Should second charge be your first choice?

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by CMME


Once considered as a last resort option for raising funds, Second Charge mortgages are quickly becoming part of mainstream lending, as more home owners than ever before look for an alternative to remortgaging or taking out a personal loan.

We’ve created a helpful guide outlining everything that you need to know about Second Charge Mortgages, so that you can make a well informed decision about whether it’s the best option for you.


What are Second Charge Mortgages?

Also known as second mortgages, Second Charge Mortgages use the borrower’s home as security, helping them to raise funds against their property for a wide range of purposes.  They are often used to raise additional funding when a homeowner’s existing lender will not, or cannot, release any additional funds.

From raising funds for home improvements, or for the purpose of buying a new vehicle through to paying for a wedding, home improvements, paying a tax bill or even funding cosmetic surgery, there are a huge amount of reasons why people decide to take out a Second Charge mortgages.

Allowing home owners to retain their current mortgage at a competitive interest rate, a Second Charge Mortgage is widely associated as being the best option for those that have recently become self employed, people who need to raise funds quickly, property owners with a poor credit rating, as well as those looking to raise capital against their UK property in order to purchase premises abroad.

Second Charge mortgages still need to be repaid alongside your first mortgage and if your home is repossessed, lenders will recover funds in order of their charge. Just like with any mortgage, failing to repay it could mean you’ll lose your home.


Other reasons why people choose get a Second Charge Mortgage

  • Helping with University fees
  • Helping your family with a deposit for their first home
  • Buy-to-let property purchase
  • Children’s tuition fees
  • Payment of a tax bill
  • Transfer of equity
  • Lease extension
  • Exit for an existing bridging facility


How much can you borrow?

How much you can borrow all depends on the existing equity in your home, which in simple terms is the percentage of your property that is owned outright by you.

Opting for a Second Charge Mortgage will allow you to access an approved loan secured against the equity in your property. This means you will then be able to apply for a 2nd charge, which is subject to underwriting and valuation by the lender.

In the majority of cases, homeowners that choose a Second Charge Mortgage as an alternative method of raising funds tend to borrow anything between £30,000 to £80,000, but this can increase depending on the equity you have in your property, the more equity you have the more money you are likely to be able to borrow. All cases are reviewed on a case-by-case basis.


Your home may be repossessed if you do not keep up repayments on your mortgage.

CMME is a trading name of CMME Mortgages and Protection Limited. Authorised and regulated by the Financial Conduct Authority (FCA reg. 414798). Registered in England No. 04886692. Registered Office: Albany House, 5 Omega Park, Alton, Hampshire, GU34 2QE. Please be aware that Commercial Mortgages, Overseas Mortgages and some Buy To Let Mortgages are not regulated by the Financial Conduct Authority. Calls may be recorded for training and security purposes and to improve the quality of our service.

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