Can you have two mortgages on one property?

How a second charge works

Your first mortgage stays exactly as it is. A second lender lends against the equity in your home and registers its charge behind the first, so if the home is sold the first lender is repaid before the second.

Because it is secured on your home, the same warning applies as to any mortgage: your home may be repossessed if you do not keep up the repayments.

When it makes sense

The usual case is someone with a low fixed rate and a large early repayment charge who needs to raise money now. Remortgaging the whole balance would mean paying the charge and giving up the rate. A second charge raises the money and leaves the first mortgage untouched.

It can also help where your circumstances have changed since you took the first mortgage and a main lender would not lend the extra, for example after recent credit problems or a move to self-employment.

When something else is better

A further advance from your existing lender is often simpler and cheaper where it is available. Remortgaging can be better if your fixed rate is ending anyway. Second charge rates are usually higher than first mortgage rates, so the comparison is on total cost, not the rate alone.

What we would do

Price all three: a further advance, a remortgage, and a second charge. Then recommend the one that costs least over the period that matters to you.

Second charge mortgages, answered

Can I have two mortgages on one house?

Yes. A second charge mortgage is secured behind your existing one, and your first mortgage carries on unchanged.

Do I need my first lender's permission?

Your first lender is notified and its charge stays first in line. In practice a second charge does not need you to change or remortgage your main mortgage.

Is a second charge more expensive?

The rate is usually higher than a main mortgage, but it can still be cheaper overall than paying an early repayment charge to remortgage.