Second Charges

If you have equity available within your home and you need to borrow some money and a re-mortgage is not the right option for you then a second charge might be worth considering. A second charge is a secured loan against your property and can be used to raise funds for a project.

A second charge or second mortgage is defined simply as another mortgage secured by equity in your own house. This is an alternative to remortgaging your property and can come with some risks as well as advantages so we recommend getting in touch and talking this through with our team of experts here at Key Mortgages.

Is a second mortgage cheaper than remortgaging?

Remortgaging will often involve having to pay an early repayment charge which is usually expensive. Taking out a second mortgage means you can avoid this while being able to pay off your first mortgage.

When shouldn’t I consider a second mortgage?

If you are in the process of moving homes, both mortgages must be cleared. Other savings will be important here so you are left with enough to cover the deposit on your next home.

It is crucial that you are able to afford your current mortgage before considering any large financial commitments like a second mortgage/ secured loan. Your home could be at risk if you are unable to make payments.

What rates should I expect with a second mortgage?

By taking out a loan with your existing mortgage provider there is opportunity to ask for a loyalty bonus rate or other preferential benefits. If this is not possible, take note of their rates as they may be cheaper than getting a second charge mortgage altogether.

Calculate possible increases in interest rate on your first mortgage against a second charge mortgage to determine if it is the right choice for you.

Questions & Answers

Why should I get a second mortgage?

In some cases, a second mortgage can save you money if remortgaging isn’t an option. If your mortgage is coming to an end you, can avoid having to pay high early repayment charges by taking out a second mortgage.

What are the alternative to a second mortgage?

A personal loan could be an option for you if you only plan to borrow a small amount of money.

Can I get a second mortgage if I move house?

Typically you will need a bigger deposit when buying another property and your mortgage provider will see this is a second home, therefore a second mortgage.

Second Charge Mortgages are referred to a third party. Neither Key Mortgages nor PRIMIS are responsible for the service received.