Posted by on Feb 7, 2017 in Second Charge Mortgages |

Buying a house has always been among the prime focus for most people in the United Kingdom. Considering the fact that not everyone can pay a complete price in one go, the use of mortgages is quite common here.

Buying a house on mortgage is good, but it gets complicated if you try to save your hard earned money. It is only down the road when your mortgage is about to retire that you realize that the interest rate you paid was lesser than the variable rate you lender is demanding. When that happens, you have the option to leave your original mortgage to save those excessive payments and opt for either one of these alternative: Remortgage or Second Charge Mortgage.

Let us compare the two alternatives to find out which one is actually right to move towards.


When we talk about remortgage, we refer to the switching of mortgage deal, either by staying with the same lender or moving to another one. Following are some of the pros of this option:

  • If you move towards a remortgage, you are likely to save up on your interest payment by opting for a deal that requires lower interest to be paid.
  • Moving towards a remortgage can also allow you to end your debts faster than the original mortgage.
  • Paying lesser interest per month can allow you to become financially more stable since a smaller amount of your monthly pay check is deducted each month. This comes in handy if you have a major life event down the road and you need to save up for that while paying your debt off.

Second Charge Mortgage

Second Charge is simply a second loan secured against the same property. Following are certain pros of opting for a second charge mortgage:

  • To acquire second charge mortgage, you have the freedom to use all or any equipment in your home. This is great if you want to raise money for some other thing from the same property that you are still paying off.
  • With Second Charge Mortgage, you are allowed to take a loan of a thousand pounds and onwards.
  • When you opt for second charge, your lender is liable to perform affordability checks over your financial circumstances. This is great because it allows them to offer a loan in case you would be able to pay it back, consequently saving you from future misery.

The Better Option

Neither of the options is better than each other. Both are great in their own way and can be opted depending upon the financial condition and the requirement of the borrower. A good piece of advice is to always go to your existing lender first and ask it about the available alternates. In case its deals do not compliment your financial position, then there is always the option of shopping the market and comparing both the alternatives – remortgage and second charge mortgage to find the one that suits you the best.

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