Second charge mortgage or further advance

October 7, 2021

Second charge or further advance

What is a second charge?

A second charge is a secured loan, but it will have less precedence than a first charge. If you default on either the first or second charge, either lender can instigate repossession proceedings. A second charge is usually via a different provider to your main mortgage and will more often than not be at a higher rate. These can be appropriate if your existing lender can’t offer a further advance to suit your requirements. This route can make sense if you don’t want to remortgage or switch lenders and potentially incur early repayment charges.

What is a further advance?

A further advance is when you take on additional borrowing from your current mortgage lender. This is typically at a different rate to your main mortgage. This route can make sense if your lender’s further advance is competitive – you don’t want to remortgage or switch lenders and potentially incur early repayment charges.

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