2nd Charge Mortgages

Second Charge Mortgages – they may just be the solution you need!

Friday, October 25th, 2019

Despite the fact that for a number of years second charge mortgages have now been under the same regulatory framework as mortgages, many advisers still regard the use of the former as an option that they will only explore if a remortgage or further advance from the existing mortgage provider is not possible.

Consider all the options available to you.

Whilst second charge mortgages may not always be the final recommendation, by effectively treating second charge mortgages as if they were still “pre-regulation”, some brokers may fail to present what could be an important option for any client looking to raise capital.

There are many scenarios where one solution will more suitable than another, but there are several factors to be taken into consideration aside from just mathematics and number crunching. In short, it is crucial that whichever solution is ultimately recommended, it must align with the specific requirements of the customer given their individual circumstances.

It pays to use a specialist broker.

As each customer scenario will be very different, one of the ways it is possible to guarantee that the “most suitable outcome” is achieved is to use a specialist broker like Caboodle Finance who will be able to give consideration to and advise on the merits and pitfalls of both mortgages and second charge mortgages. Whilst basic online calculators are available, what they will often not be able to do is to assess all the other crucial details that can often represent the difference between a successful and an unsuccessful mortgage application.

When could a second charge mortgage be the better choice? 

In our experience, the most frequent areas for which a second charge mortgage could be recommended as a means of capital raising, rather than a remortgage are:

• Where the main mortgage is on an interest-only mortgage and the client does not wish to convert it to a capital repayment mortgage via a full remortgage

• Where the main mortgage is on a fixed rate and there are significant early repayment penalties if the mortgage was moved away from the existing lender via a remortgage

• In circumstances where the client has collected some adverse credit since taking out the original mortgage, which could significantly increase the rate on the total borrowing if a remortgage was arranged

• Where the main purpose is for debt consolidation, which many mainstream mortgage lenders will not allow and others that do can often restrict what they will offer

In all the above scenarios and subject to various checks regarding credit history and affordability, any existing mortgage can remain in place and a separate second charge mortgage will be added to it.

Our team here at Caboodle Finance of Sutton Coldfield, Birmingham always do their utmost to ensure that clients get access to the very best mortgages and second charge mortgages that match their individual circumstances. With that in mind, please call us today on 0121 308 9114 or just click HERE to contact us by email and one of our mortgage broking experts will help guide you through every aspect of your proposal.

We 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.

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