Second Charge Mortgage with Bad Credit: A Guide for UK Homeowners

If you are a homeowner with a less-than-perfect credit history, you might assume that your borrowing options are limited. However, a second charge mortgage with bad credit could be a viable solution, especially if you have sufficient equityThe difference between the value of the property and the amo... in your home and want to avoid disrupting your existing deal.

This guide will explain how second charge mortgages work, who they’re suited for, and how you can apply—even with adverse credit, poor credit scores, or a history of financial difficulty.

The Article is updated as of June 12, 2025. Second charge mortgages are secured loans—your home may be repossessed if you do not keep up repayments.

What is a Second Charge Mortgage?

A second charge mortgage, sometimes known as a secured loan, is a loan secured against the equity in your property. It sits behind your original mortgage and is often used to raise additional funds without remortgaging your primary deal.

Key features:

• You retain your current mortgage arrangement.
• Borrowing is based on your level of equity.
• Commonly used for debt consolidationConsolidating multiple debts into one loan, often using the ..., home improvements, or covering significant financial responsibilities.

Example: If your property is worth £300,000 and your current mortgage balance is £200,000, you may be able to borrow against the remaining £100,000 equity—subject to affordability checks.

Can I Get a Second Charge Mortgage with Bad Credit in the UK?

Yes, you can—particularly through adverse credit mortgage experts and specialist mortgage brokers. These professionals assess your overall financial position, not just your credit score.

You may still qualify if:

• You’ve had credit card debt, CCJs, defaultsMissed payments on credit accounts, which can affect a borro..., or missed payments.
• You are up-to-date with monthly mortgage payments on your primary mortgage.
• You have a steady income and meet the affordability assessment criteria.

Some lenders accept applications from people with poor credit scores, offering access to a wide range of bad credit products with flexible terms. To check your eligibility you can read our article here.

When Is a Second Charge Mortgage a Suitable Option?

A second charge mortgage can help you:

• Pay off credit cards or unsecured loans
• Fund business investments or renovations
• Handle additional expenses like education or legal fees
• Avoid disturbing a superior mortgage rate on your existing mortgage

This type of mortgage can also be used for home improvements. If you are interested you can always contact team of expert mortgage advisers.

What Do Lenders Consider?

Key Factors:

• Current mortgage balance and loan-to-value
• Monthly outgoings and disposable income
• Income ratio and financial stability
• Credit file, including any adverse credit report
• Type of property (residential property or investment property)

Lenders also factor in whether you’ve made timely payments on your bills, your presence on the electoral roll, and how you manage non-essential outgoings.

Application Process and Documents Needed

Step-by-step:

1. Speak to a mortgage advisor or experienced mortgage broker
2. Complete the online form and provide documents like proof of income and credit reports
3. Undergo an affordability check and credit checks
4. Get matched with suitable 2nd charge mortgage lenders

The application to completion process typically takes 2–4 weeks. The average completionThe point at which a property purchase is finalized and owne... time may vary depending on your trading experience or limited trading history.

How Much Can I Borrow and for How Long?

Most lenders offer:

• Between £10,000 and £250,000
• Repayment terms from 3–25 years
• Options for monthly repayments with fixed or variable rate products

Your options depend on:

• Equity in your property
• Your credit record and affordability assessment credit history
• Whether the loan is for a second charge on a city home or 3-bed house

Second Charge vs Remortgaging: What’s Better?

A second charge can be better if:

• You are locked into a good rate with your current lender
• You do not want to pay exit fees or high remortgageRefinancing an existing mortgage with a new mortgage. rate
• You have a bad credit history but need additional borrowingWhat is Additional Borrowing? A Quick Overview When you take...

Unlike traditional loans, this financial tool lets you retain your existing mortgage and borrow separately. Trusted expert team can help you compare repayment options, understand broker fees, and find competitive rate products with favourable terms.

FAQs

What’s the difference between a 2nd charge mortgage and a 1st charge mortgage?

The 1st charge mortgage is your original loan. A 2nd charge mortgage is an additional loan secured against the same property.

What are typical repayment periods?

Anywhere from 3 to 25 years, depending on your personal circumstances and repayment options.

Do I need a perfect credit score?

No, many lenders accept bad credit rating or adverse credit score profiles.

What kind of mortgages are available?

There’s a wider range of second-charge mortgage rates, bad credit mortgage broker options, and flexible deals tailored to individual circumstances.

Ready to Make an Informed Decision?

Speak with a mortgage expert today. Our team offers award-winning financial advice tailored to your current situation, whether you need a financial solution for credit card debt, unsecured borrowing, or help navigating the mortgage marketplace.

Get help from:

• Needing Advice – accurate advice and independent brokers
• The Finance Woman – advice for women with complex income and benefit income
• Rate Switch Rewards – switch your mortgage and save more

Make a successful application today and regain control of your financial health.