Second charge vs. Mortgage: Which will work for you?

Last post: Jun 10, 2018

Whether you’re planning an extension or need to free up some capital for another reason, it’s not always easy choosing between a second charge on your home or remortgaging.

Finally paying off your mortgage is a beautiful fantasy for many homeowners. However, increasing numbers of homeowners are now choosing to remortgage their properties, pushing back that wonderful day even further into the future.


Why remortgage?

There are all sorts of reasons why remortgaging is increasing. Our tough economy and heavy-duty working lives are leaving us with less and less disposable income, which leaves us with very little to play with. This may be a tenable situation in everyday life, but when "big stuff" crops up, like IVF treatment, babies, care for older family members and home improvements, it's not always easy to find the cash to cover the costs.


Freeing up equity in your property by remortgaging is one of the most common ports of call in this situation, but a growing number of people are choosing to use secured loans instead.


Secured loan benefits


The suitability of a secured loan vs. remortgaging depends greatly on your personal circumstances. In many cases, for example, mortgage providers will insist you take on a new mortgage at a higher rate. For some people, secured loans are a cheaper option. There may also be hidden fees and costs for borrowers looking to remortgage, which may make choosing a secured loan a more cost-effective option over the long term.


Another advantage is that secured loan providers typically look more favourably upon applicants who own property as this adds extra security. Banks and mortgage providers may be more unwilling to lend more money to customers who do not fit their strict criteria.


Not sure whether a secured loan is the right choice for you? Choice Personal Loans can help you identify your best next step. Contact our finance experts today for more information about secured loans and remortgaging.


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