Large numbers of mortgage brokers are keeping the fact they offer second charge mortgages under their proverbial hats.

This is according to new findings from Brightstar Financial.

This may not be a term you are familiar with. But as a contractor or freelancer, second charge mortgages should be something you are aware of.

What are second charge mortgages?

Second charge mortgages are a type of secured loan which sees an applicant use their current home as security. So if you have already paid off £100,000 on your first mortgage, this can be used as security for your second mortgage. When looking to move to a new home for example, the equity of the home you are moving from can help you to secure the kind of second mortgage you want. If successful, you then have two mortgages to pay off.

This can often be cheaper than remortgaging. This is because remortgaging typically comes with a substantial early repayment charge that many applicants will want to avoid.

This model is advantageous for contractors or freelancers who may be struggling to get unsecured borrowing due to the nature of their work. This kind of borrowing might include a personal loan for example.

Why haven’t I heard of second charge mortgages?

Recent research from Brightstar Financial indicates that only a relatively small number of mortgage applicants are being presented with the option of second charge mortgages.

Brightstar Financial spoke with more than 1,000 intermediaries as part of their research. This included broker firms, directly authorised brokers, independent financial advisors and appointed representatives.

Their research found that just 26% of brokers even mentioned second charge mortgages to mortgage applicants. This is despite brokers being obliged by law to consider various forms of capital raising. This would include a discussion around second charge mortgages when consulting with an applicant.

From any applicant’s perspective, second charge mortgages are another card to consider playing when it comes to looking to secure a new mortgage. But these are seemingly an underused weapon.

What can I do to find out if a second charge mortgage is for me?

Roots Mortgages has experienced advisors who can explain the benefits of second charge mortgages further and how they work in practice. We can help identify whether this is a good option for you and your current situation.


To start a conversation with our team, simply get in touch. You can also get an estimate on how much you can borrow using our mortgage calculator.

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