What is a Second Charge Mortgage?

If you’re a homeowner with equity in your property, a second charge mortgage can offer a way to borrow more without changing your existing mortgage.

Rather than replacing your current deal, it sits alongside it as a separate secured loan.

This type of borrowing is often used when remortgaging would trigger large early repayment charges, or when it makes more sense to leave your current interest rate untouched.

It’s also a route worth considering if your current lender has declined further borrowing or if you’re looking to raise funds quickly.

A second charge mortgage in Bristol is secured against your property, which means the lender will register a second charge behind your existing mortgage provider.

Both loans run side by side, each with its own terms, repayments and interest rates.

Why Some Borrowers Choose a Second Charge

There are a few reasons why this type of loan might be more suitable than other options.

For example, you might be tied into a competitive fixed rate that you don’t want to lose, or your existing mortgage might be interest-only and you prefer to keep it that way.

It’s also a route commonly taken by self-employed applicants or those with complex income structures, where traditional borrowing routes are more restrictive.

Some homeowners use second charge borrowing to raise capital for property purchases, cover tax liabilities, support a business, or pay for large personal projects.

By keeping the existing mortgage in place, it allows for greater flexibility and avoids disrupting a deal that still works for your circumstances.

How It Compares to Remortgaging or a Further Advance

If you’re thinking about borrowing more against your property, there are three main options, which are remortgaging, taking a further advance from your current lender, or applying for a second charge.

Remortgaging in Bristol means switching to a new lender, often with a higher loan amount and different terms.

While this can work for some, it may come with fees or early repayment charges that make it less appealing.

A further advance allows you to borrow more from your existing lender, but approval will depend on their current lending criteria. In some cases, further borrowing is declined, even if equity is available.

A second charge mortgage keeps your main deal in place and adds a new loan secured on your equity.

This is particularly useful when your current deal is worth keeping or when the application fits better with a different lender’s criteria.

What to Consider Before Applying

As with any mortgage product, it’s important to understand the full picture. A second charge mortgage is secured against your home, so missed repayments could put the property at risk.

There are often fees involved, including broker and lender charges. These can either be paid upfront or added to the loan, but adding them means paying interest on top, which increases the total cost.

Borrowing over a longer term may reduce monthly repayments, but it also means more interest is paid overall.

If you’re using a second charge to consolidate unsecured debts, this difference in repayment term needs careful thought.

A smaller monthly payment can help day-to-day budgeting, though stretching short-term debts over many years may not be the most cost-effective choice.

Each lender has their own approach, and the structure of the loan will depend on your needs, property value and income profile.

Exploring Secured Loan Options in Bristol

Many customers choose a second charge mortgage when they want to raise funds while keeping their main mortgage in place.

Whether it’s for renovations, personal plans or investment opportunities, the flexibility of a secured loan can make it a strong alternative.

We help customers arrange second charge mortgages in Bristol when remortgaging in Bristol or further borrowing isn’t the right fit.

Our team will take the time to understand what you need the funds for and talk you through how second charges work compared to your other options.

If you’re thinking about raising capital and you want to keep your current mortgage intact, we can look at whether a second charge mortgage makes sense for your situation.

Date Last Edited: June 25, 2025