Demand for second charge mortgages increases following a surge in longer fixed rate mortgages

Monday, March 28th, 2022

The demand for second charge mortgages has grown in recent months. As more homeowners take longer term fixed rates on their main mortgage, there has been a notable increase in enquiries for additional borrowing.

The Downside of Long-term Fixed Rate Deals

In the last few years, more homeowners who were buying or remortgaging a property have taken advantage of what were historically low interest rates locking them in for a period, usually 5 years.

Although this has meant many homeowners have secured these low rates for an extended period (compared to the previous trend where 2-year fixed rates were flavour of the month), this has in many cases resulted in there being fewer opportunities to reconfigure a mortgage without potentially incurring an early repayment charge.

The Second Charge Mortgage Solution

Consequently, many homeowners who are looking to raise additional capital have considered using a second charge mortgage alongside the further advance and unsecured loan options, to avoid any potentially significant early repayment charges which may result from repaying an existing mortgage within the original lender’s fixed rate period.

Do Not Move, Improve…

There are many scenarios that would lead to a homeowner looking to raise additional capital, but historically, one of the most popular ones is for home improvements.

During the coronavirus pandemic, many people realised that they wanted or needed extra living space and have subsequently embarked upon a journey to improve or extend their existing property rather than try to find a new one. This has resulted in many homeowners seeking advice from a mortgage broker to establish the best and most cost-effective way of raising the funds they need.

Remortgage or Second Charge, What’s Right for You?

Many factors will be taken into consideration when deciding and recommending the best course of action and an experienced mortgage broker will analyse the customers’ individual needs and circumstances and then recommend the most appropriate solution from all the available options.

Choosing the wrong option could cost a homeowner many thousands which is why many decide to get professional help from a mortgage adviser who can help guide them through the process. With that in mind, please check out our testimonials by clicking the link  HERE

Then, if you would like to know more about how the professional advisers here at Caboodle Finance of Sutton Coldfield, Birmingham could help, call them today on 0121 308 9114, or alternatively complete our online enquiry form and one of our experts will be in touch.
We very much look forward to helping you.

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Your initial consultation is free and you are under no obligation to proceed with a mortgage we recommend. There will be a fee for mortgage advice. The exact fee will depend on your circumstances and may be reduced depending on the loan amount and any commission we receive from the lender. It is estimated that the fee will be £595, but it may range from £495 to 1% of the amount you borrow. The fee is only payable on completion and can normally be added to the mortgage. This will be discussed and agreed with you before you make an application. Please ask for a personalised illustration.

Secured loan rates from 3.95% APRC, although we have plans available up to 29.9% APRC which allow us to assist customers with the most severe credit problems. The overall cost for comparison is 7.65% APRC. There will be a fee for secured loan advice and the exact fee will depend on your circumstances. The fee is only payable on completion and can normally be added to the loan. A lender fee may also apply. The actual APRC available will depend on your circumstances. All loans are subject to status. Please ask for a personalised illustration.

The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK.

Caboodle Financial Services Ltd, registered in England and Wales at Mere Green House, 46-48 Mere Green Road, Sutton Coldfield, West Midlands B75 5BT (number 08044670).
Caboodle Financial Services Ltd is an appointed representative of PRIMIS Mortgage Network (PRIMIS), a trading name of Advance Mortgage Funding Ltd which is authorised and regulated by the Financial Conduct Authority. PRIMIS is only responsible for the service and quality of advice provided to you in relation to mortgages, protection insurance and general insurance products. Any other product or service offered by Caboodle Financial Services Ltd may not be the responsibility of PRIMIS and may also not be subject to regulation by the Financial Conduct Authority. The Financial Conduct Authority does not regulate some forms of Buy to Let.

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