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What is A 2nd Charge Mortgage?

  • A second charge mortgage is perhaps more familiar to you as a secured loan. It’s the term now used for any loan facility protected by assigning a portion of the free equity in your property to the lender.
  • As an ‘asset backed facility’, a secured loan can offer much more flexibility than an unsecured loan. For example, larger loans (typically those over £25,000) can be repaid over a longer term (10 years or longer). This can be helpful when clients have been declined a personal loan or simply have a bespoke loan requirement and need to keep the monthly cost down.
  • Common reasons for needing a second charge mortgage include:
  • Debt consolidation – 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 existing rate of interest if you need to apply for a further advance. Taking out a second charge mortgage instead can protect your original mortgage rate.
  • Portfolio landlords may need a deposit for additional investment properties
  • Been declined for a mortgage or loan already


Client need – A married couple living in Cambridgeshire wanted to do some home improvements and needed £8,000 for this work. In addition, they wanted to reduce their credit commitments if they could – as current monthly payments were £584. A CCJ for £5,080, which was registered against them three years earlier, was still unsatisfied and also needed cleared off too.

Solution – A loan from Optimum Credit, at an annual rate of 3.75% for 2 years, which was taken out over a 20-year period 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.

Second Charge Mortgage

A second charge mortgage can only be arranged if you already own your own home and have an existing mortgage in place. (Hence why it is now called a ‘second charge’).

As an independent loan broker, the Lending Channel deal with a panel of lenders and search the market for the best deal on your behalf. A broker fee is charged for this service and is normally added to the value of the amount advanced, but you can pay any fees separately.

You will be made fully aware of any fees to be charged 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.

Summary of criteria for second charge mortgages:

  • Loan to value – maximum 100%
  • Loans from £5,000 to £2,500,000
  • Terms – from 3 to 30 years
  • Age range – from 18 to 85 (at the end of the loan)
  • Many income sources are acceptable – 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


If you have landed on this page and you are not a direct client looking for a lending solution, perhaps you are interested in introducing business to us? If so, please either call for more details or follow the Introducers Link

The Lending Channel are brokers, not a lender. We use a representative panel of lenders to source suitable lending solutions.

The Lending Channel are authorised and regulated by the Financial Conduct Authority. Firm Registration no. 626787.

Debt consolidation

A Debt Consolidation Loan can reduce your monthly credit charges significantly: it’s possible that this could fall by as much as 50% – but debt consolidation can affect your credit score, depending on the option you choose.

As an independent loan broker, we can advise on the options that apply in your personal circumstances and then assess the market to find a lender that is best for you.

It is likely that you will be charged a fee for our service, but that does depend on the type of facility you apply for and the solution we offer you. However, all enquiries are treated on a free, no obligation basis and you will be made fully aware of any fees to be charged before committing to any proposed route.

Fees can be added to the net loan facility, meaning that you would have no costs to cover immediately, if you decide to proceed. Alternatively, you can pay your fees separately.

We have a long, established history providing financial solutions to clients who may face challenging circumstances, and we offer tailored lending solutions to match your personal circumstances, so either telephone us now on 01738 583008 or complete the online enquiry  to start the ball rolling. We can help even if you have a County Court Judgement (CCJ), IVA, existing debt management plan, or adverse credit history, including default on a payment or Trust Deed.

Here are the answers to some frequently asked questions about Debt Consolidation specifically.

1. How do Debt Consolidation loans work? 
You reduce the monthly repayments considerably because you use a second charge mortgage (a form of secured loan) to consolidate your credit over a much longer 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.

2. 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. 

3. 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.

4. 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. 

5. Are you the lender? 
No, we are a national loan broker, based in Scotland but dealing with clients all over the UK. We will compare loans for you and select the product that best suits your needs and criteria.

6. Are you an independent company? 
Yes, we are a small but growing family run business.

7. 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.

8. Will I be charged a fee?
Usually you will be charged a fee, and some lenders also charge their own arrangement fees. All fees are usually added to the net loan facility and there are no upfront charges.

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


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