Many homeowners not aware of second charge options

March 2, 2023 by Brendan O'Neill

Home owners

New research by Together has shown that almost half of those who own their homes and are looking for a way to raise funds are not aware of the potential of second charge mortgages to help with that.

According to the figures that have been released, 43% of property owners in the UK are unaware of how they can get the funds that they need for anything from managing debts to carrying out improvements to their homes through second charge loans. That suggests that this may be an untapped source for mortgage advisors.

This is made even more significant by the fact that the same research shows over 2 million people who own homes intend to carry out upgrades in 2023, instead of seeking a move. Despite that, 15% of them – which amounts to one out of every seven – do not have a clear idea of the cost of these improvements. Another 14% told Together that they have no plan in place to pay for them.

Second charge mortgages are becoming more popular, with the numbers opting for them rising by 10% during the four years up to the end of 2022. There is clearly still a widespread lack of awareness though, with James Briggs from Together telling Financial Reporter that:

“A second charge mortgage can offer a cost-effective route for homeowners needing to raise money for home improvement plans, when compared to remortgaging.”

Advisors who have gained the necessary CeMAP qualification can promote second charge loans as an alternative to remortgaging.