Second-charge mortgages for homeowners.
A loan secured on your home, behind your existing mortgage. It puts your home at risk, and it is often not the cheapest option. Here is the honest picture, then an introduction to Made 2 Measure Finance Limited, our FCA-authorised partner, for the advice.
What is a second-charge mortgage?
A second-charge mortgage is a loan secured against your home, which already has a mortgage on it. Your existing mortgage is the first charge; the new loan is the second charge, sitting behind it. If your home is sold, the first-charge lender is repaid first and the second-charge lender out of what is left.
It lets you borrow against your home's equity without changing your existing mortgage, which is useful when that mortgage carries a rate, or an early repayment charge, worth keeping.
This page is about second charges on your home, which is regulated lending. Hunter Grey is not authorised or regulated by the Financial Conduct Authority and does not advise on it. We give you the honest picture here and introduce you to Made 2 Measure Finance Limited (FCA No. 1044045), an Appointed Representative of Cornerstone Finance Group Ltd (FCA No. 767202), who do. Second charges on investment or commercial property held by a company are unregulated and something we arrange directly: see second charges for investors.
Second charge, remortgage or further advance?
Three ways to borrow more against your home. A second charge is often the wrong one, and you should hear that before you hear anything else.
- Remortgage. Replace your whole mortgage with a bigger one. Usually the cheapest route, unless your current rate is unusually good or there is a large early repayment charge.
- Further advance. Borrow more from your existing lender. Simple, if they will offer good terms on the extra.
- Second charge. A separate loan behind your mortgage. Right mainly when your first-charge rate is too good to lose, the early repayment charge is too big to trigger, or your circumstances have changed enough that a full remortgage is hard to get.
The honest position: for many homeowners a remortgage or a further advance is cheaper and simpler. A second charge is a specific tool for specific situations, not a default. Working out which applies to you is exactly what regulated advice is for, and it is why we introduce you to an adviser rather than putting a product in front of you.
When a second charge makes sense, and when it does not.
It can make sense when
- You are on a low fixed rate you do not want to lose
- Your mortgage carries a large early repayment charge
- Your income or credit has changed since you took the mortgage
- You need funds for a specific purpose and the numbers genuinely work
It does not when
- A remortgage or further advance would simply be cheaper
- You are consolidating unsecured debt without thinking it through
- You are being pushed toward it rather than choosing it
- You are not confident you can afford both loans
The risks. Your home is on the line.
- Your home is the security. Miss payments on the second charge and you could lose your home, even if your main mortgage is completely up to date. Your property may be repossessed if you do not keep up repayments on a loan secured against it.
- Two loans, two payments. You are servicing both. If money gets tight, that is more pressure, not less.
- Your total borrowing against your home rises, which cuts your equity and narrows your options later, including moving.
- Second-charge rates are usually higher than first-charge rates, because the lender is second in line if the property is sold. There are arrangement, valuation and legal costs on top of the rate, and an early repayment charge of its own.
- The two loans will usually end at different times. When your main mortgage comes up for renewal, the second charge is still there, and your new lender has to be willing to sit in front of it. That can narrow which lenders will take you on.
We do not quote rates on regulated products, because we do not advise on them and a rate without a suitability assessment is no use to you. Made 2 Measure will give you real figures for your situation, along with an assessment of whether the borrowing is right for you at all.
On debt consolidation.
Rolling unsecured debts, such as credit cards and personal loans, into a loan secured on your home turns debt you could not lose your home over into debt you can. That is the whole of it, and it is worth reading twice.
It may well cut your monthly payments, which is why it is sold hard. But spreading the same debt over a longer term usually means paying more in total, and the security has changed from nothing to the roof over your head.
This is precisely the kind of decision a regulated adviser is required to assess carefully, and it is one of the clearest reasons to take the advice before you act rather than after.
It is not always the wrong answer. If the alternative is missing payments, or the unsecured debt is at a rate that is genuinely punishing, consolidating can be the least bad route. But it should be a decision someone qualified has looked at with your actual numbers in front of them, not one taken because the monthly figure in an advert looked smaller.
How we help: an introduction to regulated advice.
What you are weighing up
We give you honest general information and a straight conversation about whether borrowing against your home is even the right answer.
To Made 2 Measure Finance Limited
FCA No. 1044045, an Appointed Representative of Cornerstone Finance Group Ltd (FCA No. 767202). The introduction is the whole of our part.
Under their authorisation, not ours
They compare a second charge against remortgaging and a further advance, and recommend what is genuinely best for you, including when that is none of them.
We do not advise or recommend
We do not assess suitability, quote a regulated rate, or tell you which lender to use. Those belong to the firm holding the permission.
Hunter Grey is not authorised or regulated by the Financial Conduct Authority. For regulated home lending, the advice and the recommendation are Made 2 Measure's. Nothing on this page is advice, a recommendation, or an offer of a regulated product.
If your borrowing is actually unregulated, because a company or SPV is borrowing against investment or commercial property, then it is us you need directly. Second charges for investors →
Frequently asked questions.
What is a second-charge mortgage?
A loan secured against a home that already has a mortgage, sitting behind it. It lets you borrow against your equity without changing your existing mortgage.
Second charge or remortgage, which is better?
Often a remortgage is cheaper. A second charge wins mainly when your existing mortgage has a rate or an early repayment charge worth keeping. Which suits you is what regulated advice works out.
Is a second charge on my home regulated?
Yes. A second charge on a home you live in is FCA-regulated consumer lending, which is why we introduce you to our authorised partner rather than advising ourselves. A second charge on company investment property is unregulated and is a different page.
Can I get one with bad credit?
Possibly, because the loan is secured, but rates will be higher and your home is at risk. Take regulated advice before securing borrowing against your home.
What happens if I cannot pay?
Your home is at risk. The second-charge lender can seek repossession even if your main mortgage is up to date. Do not take one without being confident you can afford both loans.
Should I consolidate my credit cards onto my home?
Think very carefully. It converts debt you could not lose your home over into debt you can, and a lower monthly payment over a longer term often costs more in total. This is a decision to take advice on, not one to take from a website.
Does Hunter Grey advise on this?
No. Hunter Grey is not FCA authorised. We introduce you to Made 2 Measure Finance Limited (FCA No. 1044045), an Appointed Representative of Cornerstone Finance Group Ltd (FCA No. 767202), for regulated advice.
Will the introduction commit me to anything?
No. Made 2 Measure may well tell you a second charge is not right for you, which is part of what regulated advice is for.
Tell us what you are trying to do.
If a second charge is the right conversation, we will introduce you to Made 2 Measure. If a remortgage would serve you better, we will say so.