Second charge mortgage may be ‘cost effective’ option to help with renovations | Personal Finance | Finance
He continued: “Second charges are also a great option for those on discounted rates that are maybe waiting for the opportunity for cheaper fixed rates as the swap rates become less volatile.
“Some of these customers may also have early repayment charges (ERC) on their existing mortgage, so could benefit from a second charge rather than break their discount rate.”
However, Mr Davison noted that while the popularity of a second charge mortgage is clear, there are some considerations borrowers should be aware of before pursuing this option.
What to watch out for
Mr Davison said: “As second charge mortgages run alongside any existing mortgage, borrowers would need to repay both simultaneously.
“If your circumstances change, it’s also important to remember that, having a second charge mortgage may impact you should you wish to remortgage your first loan, move properties, or take out an equity release product on your home.”
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