Consolidate larger balances that may not be suitable for an unsecured personal loan
But think carefully before securing other debts against your home. Remember, your home may be repossessed if you do not keep up repayments. And if you consolidate existing borrowing and extend the term, you may end up paying more in total.
Selina Finance
Want to explore whether a second charge mortgage is right for you? The team at our partners, Selina Finance, can help.
Selina offers a range of flexible borrowing options, including traditional homeowner loans and Home Equity Lines of Credit (HELOCs). Whatever the reason you’re looking to borrow, their team can help you understand what’s possible.
Checking your eligibility takes just a few minutes, with no impact on your credit score.
- Borrow from £5,000 to £500,000
- Flexible repayment terms from 5 to 30 years
- Choose between a fixed lump-sum Homeowner Loan or a flexible HELOC
- Only pay interest on the funds you use with a HELOC
- Get a personalised quote with no impact on your credit score
Mortgages taken out with Selina Finance will be legally owned and managed by Selina Finance, and Vanquis Bank may hold the beneficial interest in some of those mortgages.
Selina Finance Limited is a company registered in England and Wales (11497606).
Selina Finance Limited is authorised and regulated by the Financial Conduct Authority (FRN 820183). Our registered address is HYLO 103-105 Bunhill Row, London EC1Y 8LZ