A second charge mortgage is a secured loan that allows homeowners to borrow money against the equity in their property, while keeping their existing mortgage unchanged. Unlike remortgaging, which replaces your current mortgage with a new one, a second charge mortgage is an additional loan secured against your home.
Homeowners often use second charge mortgages to:
✔ Fund home improvements
✔ Consolidate existing debts
✔ Cover major expenses like education or medical bills
✔ Invest in buy-to-let properties
Because a second charge mortgage is secured against your property, lenders typically offer lower interest rates than unsecured loans. However, rates are higher than first charge mortgages due to the increased risk for lenders.
As of 2025, second charge mortgage interest rates in the UK range from 6% to 14.2% per annum, depending on factors like loan amount, credit score, and equity.
| Loan-to-Value (LTV) Ratio | Typical Interest Rate (APR) |
|---|---|
| Up to 50% LTV | 6% – 9% |
| 50% – 75% LTV | 8% – 12% |
| Above 75% LTV | 11% – 14.2% |
Important note: Rates fluctuate based on market conditions, lender policies, and the Bank of England’s base interest rate.
