The Intermediary – October 2026 - Flipbook - Page 52
BELT AND
BRACES
NAVIGATING UNEXPECTED COSTS
WITH SECOND CHARGE
Marvin Onumonu
As household finances remain under pressure,
buy-to-let and bridging at United Trust Bank,
decisions. Higher living costs and unexpected
echoes this, noting that the typical borrower
bills are reducing financial headroom, while
may not have changed dramatically, but their
the substantial cost of moving or replacing
borrowing characteristics have.
an existing mortgage is limiting the options
available to many borrowers.
For some, the challenge is managing credit
cards, loans and other commitments alongside
everyday expenses. For others, it is finding the
Tolfree says: “What we are seeing is customers
borrowing slightly larger amounts and, in some
cases, at higher [loan-to-values (LTVs)] than a few
years ago.”
He points to Finance & Leasing Association
money for urgent property repairs, supporting
(FLA) data showing 3,919 new second charge
family members, or adapting a home to meet
agreements in July, up 1% year-on-year.
changing needs. Against this backdrop, second
However, this cannot be explained by financial
charge finance is attracting greater attention.
pressure alone.
A changing market
Clifton Private Finance, says: “Among the clients
The cost-of-living crisis has encouraged
I speak to, protecting an existing mortgage
homeowners to look closer at their finances.
deal is a recurring motivation. Someone may
Eddie Lau, broker account manager at Norton
Alex Chambers, senior private client adviser at
need additional borrowing, but that does not
Broker Services, says: “We have seen for some
necessarily mean it makes sense to refinance
time that homeowners are looking at the equity
everything they already owe.
in their property as a way to help manage
“Home improvements and debt consolidation
wider financial commitments, particularly as
feature heavily in those conversations. Our
household costs remain under pressure.
experience includes high-net-worth (HNW)
“Debt consolidation remains by far the most
homeowners, so I would be cautious about
common reason for taking out a second charge,
presenting every second charge enquiry as
but we also continue to see demand for home
evidence of financial distress.
improvements, major one-off expenses and
financial support for family members.”
Although there is no single typical borrower
profile, homeowners of all types are becoming
“For many, the question is how to fund a
specific need without unnecessarily increasing
the cost of their existing mortgage.”
Nigel Brookes, non-executive director at Beagle
more aware of the choices available to them when
Finance and board member at Simple Financial
they need to raise capital.
Planning, similarly highlights the importance of
Lau adds: “For some, a second charge can
50
Buster Tolfree, managing director of mortgages,
homeowners across the UK are facing difficult
protecting existing first charge rates.
offer a way to access funds without disturbing an
For example, a homeowner might need to
existing first charge mortgage, especially where
raise £30,000 or £50,000, but remortgaging
that deal remains competitive.”
could mean paying an early repayment charge
The Intermediary | October 2026
