Mortgage Calculators
Second Charge Mortgage Calculator
A second charge lets you raise money against your home without touching the first mortgage. See how much equity is actually available before you apply.
- Equity available at a given LTV ceiling
- Your combined loan to value
- Whether the amount you want fits
- When a remortgage would be better
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A second charge is a second loan secured on your home. Both lenders have a claim on the property, and it is at risk if either falls into arrears. Think carefully before securing other debts against your home. This is an estimate based on typical lender criteria and current rates. It is not advice, a recommendation, or an offer of credit. What you can actually borrow depends on your circumstances and the lender's own assessment.
When a second charge makes sense, and when it does not
A second charge sits behind your existing mortgage on the same property. The first lender keeps priority, and the second charge lender takes what is left if the property is ever sold. That extra risk is why second charge rates are usually higher than first charge rates.
The case for one is normally that your existing mortgage is worth keeping. If you are locked into a low fixed rate, or a large early repayment charge applies, or your circumstances have worsened since you took it out, disturbing the first charge to raise money can cost far more than borrowing separately behind it.
A second charge is secured on your home. If you cannot keep up the payments, your home is at risk, and that remains true even though the first mortgage is entirely up to date. Consolidating unsecured debt this way lowers the monthly cost but converts debt that was not secured on your home into debt that is.
When a second charge beats a remortgage
Someone three years into a ten year fix at 1.89% needs £40,000 for an extension. Remortgaging the whole £220,000 balance onto a current rate means giving up that 1.89% on the entire loan and, in most cases, paying an early repayment charge on the way out. A second charge leaves the first mortgage completely untouched and borrows the £40,000 separately, at a higher rate but on a much smaller sum.
The arithmetic usually favours the second charge whenever the existing rate is well below current pricing, or where an early repayment charge applies, or where the first mortgage lender will not lend more. It stops favouring it once the first mortgage is close to its renewal date, because at that point a single remortgage covering both purposes is normally simpler and cheaper.
Second charges are also used where the borrower would struggle to pass a fresh full-loan affordability assessment, or where the income is unusual enough that the first lender will not increase its exposure. The second charge market has a wider tolerance for complex income and for adverse credit than the mainstream first charge market does.
What to weigh before you take one
You end up with two secured loans on one property, two payments and two lenders, and both have a claim on the house. If either falls into arrears the property is at risk. That is a materially different position from carrying an unsecured personal loan, and it is the single most important thing to understand before proceeding.
The rate on a second charge is normally higher than a first charge, because the second lender is behind the first in the queue if the property is sold. Terms are often shorter as well. Set against that, you keep a cheap first mortgage that may be irreplaceable, so the right comparison is the total cost of both routes over the same period rather than the two rates side by side.
Consolidating unsecured debt this way deserves particular care. Moving a credit card balance onto a secured loan usually lowers the monthly payment and usually increases the total repaid, because you are stretching a short debt over a long term and securing it against your home. Think carefully before securing other debts against your home.
Where to go next
Independent sources
- MoneyHelper on second charges — Impartial guidance on second charge borrowing
- MoneyHelper on further advances — The alternative route to raising money
Tell Us What You Need to Raise
Tell us your property value, what is outstanding and what you need. We will compare a second charge against a full remortgage and a further advance.
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Read More About Raising Money
A second charge is one route. These are the ones it is usually compared against.
Second Charge Mortgages
Raising money without disturbing the rate on your existing mortgage.
Debt Consolidation Mortgages
When folding debt into a mortgage helps, and when it quietly costs more.
See whether a second charge fits
Sometimes it beats remortgaging and sometimes it does not. Tell us what you need to raise and we will compare both routes.
Frequently Asked Questions – Second Charge Mortgage Calculator
What is a second charge mortgage?
A loan secured against your property that sits behind your existing mortgage. The first lender retains priority over the proceeds if the property is sold, and the second charge lender is repaid after them.
How much can I borrow on a second charge?
It depends on your equity and the lender’s maximum combined loan to value, commonly between 75% and 85%. Take the property value, apply that percentage, subtract the first mortgage balance, and what is left is the theoretical maximum before affordability is considered.
Is a second charge better than remortgaging?
Sometimes. It is usually better where your existing rate is low and worth keeping, where an early repayment charge would apply, or where your income or credit file has weakened since you took the first mortgage out. Where none of those apply, a remortgage is often cheaper.
Can I get a second charge with bad credit?
Frequently yes. Second charge lenders tend to be more flexible on credit history than mainstream first charge lenders, because they are lending against equity. Expect a higher rate to reflect that.
Is my home at risk with a second charge?
Yes. It is secured on your property in the same way your main mortgage is, so your home may be repossessed if you do not keep up repayments, even if the first mortgage is fully up to date.
Does a second charge affect my main mortgage?
It does not change the terms of your existing mortgage, which continues exactly as before. It does reduce your remaining equity, which can affect what you are able to do later, including remortgaging the first charge.