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Second-charge mortgage
When and how to take out a second-charge mortgage
If you’re a homeowner, you may be able to borrow more money via a second mortgage. This is also known as a second-charge mortgage.
Scour the market and compare second-charge mortgages
Your mortgage is likely to be your biggest financial commitment, so shopping around for the best deal is vital. We can help by comparing thousands of products from a wide variety of lenders, covering the whole of the market. This way, you can be confident you’re getting the right deal.
What is a second-charge mortgage?
A second-charge mortgage is a secured loan that uses the capital (or equity) in your home as collateral. In other words, it’s based on the difference between the value of the property and the amount you owe on your first mortgage.
A second-charge mortgage is completely separate to your original mortgage. It can also be a good way to access extra funds without remortgaging, especially if you’ll face penalties to switch away from your current mortgage. Taking out a second-charge mortgage allows you to use your home to borrow more money, which could be used – for example – to cover the cost of home improvements or renovations. However, it will mean you have two mortgages to pay off on the property.
If you become unable to pay either your first or your second mortgage, your home could be repossessed as a result. So, it’s always wise to consider whether taking out a second-charge mortgage is the right option for your needs or not.
Why might I consider a second-charge mortgage?
You might benefit from taking out a second mortgage if:
You’ll face big early repayment charges (ERCs) or penalties for switching away from your current mortgage deal
You're on a particularly good deal already, and remortgaging would mean paying a new higher interest rate across the whole borrowing amount
Can I get a second-charge mortgage?
Only homeowners can take out second-charge mortgages, but you don’t have to live in the property to apply. A second-charge mortgage can also be taken out on second homes and buy-to-let flats and houses. Either way, you’ll need some capital built up in the property to qualify.
You can work out how much capital you have by deducting the amount you owe on your first mortgage from the value of your home. For example, if your home is worth £300,000 and your existing mortgage is for £100,000, your capital is £200,000.
To take out a second-charge mortgage, you’ll also need to get permission from your existing mortgage lender. This way, you’ll be able to prove to the second-charge mortgage lender that you can afford the repayments on both loans. What’s more, your second-charge mortgage provider is likely to want to look at different documents and factors, including credit score, current outgoings, outstanding debts, and employment status.
How much does it cost to take out a second-charge mortgage?
Second-charge mortgage interest rates are generally higher. So, you’ll probably have to pay more interest on your second mortgage than on your first.
The interest rates on second mortgages are usually higher because the first-charge lender is paid before the second-charge lender if your home is repossessed. This means that the second-mortgage lender could lose out if the proceeds of the sale fail to clear both loans.
However, second-mortgage rates may still be lower than on other forms of unsecured credit, such as a personal loan.
What are the benefits of taking out a second-charge mortgage?
Second-charge mortgages come with an array of positives. Here are some of their most prominent pros:
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You can keep your existing mortgage deal. This could be particularly valuable if either interest rates have gone up or your credit rating has gone down
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You don’t have to pay early repayment charges or penalties to remortgage now
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You don’t have to extend the term of your current mortgage deal
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Secured loans tend to be easier to access than unsecured personal loans, particularly if you’re self-employed
What are the drawbacks of taking out a second-charge mortgage?
As with everything, however, second-charge mortgages have their own set of cons too. Here are some you may want to consider:
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You could lose your home if you fall behind on the repayments. This would make a second-charge mortgage a bad idea if you’re struggling financially
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You’ll have to pay off both mortgages in full if you move house, which could leave you with very little deposit
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You’ll generally pay a higher interest rate than on your first mortgage, which is why many people choose to remortgage instead
How can I take out a second-charge mortgage?
There are a number of UK banks and building societies that offer second-charge mortgages. To qualify, you’ll have to demonstrate how much equity (or capital) you have in your property. You’ll also need to prove that you can afford to meet the repayments on both mortgages.
Your existing mortgage lender must also approve any application for a second-charge mortgage on your house or flat.
If you’re thinking of taking out a second-charge mortgage, you can talk to an advisor at our partner Fluent. They can help you understand if a second-charge mortgage is right for you. What’s more, they’ll help you find the right deal for you, whether it’s for a second-charge mortgage or a remortgage.
You can give their friendly staff a call on 0800 009 3342.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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Just tell us a bit about yourself, your financial situation, and your plans. We’ll help you scour the market in search of the mortgage deal that is right for your pockets and requirements. Then, feel free to use our mortgage calculators to find out how much each deal would cost you overall.
How much can I borrow with a second-charge mortgage?
The amount you can borrow on a second mortgage will depend on your income, as well as the amount of equity (or capital) you have in your property. If, for example, you have a high income and capital of £100,000, a second mortgage lender might agree to let you borrow the full £100,000. However, some will cap the maximum amount at 75% or 80% of the equity available.
The minimum amount you can borrow is usually £1,000.
What are the alternatives to a second-charge mortgage?
The main alternatives to taking out a second mortgage on your home or property are:
Remortgaging for a larger amount
Dipping into your savings
Applying for a personal loan
How long does a second-charge mortgage take?
Taking out a second-charge mortgage on your house or flat is usually a lot quicker than securing a first mortgage. In fact, some lenders even claim they can clear your funds in a matter of days. In most cases, you should have the money within three to four weeks.
When comparing second-charge mortgage deals, remember to always look at the total cost, including any fees. You should also check for early repayment charges.
Can I get a mortgage on a second property?
You can get a second-charge mortgage to pay for another property if you can prove you can afford the repayments. If you want to keep the property for personal use, you’ll need a second home mortgage. Instead, if you plan to rent it out, you’ll need a buy-to-let mortgage.
With a second-home mortgage, you’ll have to show that your household income is high enough to afford the repayments on both it and your original mortgage. With a buy-to-let mortgage, you’ll usually have to show that the rent will be 25% or 30% higher than the mortgage repayments.
Can I take out a second-charge mortgage to fund my business?
It depends entirely on the lender. Some mortgage providers are willing to lend you funds as long as you have a solid, realistic business plan in place. Others, however, do not offer this option.
It is worth remembering that second-charge mortgage lenders prefer to give out additional borrowing to people who are looking to carry out renovations. This is because home improvements are likely to increase the value of your property, meaning the lender is less likely to lose out if they have to seize your house.
Do I need to inform my current lender if I take out a second-charge mortgage?
Not necessarily. In fact, the second-mortgage charge is unlikely to jeopardise or affect your existing lender.
Bear in mind, though, that if you’re unable to meet your repayments, they will have the first charge on your property. This means that, if they need to repossess your house and then sell it, they’ll get first dibs on the proceeds.
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Reviewed on 22 Dec 2025