Second charge lending has soared in the last year

Second charge lending has soared in the last year, with the number of people taking out these specialist mortgages increasing by nearly a quarter.

The value of new business in this area of the mortgage market went up by 23% to £108 million in May 2019, according to new figures from the Finance & Leasing Association (FLA). Meanwhile, the number of new agreements increased by 22%.

The second charge mortgage market remained buoyant in May, as monthly new business reached more than £100 million for the second time this year.”

What are second charge mortgages?

A second charge loan is, quite literally, a second mortgage. It is a loan which is secured against your home in the same way as a standard mortgage. Homeowners can take a second mortgage out with another lender, so can shop around to find the best deal.

The loan can be used a bit like a re-mortgage or personal loan to raise additional money for things like home improvements.

Commonly they are used by people who are already on a good rate and don’t want to re-mortgage away from this to raise money.

Others use it to avoid paying early repayment charges associated with re-mortgaging or because they have experienced credit problems and may therefore find switching to a new deal tricky.

May’s increase in second charge lending marks the ninth consecutive month of new business growth.

Back in April the FLA reported a 24% rise in new second mortgages.

Need help?

If you are considering taking out a new loan against your property please get in touch with one of our fully qualified advisers who will be happy to guide you.