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Another option for you could be a second charge loan. A second charge loan is a loan secured against an asset, such as your home, as an additional mortgage with a new lender that sits on top of your pre-existing mortgage and takes second priority to the first. Your current mortgage is often referred to as a first charge on the property, hence an additional loan from another lender is referred to as a second charge. This means that if you have a good interest rate or are at the edge of your borrowing capacity with your current lender, you can look to borrow more funds with an additional lender without losing out on the benefits of your current mortgage. For example, if you have a mortgage with a low interest rate fixed for three more years, you may not want to move this mortgage and the additional borrowing requirement to another lender at a higher interest rate.

On a second charge there is no need to pay early repayment charges as it is a completely separate account to your existing mortgage. As with a further advance, however, it’s important to note that you will be borrowing against your home and therefore it carries the same risk of losing your property should you be unable to make the repayments at any time. You will also need permission from your existing mortgage lender to take out a second charge mortgage.