Is a second charge mortgage cheaper than remortgaging?

A second charge mortgage, or a second mortgage, is a secured loan. In some cases, it could be a cheaper option than remortgaging. To determine whether a second charge would be a suitable option for you, seek expert mortgage advice from Deal Direct.

If you obtain a second charge, it means that your home would have two mortgages secured against it. This may sound risky, or an intimidating prospect, but it could be a very good way of raising money. And more affordable than you think, because of the very low mortgage rates on offer at present.

One of the most popular reasons for doing this is to renovate your existing property. Not only could this make your home much more comfortable but, it could be a great way to create future value, increasing the level of equity over time. But, it might not be a good idea if you have only just taken out your first mortgage or your repayments are already a struggle.

Another very popular reason would be debt consolidation. By having all your debts under the one umbrella, repayments have the potential to be much more affordable, particularly as mortgage rates are still very low. However, if the debts are relatively small amounts, from credit cards, for instance, you might initially be reducing the amount of interest you pay, but end up paying more in the long run.

As you can see, the area of second charges is quite complex, and you may find there are costly pitfalls if you attempt to negotiate the market by yourself. Requesting the professional advice of Deal Direct’s mortgage advisors means that you could avoid these pitfalls, and secure the mortgage option that works best for you.

Speak to an advisor today on 0800 048 8828.