second charges and further borrowing on a mortgage

Second Charges/Further Borrowing

Because everyone deserves a second charge…

Is there a home improvement you’ve wanted to do for a while but there just never seems to be enough room in your household’s budget? Have you got a family wedding coming up and you know your son or daughter is expecting a contribution from the bank of Mum and Dad? Regardless of whether you need additional funding for a home renovation, a family expense, want a lease extension or fancy a new car purchase, a Second Charge Mortgage or Further Borrowing on a mortgage could be viable options for you. Allowing you to borrow money while leaving your current mortgage alone, the new mortgage is secured against your property. But knowing which type of mortgage and interest rate to choose can be confusing – that’s where we come in. We can refer you to third party specialists that are equipped to provide advice regarding second charges whilst guiding you through the process.


We understand the importance of getting Second Charge Mortgages and Further Borrowing on a mortgage right, and know how to navigate the pitfalls that can occur if the mortgage process is not handled correctly. That’s why we use a trusted third party to refer our clients to. As for us, we adhere to the principles laid down by the Financial Conduct Authority* (FCA) and their ‘Treating Customers Fairly’* (TCF) initiative, ensuring we provide clients with a high-quality service. Sourcing suitable mortgage rates and deals, or providing you with a referral to someone that can, we’re always there with advice, and are happy to answer any questions or queries you may have. Nothing is ever too much trouble.

To learn more about our range of services, please contact us today. We provide loan support for clients across the UK including areas such as Leeds, Huddersfield, Bradford, York and Harrogate, so we know that we can help you out too.


What Are Second Charge Mortgages?

Second Charge Mortgages are where you take out a second loan on your home, using the equity you’ve accrued as loan security. In simple terms, the equity on your property is the value of your house, flat or apartment minus any mortgage owed on it.* For example, on a £300,000 house with an outstanding mortgage of £200,000, the equity would be £100,000. With a Second Charge Mortgage, you are borrowing against the £100,000 equity.

With these mortgages, you’ll need to have a sum of property equity that is at least equal to the mortgage loan amount you’d like to secure against it. For example, you could get mortgages of £25,000, £50,000 or £75,000 against £100,000 equity, but you couldn’t take out a mortgage that’s above £100,000. With these mortgages secured against your property, you must keep up mortgage repayments, or the property will be at risk.

Why Take Out Second Charge Mortgages?

Though funding major home improvements and coping with changes in financial circumstances are among the main reasons that clients of ours take out Second Charge Mortgages, there are other reasons too. A Second Charge Mortgage can be useful if:

  • You have a low interest rate on your current mortgage and you’d need to remortgage to a more expensive interest rate to gain additional funds.
  • Your current mortgage has a very high early repayment charge.
  • Your existing mortgage lender only provides mortgage loans that are more expensive than Second Charge Mortgages.
  • Your credit rating or credit score has dropped, making alternatives such as remortgaging more expensive.

That being said, there are situations where these mortgages are not the best route, and our mortgage advisers can talk you through the loan options available to you. For example, if you’re only just managing to meet your current mortgage repayments, taking out a Second Charge Mortgage isn’t going to help things. To find out whether this mortgage type is right for you, we recommend getting in touch with our trusted mortgage brokers today. Aiding clients across the UK including areas such as Leeds, Huddersfield, Bradford, York and Harrogate, we have vast experience with mortgages, so are sure we can help you too.

second charge mortgages

Second Charge Mortgage Rates & LTV Ratios

As you may remember or know, when you take out a traditional mortgage, the amount you borrow for the mortgage loan is set against the whole value of the property. For example, if you buy a house worth £200,000, and you borrow £180,000, that’s a 90% loan-to-value ratio (LTV)*. However, Second Charge Mortgages work differently.

Should you take out a Second Charge Mortgage, the total of the debt on your existing mortgage and the Second Charge Mortgage can’t be more than the stated maximum LTV. The equity you have in your home, as well as the mortgage loan amount you’ve paid off, has an impact on the interest rate you can get on your Second Charge Mortgage too.

