2nd Charge Mortgages

signing a mortgage agreement

2nd charge mortgages can be a beneficial option for many homeowners who may be struggling with debt, mortgage repayments or high tax bills. 2nd charge mortgages can also be used for additional property investments or for making major home improvements. 

However, as attractive as they may sound, 2nd charge mortgages should never be taken lightly. It's important to carefully consider all your options before applying for a 2nd charge mortgage

Fortunately, The Lending Channel is here to help. We can guide you you through the full process of applying for a 2nd charge mortgage and give you expert advice on whether a 2nd charge mortgage is right for you. 

Call our Perth office directly on 01738 583008 to find out more about 2nd charge mortgages, or read through the helpful information laid out below. 

What is a 2nd charge mortgage?

A 2nd charge mortgage, which is also known as a secured loan, is essentially an extra, or second loan, on top of a current mortgage loan. 

The term is used for any loan facility protected by assigning a portion of the free equity in your property to the lender.

As implied by the name, this means you’ll have two mortgages on your home simultaneously. This means you are not changing your mortgage loan type, you are simply paying two loans back at once, which can be helpful in some situations but also damaging if you cannot afford the two mortgage repayments over an extended time period.

Why take out a 2nd charge loan?

Common reasons for seeking a 2nd loan include:

  • Consolidating debt: as a credit repair exercise post a decree or default or as part of a debt management plan to reduce monthly credit commitments, which can be by up to 50%.
  • Capital spending: financing a car or boat, home improvements, or the holiday of a lifetime.
  • Tax bill: bringing an end to HMRC pressure.
  • Protect a low mortgage rate: your current mortgage lender might want to increase your current interest rate if you need to apply for a further advance. Taking out a 2nd charge mortgage instead can protect your original mortgage rate.
  • Additional investment property: portfolio landlords may require a deposit for additional investment properties.
  • Financial history: you have been declined for a mortgage or loan already.

It’s absolutely crucial that you understand the terms associated with your 2nd charge mortgage. There are severe consequences if you cannot afford the costs involved. That’s why it’s vital to first discuss your circumstances with an experienced broker, like our specialist team here at The Lending Channel.

For an initial consultation and to find out how we can source you the best deals available, please get in touch.

2nd charge loan for home improvement


Client need

A married couple living in Cambridgeshire wanted to make some home improvements and needed £8,000 for this work. They also wanted to reduce their credit commitments if possible, as current monthly payments were £584. A County Court judgment (CCJ) for £5,080, which was registered against them three years earlier, was still unsatisfactory and needed to be cleared.


At an annual rate of 3.75% for two years, a loan from Optimum Credit was taken out over 20 years with monthly payments of £456. This reduced their monthly commitments by £128. The clients also received the £8,000 needed for the home improvements and managed to clear the CCJ.

Can I get a 2nd mortgage?

As the loan is secured against the equity in your home, a 2nd charge loan can only be arranged if you already own your own home and have an existing mortgage in place, hence the name of a ‘second charge’.

Your eligibility is dependent on a range of factors, and the requirements will vary from lender to lender. Generally speaking, 2nd charge mortgages are seen as more risky investments by lenders. Therefore, you should be prepared for a more rigorous application process and stricter terms.

In our efforts to offer a simple and straightforward service, we ensure that you are made fully aware of any fees at the outset, and all enquiries are treated on a no-obligation basis. All loan fees are usually added to the net loan facility leaving you with no upfront charges to pay.

What is the Criteria For a 2nd Charge Mortgage

The main criteria to be accepted for a 2nd charge mortgage are:

  • Loan to value (maximum of 100%)
  • Loans from £5,000 to £2,500,000
  • Terms range from 3 to 30 years
  • The age range is from 18 to 85 (at the end of the loan)
  • Many income sources are acceptable, including DWP, second jobs, maintenance, pension income
  • CCJs, defaults, mortgage arrears and low credit scores are acceptable on many plans
  • Interest-only repayment options are available with some lenders
  • Buy to let or investment properties can be used as security
  • 3rd charges can be sourced


Second charge mortgage broker

We help you find the best mortgage deals

A Debt Consolidation Loan can reduce your monthly credit charges significantly, with a possible fall of as much as 50%. However, debt consolidation can affect your credit rating, depending on the option you choose, so it's crucial you seek expert advice beforehand.

We have a long, established history of providing financial solutions to clients who may face challenging circumstances, including Commercial Mortgages , Short-Term Finance Options and Specialised Buy-To-Let Mortgages . We can help even if you have a CCJ, Individual Voluntary Arrangements (IVA), existing debt management plan or adverse credit history, including default on a payment or Trust Deed.

If you have any questions, get in touch, we’d be happy to discuss everything with you. Call us now on 01738 583008 or complete the online enquiry to get the ball rolling.

If you have any questions, get in touch, we’d be happy to discuss everything with you. Call us now on 01738 583008 or complete the online enquiry to get the ball rolling. 


If you are not a direct client looking for a lending solution, perhaps you are interested in introducing business to us? If you'd like to introduce us to a client, please call for more details or follow the Introducers Link

The Lending Channel are brokers, not charge lenders. We use a representative panel of lenders to source suitable lending solutions and are fully authorised and regulated by the Financial Conduct Authority. Firm Registration no. 626787.

Debt consolidation

Debt Consolidation FAQs

How do Debt Consolidation loans work? 

You reduce the monthly repayments considerably because you use a second mortgage (a form of a secured loan) to consolidate your credit over a much more extended period than is possible with an unsecured loan. This also allows you to borrow a much higher amount than is typical with an unsecured loan.

What is the maximum loan I could get? 

Up to £2.5m on standard plans. Our loans are all subject to status, affordability and having sufficient equity in your property.

Will I still qualify if I don’t have a mortgage?

No. Unfortunately, our secured loans are all second charge mortgages, which require a first mortgage charge to be in place.

Can I get a loan if I have a poor credit rating and have been turned down elsewhere? 

Yes, quite possibly, but this will ultimately be determined by how much equity you have in your property.

Are you the lender? 

No, we are a national loan broker based in Scotland who help clients all over the UK. We will compare loans for you and select the product that best suits your needs and criteria.

Are you an independent company? 

Yes, we are a small but growing family run business.

How long will my loan take to process? 

Typically, it will take anywhere between two and four weeks, provided the initial paperwork is returned quickly.

Will I be charged a fee?

Usually, you will be charged a fee, and some lenders also set their own arrangement fees. All fees are typically added to the net loan facility, and there are no upfront charges.

We are a credit broker, not a lender and are paid a commission by our lenders, full details of this along with our fees will be detailed in the Terms of Business we issue to you.

The Lending Channel ltd is a member of the National Association of Commercial Finance Brokers (NACFB).

2/1 King James VI Business Centre, Friarton Road, Perth, PH2 8DY
Tel: 01738 583008 | Fax: 01738 500402

The Lending Channel ltd are authorised and regulated by the Financial Conduct Authority.
FCA number 626787
Company number SC334818
Data Protection Act: Z2030159


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