Second charge lending in November last year came to £137.8m

This is an increase of 11.5% on October’s figure and is the second post-credit crunch record breaking month in a row.

In fact, it’s accurate to say that second charge lending is witnessing its highest period of lending (Q4) since 2008.

In November, over 3,000 loans were written for the first time since 2008, making for a year-on-year increase of 1,000 loans – itself another record.

And second charge lending hit £1.06bn on an annual basis, the first time it has passed the £1bn watermark since 2019.

The only sore spot is completion time slowing by an average of 5.2 days over the month, coming to an average completion time of 22.6 days. It’s widely considered that lenders’ service levels are being met and the increase is more reflective of delays caused by the Land Registry backlog.

Re-mortgage v Second charge

So, why would one opt to take the second charge route rather than re-mortgage?

Lots of reasons actually. For example, many customers have a really good first mortgage deal, maybe a great fixed or tracker rate that they don’t want to give up. Taking a second charge at a higher rate may mean that the blended rate across the whole debt is still lower than a new first deal; so a second charge loan can make good financial sense

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Some borrowers may face a stiff early repayment charge on their first mortgage if they re-mortgage totally. Others may have had a change in their circumstances which means switching to a bigger first charge mortgage is not an option. Perhaps they started a family or changed jobs resulting in a different source of income. Let’s not forget, second charges can be considerably quicker to complete than re-mortgages.

Like to know more?

If you would like to know more about second charge loans please do make contact and one of our advisers will be happy to assist.