Second Mortgage

Secured Loans - £25K for 15yrs *

	Typical APR	Per Mth
	7.9%	£233.57
	8.9%	£247.01
	10.9%	£274.66
* Based on £25000 over 15 years secured and is not a full search of the whole market

 

 

Second mortgage is also known as a secured loan - it's an additional mortgage taken out on a property where there is already a mortgage.

You may wish to take out a secured loan from a bank or a building society in order to carry out home improvements, or you may be taking advantage of the equity in your property to raise funds to set up in business.

The rate of interest on your second mortgage is likely to be higher than that of your first mortgage to reflect the fact you're borrowing more heavily and so deemed to be a higher risk to the lender.

Although both of them are secured on your property, the legal charge of a second mortgage ranks behind or second to the "first" mortgage, making it a higher risk for the lender.

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Last Updated: March 2008 © Moneyextra.com

Our senior editor Robin Amlôt recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.