A second charge mortgage lets you borrow against the equity in your home without changing your existing mortgage. Homeowners often look at this option when they need to raise money but don’t want to remortgage, usually because their current rate is reasonable or because early repayment charges would be expensive.
What is a second charge mortgage?
A second charge is simply a separate secured loan that sits behind your main mortgage. Your main mortgage is the first charge: the lender with priority if the property is sold or repossessed. A second charge lender is second in line. Because they take more risk, rates can be higher and affordability checks can be stricter.
You keep your original mortgage exactly as it is and take out a separate loan with a different lender. This means you’ll have two monthly payments, potentially on different terms and interest rates.
What are second charge mortgages used for?
Second charge mortgages are usually taken out when someone needs to borrow more than a standard personal loan allows, or when a remortgage would be too costly.
Common reasons include:
- Home improvements (extensions, loft conversions, new kitchen or bathroom)
- Debt consolidation,to bring multiple repayments into one structured loan
- Large one-off costs, such as school fees or helping a family member
- Business or self-employment needs, where specialist lending criteria can help
The key point is that the loan is secured on your home — so lenders can offer higher borrowing limits and longer repayment terms than typical unsecured finance.
When does a second charge mortgage make sense?
A second charge can be a good option when remortgaging would cost more overall — for example, if:
- You’re locked into a low fixed rate you don’t want to lose
- Your existing mortgage has large early repayment charges
- Your credit score has dropped since you took out your current mortgage
- You’re self-employed and need a lender with more flexible criteria
It’s often used as a middle ground: access the money you need while keeping your main mortgage untouched.
What are the risks of a second charge mortgage?
There are important risks to weigh up:
- Your home is still at risk: missed payments can lead to repossession
- Rates are often higher than a standard mortgage
- Fees can add up, including product, valuation and legal costs
- Long terms increase the total cost of borrowing
- Debt consolidation needs care: turning unsecured debt into secured debt raises the stakes
Before deciding, compare a second charge against a remortgage and a further advance from your existing lender. A whole-of-market mortgage advisor can show which option is genuinely cheapest once fees, rates and future plans are taken into account.
Do you need help deciding if a second charge mortgage is right for you?
Our UK Property Looker mortgage advisors can compare all your options and give regulated, impartial guidance based on your home, equity and budget.