Two fifths of UK homeowners unaware of second charge mortgages: Together – Mortgage Strategy
Just under half (43%) of UK adults are unaware they could release equity in their homes by taking a second charge mortgage to fund renovation costs or assist with debt, Together reveals.
The research, which included a survey of 2,000 UK adults, found that the number of customers opting for second charge mortgages to fund renovation costs jumped by 10% between 2018 and 2022.
While more than two million homeowners are planning to improve their properties this year rather than move house, one in seven (15%) said they don’t know how much they will need to spend.
A further 14% said they’re not sure how they will pull together the money needed to fund renovation plans.
Second charge mortgages run alongside current mortgages and allow borrowers to use their property as security against a loan.
Together’s research also found a further 19% of homeowners are open to second charge mortgages this year to help with existing debt and loan consolidation.
Meanwhile, the latest industry figures highlight the increasing popularity of second charge mortgages to fund renovation plans or help with existing debt consolidation, with a 2.9% month-on-month increase to £104.5m in January this year.
Together head of personal finance intermediary sales James Briggs says: “A second charge mortgage can offer a cost-effective route for homeowners needing to raise money for home improvement plans, when compared to remortgaging.”
“This gives homeowners the option to release the equity in their property that they need for improvements, while keeping what may be a favourable, existing mortgage rate.”