Secured loans and second charge mortgages

What it is

A loan secured on your home from a different lender to your mortgage lender. Your mortgage stays exactly as it is; the new lender takes a "second charge" and is paid after the first lender if the home is ever sold. Terms run from 3 to 30 years; amounts from £10,000 to several hundred thousand; the total borrowing usually cannot exceed 85% or so of the home's value.

Why people use it

• Speed. Two to four weeks is normal; some complete in under two. No solicitor is needed in most cases.
• Keeping a good deal. If you are on a 2% fix with three years left, remortgaging the lot at today's rates would cost far more than adding a second charge for the extra.
• Credit history. Second charge lenders will look at people with missed payments, defaults or a recent CCJ that a high street mortgage lender would decline.
• Self-employed or irregular income. More flexible underwriting.

The cost

Rates run higher than first mortgages: perhaps 7% to 12% in 2026 depending on your circumstances, more for poor credit. Broker and lender fees are typically 1% to 3% of the loan, often added to it. The monthly payment is the real number to look at: £30,000 over 10 years at 9% is about £380 a month.

Age

No minimum. Maximum age at the end of the term varies, but with shorter terms available it is often workable into the seventies. Affordability is tested as with any mortgage.

Compared with the alternatives

Against a further advance: the secured loan is dearer but available when your own lender says no or is slow. Against a remortgage: quicker, and better if your current rate is cheap; worse if your deal is ending anyway. Against a lifetime mortgage: needs monthly payments and has an end date, but the debt does not grow and there is no age barrier.

A secured loan is secured. Miss the payments and the lender can, ultimately, force a sale. Never take one to consolidate unsecured debts you were managing, and never take one for a lifestyle purchase you would not borrow for otherwise.

A note on the numbers. Rates, loan-to-value limits, fees and timescales are typical figures at the time of writing (2026) and vary between lenders and with your age, health and property. This is information, not advice. Equity release must be arranged through an FCA-authorised adviser, who will give you a personalised illustration before you commit to anything.