Second charge mortgages
Additional financing secured against your
existing home
Second charge mortgages
Second charge mortgages are separate loans secured against the same property as your main
mortgage. They do not replace your first mortgage but exist alongside it. In case of default, the
first lender has priority in repayment, so the second lender takes on more risk, often resulting in
higher interest rates for the second loan.
Why use a second charge mortgage?
- Home improvements: financing repairs or renovations.
- Debt consolidation: combining multiple debts into one with a lower interest rate.
- Education: paying for tuition or other educational expenses.
- Investments: funding a business or purchasing additional property.
- Other large expenses: such as buying a car or funding a wedding.
Benefits
- Keeps your original mortgage terms intact: no need to change your existing mortgage or pay early repayment penalties.
- Access to larger sums: you can borrow more than what’s usually available through unsecured loans.
- Flexible use of funds: no restrictions on how you use the money.
Risks
- Risk of losing your property: if you can’t keep up with repayments, your home could be repossessed.
- Additional costs: there may be extra fees such as property valuation, legal fees, and other charges.
- Higher interest rates: due to the increased risk for the lender, rates are often higher than your main mortgage.
Your home may be repossessed if you do not keep up repayments on your mortgage.
City Mortgages Club Ltd is an Appointed Representative of Rosemount Financial Solutions (IFA) Ltd which is authorised and regulated by the Financial Conduct Authority. Entered on the FCA Register (https://register.fca.org.uk/) under reference 535515. City Mortgages Club Ltd is registered as a Company in England & Wales No. 11711914. Registered Address: 45-55 Commercial Street, London, E1 6BD, United Kingdom.
