Arrears on a second charge mortgage, sometimes called a secured loan, are not the same as arrears on your main mortgage, but they are still secured against your home and are usually treated seriously for that reason. A second charge sits behind your main mortgage, so falling behind on it can affect a remortgage even if your main mortgage payments have always been on time. Lenders considering your main mortgage will generally want to know about it, and it can affect how straightforward it is to remortgage or repay the second charge at the same time.
This page looks at how a second charge relates to your main mortgage, how arrears on it are usually recorded, and what to check before you remortgage. For arrears on your main mortgage itself, see our page on mortgage arrears.
On this page
This page covers
- Credit issue
- Mortgage arrearsUsually stays on your credit file for 6 years from the date recorded.
In short
- A second charge mortgage is a separate loan secured behind your main mortgage.
- Arrears on it are recorded and dated in the same way as any other credit issue, and stay for 6 years.
- Falling behind on a second charge can affect a remortgage even if your main mortgage is up to date.
- Remortgaging sometimes involves repaying an existing second charge as part of the new loan.
Your home may be repossessed if you do not keep up repayments on your mortgage. Think carefully before securing other debts against your home. Borrowing over a longer term can mean paying back more in total.
What is a second charge mortgage, and how does it relate to your main mortgage?
A second charge mortgage, or secured loan, is a separate loan secured against your home, sitting behind your existing mortgage. It is often used to raise money without disturbing the main mortgage deal, for example to avoid an early repayment charge. Because both loans are secured on the same property, your home can be at risk if you fall behind on either one, not just the main mortgage.
If you fall behind on the second charge, the lender behind that loan follows its own arrears and forbearance process, similar in principle to a main mortgage lender. Your main mortgage lender is not automatically informed, but the arrears will usually show on your credit file regardless.
How are second charge arrears recorded, and how do they compare to main mortgage arrears?
| Main mortgage arrears | Second charge arrears | |
|---|---|---|
| Where it is recorded | Against your main mortgage account | Against the second charge account, separately |
| How long it stays | 6 years from when recorded | 6 years from when recorded |
| Effect on your main mortgage lender | Direct, since it is their own account | Indirect, but may still be asked about on a new application |
| Effect on remortgaging | Central to the assessment | Considered alongside the main mortgage position |
General illustration. Both are secured on your home and are usually treated seriously.
Can you remortgage to repay a second charge with arrears on it?
Sometimes a remortgage is used to repay, or redeem, an existing second charge, combining both loans into one mortgage with your main lender or a new one. Whether this is possible with arrears currently on the second charge depends on the same kind of factors as any arrears case: how much is owed, how much equity is available and how recent the arrears are.
If the aim is mainly to consolidate the second charge and other debts into your main mortgage, our page on debt consolidation remortgage explains the trade-offs, including that it turns the debt into a long-term cost secured on your home.
What should you check before you remortgage?
- The current balance and arrears on the second charge, with a recent statement
- Whether the second charge lender has agreed any arrangement
- How the arrears show on your Experian, Equifax and TransUnion reports
- Whether your main mortgage payments have stayed up to date throughout
- An estimate of your property’s value, since this sets the equity behind both loans
Falling behind on either your main mortgage or a second charge puts your home at risk. If you are struggling with either, free advice is available from MoneyHelper, StepChange and National Debtline.
What may affect options with arrears on a secured loan
| Factor | Why it matters |
|---|---|
| Balance and arrears on the second charge | The amount owed and behind affects how much would need to be repaid or restructured. |
| Main mortgage payment record | A clean main mortgage record alongside second charge arrears may still open some options. |
| Combined loan to value | Lenders look at the total secured debt against your home, not just the main mortgage. |
| Whether the second charge would be repaid | Redeeming the second charge as part of the remortgage changes the amount you need to borrow. |
| Age and status of the arrears | Recent, unresolved arrears carry more weight than older, cleared ones. |
| Other credit issues | Any related default or CCJ from the same lender or debt is usually considered together. |
| Income and affordability | The combined cost of any new mortgage needs to be affordable under a standard assessment. |
These are general points, not lender rules. Each lender sets and changes its own criteria.
Information an adviser may ask for
You don’t need all of this to make an enquiry. It helps to know where to find it, because an adviser is likely to ask about most of it.
- A recent statement from the second charge lender showing the balance and arrears
- Details of any arrangement agreed with the second charge lender
- Recent main mortgage statements
- Recent copies of your Experian, Equifax and TransUnion reports
- An estimate of your property’s value
- Proof of your current income and outgoings
Frequently asked questions
Does my main mortgage lender find out if I fall behind on a second charge?
Not automatically, since the loans are usually managed separately. The arrears are still likely to show on your credit file, though, and any new lender is likely to ask about all your secured borrowing.
Can a remortgage clear a second charge that has arrears on it?
It can be one option, depending on the amount owed, your equity and how recent the arrears are. It usually means combining both debts into a single, larger mortgage, so the trade-offs are worth discussing with an adviser.
Is a second charge arrear treated the same as a main mortgage arrear?
Both are secured against your home and can put it at risk, and both stay on your credit file for 6 years from when recorded. A lender assessing a new mortgage is likely to consider both, though the second charge lender manages its own arrears process separately.
What if I cannot afford either loan?
Speak to both lenders as early as possible and get free advice from MoneyHelper, StepChange or National Debtline. Both loans being secured on your home means falling behind on either one matters, so do not focus on just one and ignore the other.