What is a second charge loan?
A second charge loan (also known as a second mortgage) is a loan secured against a property you already own that has an existing mortgage on it. The new lender takes a second charge — meaning they would be repaid second (after the first mortgage lender) if the property were ever sold or repossessed.
Because second charge lenders take on more risk than first charge lenders, the interest rates are typically higher — but they are still significantly lower than unsecured personal loans or credit cards.
Why choose a second charge over a remortgage?
Avoid early repayment charges
If your existing mortgage has a fixed rate with hefty ERCs, breaking it to remortgage could cost thousands. A second charge lets you borrow without touching your first mortgage.
Keep your existing rate
If you secured a favourable rate on your first mortgage that you'd lose on a full remortgage, a second charge preserves that rate for the remaining term.
Speed
Second charge loans can often be arranged faster than a full remortgage, which requires a new affordability assessment on the entire loan balance.
Credit issues
If your credit has deteriorated since your original mortgage, a full remortgage might not be possible. A second charge lender may still consider you based on the equity available.
What affects second charge loan pricing?
The most important factor in your pricing is the combined LTV — first mortgage plus second charge as a percentage of the property value. Lower combined LTV improves pricing and opens more lender options, even with adverse credit:
Under 50% combined LTV
Excellent equity cushion — most specialist lenders will consider despite adverse credit. Best pricing available.
50–60% combined LTV
Comfortable position — good range of adverse credit lender options. Competitive terms.
60–70% combined LTV
Standard adverse credit range — solid LTV position still opens specialist lender options.
70–75% combined LTV
Higher risk range — limited specialist lenders available; strong property income or business cash flow required.
Second charge loans secured on your main residence are regulated by the FCA. We only introduce commercial and investment second charge loans — not regulated residential products. All second charge introductions are on investment or commercial property.
Can I get a second charge loan with adverse credit?
Yes. Second charge lenders on our panel assess the available equity in the property and your ability to service both mortgages alongside your credit history. Strong equity (low combined LTV) significantly improves your options even with a poor credit history — this is a fundamentally equity-driven product.