Please note: this service is not provided by The Mortgage Advice Professionals. We will introduce you to a specialist lending firm we are partnered with, who will advise you and arrange the finance. MAP will stay alongside you throughout, supporting you at every stage of the process
Borrow against your property without disturbing your current deal
A second charge mortgage — sometimes called a secured loan — sits behind your existing mortgage on the same property. You keep the first mortgage exactly as it is and take separate borrowing alongside it, secured on the equity you've built up.
That's the appeal. If your current rate is one you'd rather not give up, or leaving early would trigger a hefty early repayment charge, a second charge lets you raise money without unpicking an arrangement that's working well.
Completion is often quicker than a remortgage too. It can be secured on a main residence, a second home, or a buy-to-let.
Your existing mortgage may be the reason
A second charge can be worth considering when changing your existing mortgage would create a cost or complication you would rather avoid.
Early repayment charges
Leaving early means paying early repayment charges that wipe out any saving.
A tracker or legacy rate
You're on a tracker or legacy rate that would be difficult to match today.
Interest-only borrowing
You're on interest only, and moving to repayment would push the monthly cost up sharply.
Self-employed
Self-employed, or with income from several different sources.
Credit issues
Affected by a credit issue since the original mortgage was taken out.
Existing lender limit
Already at the limit of what your current lender will advance.
Larger borrowing
Needing more than an unsecured personal loan will stretch to.
A specific purpose
Raising money for a purpose your existing lender won't entertain.
Raising money without replacing the first mortgage
Second charge borrowing can be used for a range of purposes, depending on the circumstances and the property involved.
Home improvements
Extensions, loft conversions, kitchens and garden rooms are among the common uses, particularly where the work adds value to the property.
Debt consolidation
Consolidating debt into a single secured payment, where this is appropriate to the circumstances.
Helping a child onto the property ladder
Raising funds to help a child with their own property purchase.
Funding a deposit
Funding a deposit for another property purchase.
Covering a tax bill
Releasing funds to cover a tax bill or other significant financial requirement.
Releasing equity from a buy-to-let
Releasing equity from a buy-to-let to spend elsewhere.
Refurbishing an existing rental
Landlords often use second charge borrowing to refurbish an existing rental, either to lift the yield or to add value before a refinance.
Different properties can be considered
Second charge borrowing can be secured on a main residence, a second home, or a buy-to-let.
The borrowing comes with important considerations
A second charge can avoid disturbing your existing mortgage, but it is still secured borrowing and needs to be considered carefully.
Two mortgages
You're securing borrowing against your property, and you'll be running two mortgages at once.
Your property is security
The additional borrowing is secured against your property, so the consequences of missed payments need to be understood.
The overall cost
Consolidating unsecured debts into secured borrowing may reduce your monthly outgoings, but spreading them over a longer term could mean paying more overall.
We'll set it out plainly
We'll set out the costs, the structure of the borrowing and the implications plainly before you decide.
Keep your existing mortgage and consider the alternatives
If changing your existing mortgage doesn't make sense, a second charge may provide another route to raising funds against your property.
The right structure depends on your existing mortgage, the amount you need, the property and what you're raising the money for.
Borrowing without unpicking your existing deal
A second charge can provide an alternative to remortgaging where keeping your existing mortgage in place is important. It can be used for home improvements, other major financial requirements, and certain property investment purposes.
But it is secured borrowing, and the cost and structure need to be considered alongside the mortgage you already have.
MAP can talk through the circumstances with you and explain the options before you decide how to proceed.
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