More commonly known as a secured loan or second charge loan this type of loan sits behind another loan (first charge) secured on the same property. This could be on your home or an investment property.

If you’re looking to make home improvements, consolidate some unsecured debt, or fund a big purchase, a secured loan is a great option to consider if you are not in a position to remortgage the first charge loan. This could be due to early repayment charges being in place on the first charge loan or if it is not possible to obtain a further advance with the existing first charge lender. Interest rates are usually higher than the first charge mortgage as the second mortgage lender carries a higher risk of their loan not being repaid as the first charge lenders loan repayment has priority over the second mortgage; once the first charge mortgage is repaid then any funds remaining are used to repay the second mortgage. Second mortgage interest rates are usually lower than an unsecured loan as the lender has security for the loan. The unsecured loan term is usually capped at 5-years whereas a second mortgage loan term is similar to an ordinary first charge mortgage.