When it comes to these mortgages, both fixed rate mortgages and variable rate mortgages are available. Fixed rate mortgages are where the interest rate you pay on the mortgage stays the same throughout the mortgage term*, whereas variable rate mortgages means the interest you pay changes from month to month*.

There are three main types of variable rate mortgages, and these include tracker mortgages, discount mortgages and capped rate mortgages:

If you’re unsure whether you’re eligible for a Second Charge Mortgage, or which type of mortgage to choose, let our third party specialists help. With access to suitable deals, we’re confident that they will help you to find the best Second Charge Mortgage for you. Contact us today to find out more.


What Is Further Borrowing On A Mortgage?

Have you been considering home improvements such as an extension or conservatory? Do you need money for school fees, a new boiler or new car? Further Borrowing on a mortgage could help. Further Borrowing on a mortgage means that when you remortgage you borrow more money and therefore increase the overall size of your mortgage loan*. You can then use these extra funds to pay for home improvements or school fees, for example.

When it comes to Further Borrowing, and borrowing additional funds, mortgage lenders will carry out affordability checks to ensure that you can afford the mortgage loan before they agree to lend you any money. Mortgage lenders will look at your income, bank statements and spending habits, as well as conduct a credit check. Taking all this into account, the mortgage lender will calculate whether you’ll be able to afford the mortgage loan and keep up with the payment schedule that’s been recommended.

As with Second Charge Mortgages, mortgage lenders will also take your LTV into account. The lower your LTV, the less risky you’ll be to a mortgage lender as you own more of your home – and the more comfortable they’ll be with lending you the extra money.

further borrowing on a mortgage

If you decide on a further advance – where you borrow more from your current mortgage lender – the interest rate may differ to your main mortgage. However, a further advance may be a good option if your mortgage lender’s further advance rate is competitive. Before you apply for a further advance, you should ensure that:

  • You have a good credit record and credit score.
  • You’re confident that you can keep up with the extra monthly repayments, and you can prove that you can afford them.
  • The value of your home has increased beyond the mortgage amount you initially borrowed, so that you have equity in your property.

Unsure if Further Borrowing on a mortgage is right for you? Need help choosing between Second Charge Mortgages and a further advance? Not a problem. We can refer you to advisers that can help, so if you’re located in the UK including areas such as Leeds, Harrogate, Bradford, York and Huddersfield, we encourage you to get in touch with our team today.


Why Choose Avail Mortgages?

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We have vast experience when it comes to sourcing suitable deals or offering referrals to a third party that can. Right from the start, we’ll provide you with reliable advice, taking your current mortgage and financial situation into account. Whether you’d like a Second Charge Mortgage due to home renovations, or Further Borrowing on a mortgage to help with your children’s school fees, we’ll put you in touch with the right advisors to help you make the right choice for you.

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Flat Fee

Services regarding Second Charges are offered by a third party, but for any service that we offer, we charge a flat fee of £495 in 99% of circumstances. Only in special circumstances would this be more. This means we treat all of our clients fairly. We’re always honest and open about any mortgage fees that may pop up along the way, so that there are never any nasty surprises.

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We’ve invested heavily in technology, and we’re extremely proud of our mortgage calculator and client portal. Helping us to source suitable live rates and to determine the amount that you’ll need to borrow, we also use technology to speed up the mortgage process. That means no waiting around for hours. With Avail Mortgages, you can have your mortgage loan application approved in a matter of minutes.

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If you’re ever in need of mortgage advice, or should an unexpected issue arise, we’ll be there to help. No question is ever daft. No issue is ever too small. We’ve got your back and we’ve got you covered.


Get In Touch

What are Second Charge Mortgages? What is Further Borrowing on a mortgage? How can a mortgage broker such as Avail Mortgages help? For answers to all of these questions and more via a referral, please get in touch with our mortgage advisers today. We help clients in Leeds and the surrounding areas including Bradford, Huddersfield, Sheffield, York and Harrogate, so we look forward to helping you too.