Second mortgages
A second charge mortgage enables you to take out a secured loan against the equity in your existing property to release funds. If you’re a homeowner, have sufficient equity in your home and meet the lending criteria, you may qualify for a second mortgage.
What is a second charge mortgage?
Second charge mortgages (sometimes also known as second mortgages) work exactly like first mortgages, where you borrow a lump sum and repay it over time. This time, though, you borrow against the equity in your home instead of the total value of the property. The second mortgage will be in addition to your existing mortgage, meaning you’ll have two sets of repayments on the same house.
Just like with any mortgage, the second mortgage is subject to a legal charge, which means your lender can repossess the property if you don’t repay.
A second charge mortgage is different from the mortgage you need to buy a second home, which requires a mortgage designed specifically for that purpose. You can’t use a second charge mortgage to buy a property to rent out, either – you need a buy-to-let mortgage for that.
How do second charge mortgages work?
Second charge mortgages enable you to borrow additional funds secured against the equity in your property, which is the difference between its current value and the outstanding balance on your existing first mortgage. You may choose to get a second charge mortgage from your current first lender or a different one entirely.
You might want a second mortgage to:
make home improvements or build an extension
consolidate existing debts
borrow money over the long term at a competitive interest rate
access funds without paying early repayment charges
take out a new loan without affecting an existing interest-only deal
borrow money if you’ve had financial difficulties since you took out your first mortgage; this could prove to be cheaper than remortgaging
Why get a second charge mortgage?
A second charge mortgage allows you to tap into the equity you've built up in your property without having to sell or remortgage. This can be a really option if you still have a few years left on your current mortgage deal, and would face pricey early repayment charges for remortgaging. Or perhaps you're currently on a good mortgage deal, and you're concerned you wouldn't be offered a competitive interest rate if you did remortgage.
Here are some of the key points to consider when getting a second charge mortgage...
Your current mortgage stays in place under the terms you agreed to when you signed up
The amount you can borrow is based on the equity in your home (its value minus the outstanding mortgage)
It doesn’t matter how much is left on your existing mortgage when you take out a second mortgage
You should avoid second mortgages if you’re struggling with existing mortgage payments
Advantages of a second mortgage
Second mortgages have the following advantages:
They allow you to borrow against the equity in your home
The terms of your existing mortgage won’t change
You might be able to secure interest-only payments for the extra borrowing
You may be able to spread the cost of the loan over 30 years
You can borrow more without incurring early repayment charges on your existing mortgage
If your credit rating has dropped or your circumstances have changed, a second mortgage could be cheaper than remortgaging
Disadvantages of a second mortgage
There are also a number of disadvantages to second mortgages:
Interest rates are typically higher for second mortgages than on first mortgages
You need significant equity in your home
You have two repayments on one property, which can mean higher outgoings each month
If you fail to make payments you could lose your home
You need to pay back both mortgages if you move and can’t port them
Your first mortgage lender's consent may be required before a second charge mortgage can proceed
How much can I borrow with a second mortgage?
The amount you can borrow will depend on several factors including how much equity you have in your home (you'll need a valuation to show the current value of your home), plus your affordability and credit history.
Many lenders often cap the total loan-to-value for a second charge mortgage, for example up to 85%. Some lenders will also have a minimum value that you’re allowed to borrow, which could be as low as £5,000, whereas others will only consider lending higher amounts.
For example, if your home is worth £400,000 and you still owe £200,000 on your first mortgage, you'll have a 50% LTV. If your second charge mortgage lender has a maximum combined LTV of 85%, you might potentially be able to borrow up to an additional £140,000 (as you would then have £340,000 of secured debt in total).
Are interest rates higher on a second mortgage?
Yes, interest rates for second-charge mortgages are typically higher than for first mortgages or remortgages as they are riskier for the lender.
This means that remortgaging is usually more cost-effective. However, if you would face high early repayment charges to leave your current deal or you have a great deal on your existing mortgage, a second mortgage can help you borrow extra cash without losing out.
What are the alternatives to a second mortgage?
If you’re not sure whether a second mortgage is right for you, there are other options to consider. These include:
Remortgaging: This is a new mortgage that replaces your old one. You may be able to borrow more if your house has grown in value.
Personal loans: You could consider a personal loan from a bank. You can look into unsecured loans or loans secured on your home, which let you borrow a lump sum over a set term.
Credit cards: If you’re looking to make home improvements, you could consider using a 0% purchase credit card, as this will let you spread the cost over several months interest-free.
Savings: Dipping into your savings will avoid you having to pay interest on loans, credit cards or mortgages.
What’s the difference between a second charge mortgage and remortgaging?
Remortgaging is when you take out a new mortgage that replaces your existing one. This can be for the remaining debt, or you may be able to borrow more if the value of your home has increased. A second charge mortgage involves taking out an additional loan that is secured against the equity in your property - your first mortgage remains in place.
Second mortgage FAQs
What’s the difference between a second mortgage and a second-charge mortgage?
A second-charge mortgage is just another term for a second mortgage. They mean exactly the same thing, which is a second mortgage on top of the existing mortgage you have on a property you already own. With a second mortgage, you have two loans, two sets of repayments and two legal charges against the same house.
How does equity in the property affect a second-charge mortgage?
The amount you can borrow is based on how much equity you have in your home. Different lenders have different rules, but the absolute maximum you can borrow will be the amount of equity in the property.
How easy is it to get a second mortgage?
Generally speaking, second mortgage lenders tend to have more flexible lending models, which means some people might find them easier to access than a remortgage deal. However, not every lender offers them, and not all brokers deal with them. Some brokers refer clients to specialists when a second mortgage is required.
How do I calculate how much equity is in my home?
You need a formal valuation of your property when you take on a second mortgage. The equity is your home's value minus the amount owed on your existing mortgage. If you want to see how much equity you might have without paying for a valuation, you can get an estimate from an estate agent or check the sale price of other properties in your area.
What happens if I move house?
When you move house, you may be able to port one or both mortgages to the new property, which means you can take them with you when you move. If this isn’t possible, you’ll need to pay off both outstanding mortgages by taking out a new mortgage on the house you’re moving to. You may have to pay early repayment charges, though.
Can you have two mortgages at the same time?
Yes. You can have a second mortgage (or second charge mortgage), which is when you have two mortgages on one property. You may also have multiple (first) mortgages for different properties if you own more than one house.
What happens if I can't pay my second charge mortgage?
If you default on your mortgage payments, your first lender has the first charge on your home, meaning it gets priority. The second lender has a second charge. It's important to keep up with the repayments on both mortgages, or you risk your house being repossessed.
YOUR HOME/PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
The FCA does not regulate mortgages on commercial or investment buy-to-let properties.
Uswitch makes introductions to Mojo Mortgages to provide mortgage solutions. Uswitch and Mojo Mortgages are part of the same group of companies. Uswitch Limited is authorised and regulated by the Financial Conduct Authority (FCA) under firm reference number 312850. You can check this on the Financial Services Register by visiting the FCA website. Uswitch Limited is registered in England and Wales (Company No 03612689) The Cooperage, 5 Copper Row, London SE1 2LH. Mojo Mortgages is a trading style of Life's Great Limited which is registered in England and Wales (06246376). Mojo are authorised and regulated by the Financial Conduct Authority and are on the Financial Services Register (478215) Mojo’s registered office is The Cooperage, 5 Copper Row, London, SE1 2LH. To contact Mojo by phone, please call 0333 123 0012.
*Average savings are based on Mojo Mortgages residential remortgage sales data, compared to the average SVR in May 2025. Actual savings will depend on individual circumstances.