Second charge mortgages are now more popular than ever!

Monday, May 27th, 2019

According to recent figures released by the FLA (Finance & Leasing Association), the year-on-year comparison for second charge mortgage lending increased 31% by volume between March 2018 and March 2019, the highest growth rate for over 10 years.

Here at Caboodle Finance, we believe that there are several factors which are likely to have significantly influenced the growth of second charge mortgages (once simply known as “secured loans”) and we have highlighted the main points below.

Mortgage Customers Worry Over Brexit Uncertainty

Firstly, and possibly partly due to the uncertainty around Brexit and an increasing desire to protect against potential interest rate increases in the future, more and more mortgage customers are opting to fix their mortgage rate for longer periods.

Although this can be a good idea, it often means that a borrower is then “tied in” to that mortgage lender for a specified number of years to the extent that an early exit could result in significant financial penalties being levied. Where borrowers are already committed to such deals, those seeking to raise additional capital could arrange a separate second charge mortgage against the property rather than end the arrangement with the existing mortgage lender and pay a penalty.

More People Choosing to Improve, not Move

Secondly, more homeowners are choosing to improve their current property, rather than sell up and move out. Whether it is the potential savings regarding stamp duty, estate agents and solicitors’ costs or just that they cannot find anything to buy that excites them, reconfiguring the existing footprint of a building to maximise space can prove to be financially rewarding in terms of enhanced resale value of a property when compared to the cost of undertaking the work itself.

In short, when considering home improvements, a second charge mortgage could prove to be an excellent option when compared to either a full remortgage or perhaps a further advance from an existing mortgage provider. If you would like to know more, please call us on the number below.

Other instances where a second charge mortgage may prove preferable include those where an existing mortgage is “interest only”, where there has been some adverse credit history in the interim period, or where it simply proves to be a more cost-effective solution.

Get Advice before Choosing a Second Charge Mortgage

Clearly, the decision regarding the best and most cost-effective way to raise the capital required is not always a straightforward one, which is why employing the services of a specialist broker who can give independent professional advice on all aspects of both mortgages and second charge mortgages really could be “worth its weight in gold”!

Our experienced team here at Caboodle Finance of Sutton Coldfield, Birmingham advise our clients as to what are likely to be the most appropriate mortgage and second charge mortgage deals in all the circumstances to further ensure that any funds raised will be both cost-effective and affordable.

For more information, please call our office on 0121 308 9114 today or alternatively click HERE to contact us and one of our specialist mortgage broking experts will call you back.

We very much look forward to hearing from you.


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. For secured loans a broker fee up to 10% of the loan amount borrowed may be payable on successful completion. 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 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.

© 2020 Caboodle Financial Services Ltd