| Typical loan size | Around £10,000 to £1m+ |
|---|---|
| Typical maximum combined LTV | Often up to 75–85%, sometimes higher |
| Typical term | Around 3 to 30 years |
| Common uses | Home improvements, debt consolidation, deposits, business |
| Your existing mortgage | Stays in place; lender usually notified |
| Regulation | FCA-regulated on your home since 2016 |
Who is this for?
- Homeowners on a low fixed rate who do not want to remortgage
- Borrowers facing large early repayment charges
- People whose current lender will not lend more
- Homeowners funding improvements or a family member's deposit
- Self-employed borrowers or those with adverse credit, in some cases
How does a second charge mortgage work?
A second lender takes a legal charge on your home, ranking behind your main mortgage. You make separate monthly payments to each lender. If the home is sold or repossessed, the first mortgage is repaid first, then the second charge.
Lenders assess your income, credit history and the combined loan-to-value of both mortgages. A valuation is usually needed. The second charge lender will normally notify your existing lender, and some first lenders require consent.
Second charge mortgages can be on fixed or variable rates, and terms can be set to match your plans. Some borrowers align the term with their main mortgage; others choose a shorter term to clear the debt sooner, with higher monthly payments.
When is a second charge better than remortgaging?
A second charge may make sense if remortgaging would mean leaving a cheap rate or paying a large early repayment charge. It can also help if your main lender will not lend more, or your circumstances have changed.
Second charge rates are often higher than first mortgage rates. We compare the total cost against a remortgage or a further advance from your current lender. We will only recommend a second charge where it is likely to be the most suitable option.
A second charge can also help if you need funds quickly, or if your main lender's criteria have changed since you took your mortgage. For larger sums, the combined cost over the full term is what matters most.
Can I use a second charge to consolidate debt?
Yes, debt consolidation is a common use. It can replace several payments with one and may lower monthly outgoings. However, spreading short-term debts over a longer term can cost more overall. The debts also become secured on your home.
If you are struggling with repayments, free debt advice is available from MoneyHelper and debt charities. If you have past credit problems, see our adverse credit page.
Before consolidating, list each debt with its rate, remaining term and any early settlement charges. Some debts, such as interest-free credit cards, may be cheaper to keep. We will look at the total amount repayable, not just the monthly saving.
What alternatives should I consider?
A second charge is one of several ways to raise money from your home. A further advance from your current lender keeps everything with one lender and may be cheaper, if available. A full remortgage can make sense when your current deal is ending.
For smaller amounts, an unsecured personal loan may cost less in fees and does not put your home at risk, though rates can be higher. For short-term needs, such as buying before selling, a bridging loan may suit. We compare these routes side by side, showing the monthly cost and the total amount repayable, before recommending one.
What are the risks of a secured loan?
- Your home may be repossessed if you do not keep up repayments on either mortgage
- Rates and fees may be higher than on a first mortgage
- Variable rates can rise during the term
- Early repayment charges may apply
- Selling or remortgaging later means repaying or dealing with both charges
Think carefully before securing other debts against your home.
How does OMB help with second charge lending?
Second charge mortgages are regulated in the same way as first mortgages, so you receive full advice. We compare second charge lenders alongside remortgage and further advance options. We then show the monthly cost and total amount repayable for each. For investment property or business purposes, unregulated bridging or business finance may be more suitable.
How we arrange it
- Free 15-minute call about what you need to borrow
- Comparison with remortgage and further advance options
- Second charge lender recommendation
- Valuation, underwriting and legal checks
- Funds released; both mortgages run side by side
Example cases
Illustrative examples based on the type of case we arrange. Not specific clients; every case is different.
£100,000 second charge in Ealing to fund an extension without an ERC
£75,000 second charge in Sheffield to fund a sole trader's van fleet
£45,000 second charge in Cardiff to consolidate car and card debts
From the blogSecond charge or remortgage? How to choose when you need to raise money
Read the articleFrequently asked questions
What is the difference between a second charge mortgage and a secured loan?
They are the same thing. "Secured loan" and "homeowner loan" are common names for a second charge mortgage. The loan is secured on your home behind your main mortgage. It is regulated by the FCA when secured on a home you live in.
Do I need my mortgage lender's permission for a second charge?
The second charge lender will usually notify your first lender, and some mortgage terms require consent. In most cases, consent is a formality. If your first lender objects, your options may be limited. We check this as part of the process.
How much can I borrow with a second charge mortgage?
It depends on your equity, income and credit history. Many lenders lend up to a combined loan-to-value of around 75–85% across both mortgages, sometimes more. Loan sizes range from a few thousand pounds to over £1 million for strong cases.
Are second charge rates higher than remortgage rates?
Often, yes, because the lender ranks behind your first mortgage. However, a second charge can still be cheaper overall than remortgaging if you would lose a low fixed rate or pay a large early repayment charge. We compare the total cost of each route.
Can I get a second charge mortgage with bad credit?
Some second charge lenders consider applicants with past credit problems, often at higher rates. They look at the severity and age of issues and how you have managed your mortgage. Your home is at risk if you cannot keep up repayments, so affordability matters.
What can I use a second charge mortgage for?
Common uses include home improvements, consolidating debts, raising a deposit for another property, paying a tax bill or funding a family gift. Lenders will ask the purpose and may limit certain uses. Business purposes may fall under different rules. We will ask about your plans in detail.
Can I repay a second charge mortgage early?
Usually, yes. Some products have early repayment charges during an initial period, while others have none. If you sell or remortgage, both charges must normally be repaid or the second lender must agree to stay in place. Check the terms before you sign.
How long does a second charge mortgage take?
It is often quicker than a full remortgage because your first mortgage stays the same. Timescales depend on the valuation, underwriting and legal checks. Having proof of income and ID ready helps. We keep you updated throughout. Legal work is usually simpler than a full remortgage.
Important: A second charge mortgage is secured against your home. Think carefully before securing other debts against your home; your home may be repossessed if you do not keep up repayments.