The Intermediary – August 2026 - Flipbook - Page 48
S E C O N D C H A RG E
Opinion
Raising money
shouldn’t mean
losing a good rate
T
here’s a conversation
happening in a lot of
client reviews right
now, and it tends to
start the same way. The
client needs to raise
money, but they’re part way through a
fixed rate taken in a cheaper era.
Remortgaging the whole balance
to raise capital means refinancing an
entire mortgage to release part of it.
This is rarely the most efficient way
to do the job. When the client is fixed
below today’s rates, it’s an expensive
one too: the whole balance moves
onto current pricing, oen with an
early repayment charge (ERC), to
raise a sum a second charge could have
handled on its own.
A second charge does the job
differently. The additional borrowing
sits behind the existing mortgage,
so the original rate, product and
any early repayment charge are le
untouched, and only the money
actually being raised is priced at
today’s rate. For the right client, that’s
the difference between protecting a
low fixed rate and paying to lose it.
Whether it’s the right answer for any
given client is, of course, a maer for
regulated advice.
The market has noticed. According
to the latest data from the Finance
& Leasing Association (FLA), across
the first five months of 2026, second
charge new business volumes were up
17% on the same period a year earlier,
and in the 12 months to May the
sector lent £2.35bn, up 13% by value
on the year before. That isn’t a niche
twitching. It’s a mainstream need
finding a more sensible route.
And yet, the vast majority of
secured loans are still wrien outside
the wider intermediary market.
Clients are finding these products,
but too oen without the adviser who
knows their wider circumstances in
the room. In a Consumer Duty world,
that should give the profession pause.
Products and services is one of the four
outcomes, and a client steered into
losing a competitive fixed rate, when a
second charge would have protected it,
is not an obviously good outcome.
A good outcome means not letting a competitive rate slip through the client’s fingers
46
The Intermediary | August 2026
PAUL MCGERRIGAN
is CEO of Loan.co.uk
A client steered
into losing a competitive
fixed rate, when a second
charge would have
protected it, is not an
obviously good outcome”
None of this says a remortgage is
wrong. Very oen it’s exactly right,
and standardised products exist for
good reasons. Nor is it an argument
that every adviser should become a
second charge specialist overnight.
The point is narrower: the option
belongs in the conversation. Routes
exist that let an adviser stay the adviser
while someone else does the specialist
work. The job is to know they exist
and to pick one you can defend.
What does defensible look like?
Evidence over assertion. Transparent
client fees that stand up to a fair
value assessment. A commitment
that the client relationship is
protected, including on cross-sell.
Service standards you can verify in
independent reviews rather than take
on trust. It’s the same test I’d apply to
us, as to anyone.
The clients siing on a competitive
fixed rate who also need to raise
money are real, and in the current
market there are more of them, not
fewer. They aren’t a problem to be
managed. They’re a conversation
waiting to be had. ●
