Second charge lending, Why?

The last three years has seen second charge lending increasing in stature as homeowners become aware of the huge cost of the “pay day loan”. For many years this form of loan was something clients only did as a last resort due to the high costs compared to a re-mortgage. This has changed dramatically  recently as lenders have recognised the potential this form of lending has.

Interest rates have been reduced and are now in line with the average mortgage. Another huge plus is the low cost of setting up a second charge loan along with the speed of completion.

Who can benefit’s from second charge lending:

  • Their client is in a tie-in period and does not want to pay a large penalty
  • Their client needs funds very quickly
  • Their client is or has been in arrears with their current lender and wants to avoid disturbing their current low rate for sub-prime rate
  • They can’t get the income multiples they need for their client
  • The client has an interest only mortgage and does not wish to remortgage to capital & repayment
  • Their client is benefiting from a low SVR and does not wish to disturb their current product

Most common reasons for a second charge loan:

  • They wish to consolidate their outstanding loans and credit cards
  • They wish to carry out home improvements
  • They are looking to inject cash into their business
  • They have had adverse credit and wish to speak to a company who understand their situation
  • They are self-employed and wish to raise finance for one of the above

Can we help?

If you would like more information on how this type of loan could help you pleased do make contact with one of our advisers.

second charge lending

Second charges popular

Second charge business has increased since the Brexit vote according to two thirds (65%) of mortgage brokers. This form of lending is becoming more and more poular as borrowers and brokers alike see the longer term benefits.

Three quarters (73%) of brokers expect gross second charge lending to continue to grow well into 2017 and beyond. Even though there has been a lot of discussion around the implications of the Brexit vote, the overall message from the mortgage market isn’t one of panic.

Re-mortgaging and second charges are clearly on the rise and it is important that brokers are in contact with their clients to ensure it is both suitable and beneficial option for them.

It is understandable that some consumers may be wary of switching their deals, especially at what may seem like an uncertain time. It is therefore vital that brokers are able to educate their clients and explain why this is the perfect time to act.

Consumers often don’t realise how much they could save by taking out a second charge loan to reduce expensive debt; in some cases, it could actually save hundreds of pounds per month. So all in all it is advisable to get expert advice to ensure you are not paying out more per month than you need to.

Need some advice?

If you are looking for a secured loan please do make contact and one of our advisers will be happy to assist.

Second charge

Brexit – No worries for the second charge sector

The second charge sector continued to shake off post-Brexit troubles, with new business volumes in the traditionally-quiet August and September up 6% on 2015.

A report – drawing on data from the Finance and Leasing Association – shows that in July the total value of monthly second charge lending actually increased by 4% from £70m in June to £73m, post-Vote.

On an annualised basis, the market has consolidated at just under £900m (£889m in the 12 months to August) of gross lending after a period of prolonged growth throughout 2015. Experts say that there are several reasons why the outcome of the Referendum failed to dent an increase in second charge lending. The economic uncertainty resulting from the vote may have encouraged more borrowers to consolidate their debts, to make their payments more affordable and to avoid potential future shockwaves.

Ahead of the referendum, consumers were increasingly dependent on unsecured debt as a source of finance, with Bank of England figures showing consumer credit had risen £1.3bn month-on-month in April.

With falls in available interest rates being a feature of the market over the summer, second charges became more attractive options in July and August, and this will continue as rates below 4.5% have arrived on the market.

Can we help?

If you are looking to raise a secured loan please do contact us and one of our qualified advisers who will be happy to guide you.



Increase on Second Charge Lending

On the increase

Secured second charge lending was 41% higher in September and October this year compared to the same period last year. We reported this financial year had started with record levels of applications and the trend is continuing. Since to Brexit vote enquiries have increased substancially as homeowner strive to reduce expensive long term debt.

Second charge lending has always been in the market place but over the last 3 years this form of funding has grown significantly. Existing landlords are now increasingly turning to second charge lending as it is far more cost effective in the long term, plus advancement of funds is significantly quicker than the traditional re-mortgage.


In the years gone by if a homeowner wished to raise capital from the equity within their home brokers invariably recommended a re-mortgage. This situation is changing very rapidly as all parties become more aware of the advantages a second charge loan offers.


Lenders have seen the potential growth in this area and they have responded well, offering a good range of flexible loan deals especially to landlords. Deals are now offered in the short and long term and in the majority of cases are far quicker and cheaper to arrange than a re-mortgage.


This type of loan won’t be suitable for all home owners but it is worth finding out if it is right for you.


Help required?

If you are considering raising funds on your property please do contact one of our fully qualified advisers who will be happy to guide you in the right direction.