Secured Loans (second mortgages)

A secured loan (second mortgage) is a type of loan that is secured against your property, similar to your main mortgage, but secondary to it — hence the name “second charge mortgage.”

A second mortgage allows you to borrow money against the equity in your home, without replacing your existing mortgage.

• It’s also called a second charge mortgage.
• Your main mortgage is the first charge, and this new loan becomes the second charge.
• If you default, your main lender gets paid first if your home is repossessed and sold.

How It Works

Let’s say for example:

• Your home is worth £300,000
• You owe £200,000 on your first mortgage
• You have £100,000 in equity

You might be able to borrow a portion of that £100,000 equity as a second charge mortgage — for example, £25,000 or £50,000, depending on the lender and your affordability.

Why Choose a Second Mortgage Instead of Remortgaging?

You might consider a second mortgage if:

• You have a good mortgage deal you don’t want to lose with your current lender (e.g. fixed low rate)
• Your credit score has worsened, and remortgaging would be expensive
• Your existing lender won’t allow you to borrow more
• You have early repayment charges on your current mortgage that you want to avoid paying

Are Second Charge Mortgage Rates Usually Higher?

Generally, yes. Secured loan (second charge mortgage) interest rates are usually higher than those on first charge (main) mortgages. There are several reasons for this.

• There is a higher risk for the second charge lender as that mortgage ‘sits behind’ your main mortgage. This means that if the property was ever repossessed, the first mortgage lender will be paid out first and this means that there is more risk involved for the second lender.
• Historically secured loan lenders are more generous with affordability and can also be more flexible with people who may have credit issues and this will mean that the interest rate could be higher than that of a first charge mortgage

What could I use a secured loan for?

You can use a secured loan (second charge mortgage) for a wide range of purposes — as long as the lender agrees and it passes affordability and legal checks.

Since the loan is secured against your home, lenders tend to allow it for larger, longer-term expenses, especially when unsecured credit (like personal loans or credit cards) wouldn’t cover the cost or would be too expensive.

• Home Improvements - One of the most popular uses — e.g., extensions, loft conversions, new kitchen/bathroom. Improves your living space and can increase your property value.
• Debt Consolidation - Use the loan to pay off multiple unsecured debts (credit cards, personal loans) and combine them into one monthly payment, ideally at a lower interest rate.
• Life Events - Weddings, big anniversaries, or helping children with house deposits or other major milestones.
• Car/Vehicle Purchase - Useful if you want to buy a vehicle outright but don’t want a high-interest car finance deal.
• Education Costs - Paying university tuition, private school fees, or vocational training.

Let us help you

Our brokers have access to a variety of secured loan lenders and have the expertise to guide you through the application process, giving you the best chance to succeed in obtaining the right secured loan deal for you.