This means you will have two mortgages secured on your home — your original (first charge) mortgage, and the new (second charge) mortgage. It can be a suitable option if you need to raise funds but your existing mortgage has high early repayment charges.
You may also want to explore a Further Advance (link). Our advisers can compare all available options before you commit.
Affordability and Repayment
Lenders will carry out similar affordability checks to those required for a standard mortgage. They will assess your income, expenditure and credit profile to ensure you can manage both mortgage payments.
Loan terms and lending criteria
The amount you can borrow will depend on your existing mortgage balance, personal income and property value. This is typically capped at a percentage of the property value minus your existing mortgage balance.
Lenders will still carry out affordability checks as with a standard first charge mortgage, however this may be an option if you have been declined for a remortgage or further advance.
As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.
Pricing and fees
Second charge mortgage rates are often higher than standard mortgage rates. Arrangement fees, valuation costs and legal fees are also payable. We will always provide a clear breakdown of the costs upfront.
As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.
