The Intermediary –- May 2026 - Flipbook - Page 64
S E C O N D C H A RG E
Opinion
The consolidation
conversation needs
to change
I
n today’s economic climate,
conversations around
consumer debt are oen
framed in absolutes. Debt
is bad. Borrowing more is
risky. Consolidation means
greater indebtedness.
While those concerns are
understandable, they can also
oversimplify a far more nuanced
reality. Households continue to feel
the cumulative impact of inflationary
pressures, elevated living costs,
geopolitical instability and higher
interest rates.
Against that backdrop, unsecured
borrowing has continued to rise across
the UK. Recent Bank of England
data showed consumer credit growth
increasing further into 2026, with
continued demand for credit cards,
personal loans and other forms of
unsecured borrowing.
Despite these realities, there
remains a persistent perception within
some parts of the market that debt
consolidation – particularly through
a second charge – automatically leads
to greater indebtedness or poorer
customer outcomes. The reality is
oen very different.
Sustainable restructuring
Debt consolidation, when delivered
responsibly, is fundamentally
about restructuring debt in a more
manageable and sustainable way. It is
not about encouraging unnecessary
borrowing, but helping customers
regain control of their financial
position over the long-term.
For many homeowners, the
traditional route of refinancing
their first charge mortgage is no
longer straightforward. Customers
siing on historically low fixed-rate
mortgages secured several years
ago may now face a significantly
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The Intermediary | May 2026
higher rate environment. In many
cases, refinancing the entire balance
could materially increase monthly
outgoings or result in substantially
more interest over the life of the loan.
This is where second charge lending
has an important role. A second
charge allows customers to retain the
benefit of their existing product while
accessing additional borrowing. For
many, that can represent a far more
efficient and pragmatic solution than
disturbing a low-rate first mortgage.
Importantly, it also enables advisers to
tailor solutions around affordability.
Choice is key
We should not position second charges
as a niche or secondary consideration.
Nor should outdated perceptions
prevent customers from accessing
solutions that may genuinely improve
their financial wellbeing. The modern
second charge market is sophisticated,
highly regulated and aligned to the
evolving needs of UK borrowers.
In practice, we regularly see
customers using second charge
mortgages to consolidate higher-cost
unsecured debt into a structure that
delivers lower monthly commitments
and improved cashflow management.
For some, that breathing space is
invaluable.
Of course, any form of secured
borrowing must always be approached
carefully. Brokers and lenders alike
have a duty to ensure customers
fully understand the implications
of extending repayment terms or
securing previously unsecured
borrowing against their property.
But responsible lending should not
be confused with restricting access
to viable options.Indebtedness is
not defined purely by the existence
of borrowing. True financial
vulnerability is oen driven by
JONNY JONES
is CEO at Interbridge Mortgages
unaffordable monthly commitments,
fragmented credit arrangements
and the absence of flexibility.
Consolidation, when structured
correctly, can alleviate those pressures
rather than exacerbate them.
The brokers achieving the strongest
customer outcomes today are those
embracing a broader lending toolkit
and holistic financial advice.
As lenders, we have a responsibility
to continue evolving the narrative. We
must communicate clearly, educate
consistently and work collaboratively
to challenge outdated assumptions.
The industry has made
significant progress in improving
professionalism, underwriting
standards and customer outcomes,
but there remains more to do in
ensuring both brokers and customers
fully understand the modern value
proposition of second charge lending.
Second charge mortgages will not be
the right answer for every borrower,
but for many customers navigating
today’s economic realities, they can
provide a practical and highly effective
route to regaining financial control.
The opportunity now is for the
industry to come together. Lenders,
distributors, networks and brokers all
have a role to play in demonstrating
how second charge can support
positive customer outcomes.
If we are serious about improving
financial wellbeing, then the
conversation should not be about
whether second charges have a place
in modern lending. It should be
about ensuring every customer has
the opportunity to benefit from a
credible product. ●
