It seems Brits are feeling more confident about their finances, as the latest figures show a massive jump in second charge mortgages.

Second Charge Mortgages: What Are They?

A second charge mortgage is a bit like a second mortgage, but instead of your home being the main security, it’s a second security. This means that if you can’t pay back the loan, the lender can take your house, but only after they’ve been paid by the main mortgage lender.

New Figures Show a Big Increase

The Finance and Leasing Association (FLA) has released some interesting figures for April. The number of new second charge mortgages went up by a whopping 36% compared to last year, hitting 2,967 new loans.

And the value of these loans also skyrocketed – up 40% to £138 million!

Why are People Taking Out Second Charge Mortgages?

There are a few main reasons why people are opting for second charge mortgages:

• Consolidating Debt: Lots of people are using second charge mortgages to pay off other debts, like credit cards or loans. This can be a good way to save money on interest rates, but it’s important to make sure you can actually afford the repayments.
• Home Improvements: Want to renovate your kitchen or build an extension? A second charge mortgage can give you the cash you need.
• Other Expenses: People are also using these loans for other expenses, like paying for a wedding or a new car.

The Big Picture

The FLA’s data shows that the second charge mortgage market is really picking up steam. Over the last three months, the value of second charge loans has gone up by 23%, and the number of new loans has increased by 18%.

It’s worth noting that over the year, the value of second charge loans was down by 3% and the number of new agreements was also down by 3%. However, the experts at the FLA say that the market has been on an upward trend this year, with increases every month.

What Happens if You Can’t Repay?

Remember, like any loan, it’s crucial to make sure you can afford the repayments before taking out a second charge mortgage. If you start struggling, it’s important to speak to your lender right away. They may be able to help you find a solution, such as reducing your payments or extending the loan term.