Homeowners are increasingly turning to second charge mortgages, with loans reaching £145 million in June, a significant jump of 7% compared to the same period last year.

This surge in popularity is reflected in the number of new second charge agreements, which rose by 3% to 3,019 in June, according to the Finance & Leasing Association (FLA).

The upward trend is even more pronounced when looking at the first three months of summer. Between April and June, Brits took out £425 million in second mortgages – a massive 20% increase compared to the same period in 2023! This increase led to a total of 8,943 new agreements, a considerable 15% rise from the previous year.

Despite the recent rise, the overall value of new second mortgages over the past year (July 2023 – June 2024) remained stable at £1.5 billion. Similarly, the number of new agreements mirrored the previous year’s figure, totalling 32,274.

Fiona Hoyle, a top expert at the FLA, pointed out the remarkable growth, stating, “June witnessed the highest number of new second charge agreements since September 2022, indicating consistent monthly market growth throughout the first half of 2024.”

She added, “The first six months of 2024 saw an impressive surge in new business, with the value of loans increasing by 17% and the volume of loans growing by 12% compared to the same period in 2023.”

So, what are Brits using these second mortgages for? The majority (59.2%) are using them to consolidate existing debts, while 23.1% are using them for a combination of home improvements and debt consolidation. A further 12.5% are focusing solely on home improvements.

Hoyle offered a word of caution to borrowers: “As always, if you’re worried about keeping up with your repayments, reach out to your lender promptly to find a solution.”

This news follows a similar trend from May, when second charge mortgages hit a 19-month high of £142 million.