The Finance & Leasing Association (FLA), reported second charge mortgage business volumes rose by an impressive 24% in January, highlighting the sector’s growing importance in helping clients access capital when traditional first charge lending doesn’t meet their needs.
Whether it’s for debt consolidation, home improvements, or accommodating complex income profiles, second charge mortgages continue to offer a flexible and essential solution for a wide range of borrowing scenarios.
I’m delighted to be joined by a panel of leading lenders from the second charge mortgage market to explore the key trends shaping the sector, the challenges, and opportunities ahead, and how this dynamic area of the lending continues to support brokers and their clients in an ever evolving financial landscape.
The Panel
David Coleman, Head of Sales at Positive Lending
Pauline Rylands, Head of Specialist Distribution Residential Mortgages & Second at West One
Henry Vaughan, VP of Growth at Selina Finance
Tom Whitney, Intermediaries Director at Interbridge Mortgages
DC – How would you describe the current state of the second charge mortgage market, and what key trends or challenges are shaping it in 2025?
TW – The second charge mortgage market is thriving in 2025, driven by homeowners looking for flexible financing without disturbing their low first-charge rates. Affordability remains a key challenge due to sustained cost-of-living pressures, but demand is high as borrowers seek alternatives to remortgaging. Lenders like ourselves at Interbridge Mortgages who prioritise speed, transparency, and a commitment to customer-centric services will stand out in an increasingly competitive
landscape.
PR – Official data from the Bank of England and the FLA shows that the second charge market has expanded by nearly a third since the start of 2020 and we have seen a really positive start to 2025. However, the landscape in 2025 remains complex, with refinancing pressures and mixed expectations about base rate changes. Households still face refinancing pressures with the cost of living increases continuing to act as a barrier to improving their financial positions. We have a high percentage of fixed rate mortgage holders, around 37%, who haven’t refinanced since rates began increasing in late 2021 and by 2027 around 50% of mortgage accounts will refinance onto high rates putting further pressures on disposable income. As well as this, the product transfer market is expected to increase by 13% and whilst this is a great option for customers whose circumstances may have changed, they don’t include extra borrowing and this is where a second charge is a great way for customers to unlock the equity in their property to mitigate the cost of these increases.
HV – The second charge market is evolving fast – and brokers are at the heart of that change. Rising interest rates have made traditional remortgaging less attractive for many homeowners, which is why flexible solutions like second charges are gaining serious ground. We’ve seen a real shift in visibility. This is no longer a niche product – second charges are becoming a mainstream part of the mortgage toolkit. Recent data from the FLA shows a 17% rise in new agreements and a 28% increase in second charge lending compared to pre-pandemic levels. At Selina, we’ve seen significant growth in both volume and broker engagement, which tells us one thing: demand is real, and it’s growing.
That said, challenges remain. Consumer awareness is still low, and many brokers tell us they don’t feel confident offering second charges. That’s why we’re heavily invested in broker education, better tools, and streamlined processes – to help more brokers unlock the potential of this market. 2025 needs to be the year second charges go truly mainstream. And that’s only possible through collaboration – between lenders, networks, tech platforms, and regulators.
DC – How are lenders innovating their product offerings to meet changing consumer needs, and what new developments can we expect in the near future?
TW – Lenders are evolving with more tailored products to meet customer demand, including flexible repayment structures and criteria-driven underwriting that considers real-life affordability. We expect to see the integration of AI into the processing, with digital-first processes, and even green lending initiatives, with the aim to make second charge mortgages more accessible, efficient, and sustainable. This expansion of offerings can help attract new customer segments who may not have historically considered second charge mortgages, which can help expand and grow the market.
PR – It’s been great to see new entrants into the second charge space and this in itself has forced all lenders to reconsider their proposition and product offerings. Due to affordability continuing to be a big issue for many customers, we have focused on this by increasing our maximum loan term to 40 years along with the amount of extra income a borrower can use for affordability where this is proven to be regular and consistent.
Not having a minimum credit score for any of our products, means we take a very individual approach to our underwriting considering each deal and the customers circumstances when making a lending decision. We totally understand that speed is important to our broker partners and their customers and the removal of our application form has supported this, Expect to see more changes over the next few months in respect of our criteria, products and technology.
HV – At Selina, we believe innovation starts with the broker experience. If we can make it easier for brokers to place second charge business – by giving them the right tools, the right support, and the right product – we unlock value for everyone. That’s why we’ve invested heavily in building a best-in-class broker portal, seamlessly integrated with key CRM systems, and brought to the UK flexible products like our HELOC – designed to meet the needs of today’s borrowers. We’ve also prioritised speed, helping brokers get more clients approved and funded faster than ever. A big part of that has been automating key underwriting tasks to streamline decision-making. We recently hit a major milestone: fully underwritten cases completed in as little as 15 minutes – a testament to the power of great talent, smart tech paired and a broker-first mindset.
But it’s not just about tech. We’ve also doubled down on broker relationships – staying close to the people who use our products every day, listening to their feedback, and iterating constantly to improve. For us, innovation means keeping brokers in the conversation, tailoring our offering to support how they speak to customers, and helping them say “yes” to more clients with confidence. That’s how we drive better outcomes across the board – and we’re proud to say this approach has helped us hit record numbers in recent months. As we look ahead, you’ll see us continuing to push on smart digital tools, open banking integrations, and even faster processing. But at the core, it’s all about enabling brokers to thrive in a market that’s changing fast – and ensuring second charges become a go-to solution, not a last resort.
DC – Do you think there is enough awareness among brokers and borrowers about the benefits of second charge loans, and if not, what more should be done to improve education and accessibility?
TW – Awareness is improving, but there’s more to do. Many brokers still see second charge lending as a niche rather than a mainstream solution. We’re committed to proactive education through CPD-accredited training, tech-driven tools, and real-time support, ensuring brokers confidently position second charge mortgages as a valuable financial solution for their clients.
PR – Simply put, no. I’ve come across many brokers who are still surprised to learn exactly how flexible a second charge can be in respect of affordability and loan purpose e.g. it can support borrowers who have only been trading for 12 months. I’ve also come across many brokers who aren’t allowed to recommend on debt consolidation cases by their network and this is where specialist brokers come into their own. Second charges are no longer a last resort for a customer. Many have also said that they don’t have any clients on their books for whom a second charge would be appropriate believing that second charges sit in the sub-prime and bad credit category. There is an argument that today, second charge loans should be considered mainstream products and a mainstay of any broker’s armoury. The implementation of the Mortgage Credit Directive was a very positive step towards second charges being accepted as a good outcome for customers, but how many times have brokers been reminded of this since its implementation despite the second charge proposition evolving significantly in the last 9 years. The FCA along with clubs and networks should collaborate in reducing the concerns around second charges. This in turn will improve how many brokers discuss second charges ensuring better customer outcomes.
HV – We’re making progress, but the awareness gap is still the biggest challenge we face as an industry. Too often, second charges aren’t even part of the conversation. And that usually comes down to confidence – many brokers either haven’t been trained or don’t feel they have the tools to offer second charges in the same way they do first charge products. At Selina, we’ve made it a priority to change that. Over the past year, we’ve hosted broker roundtables, CPD events, webinars, and in-branch sessions – designed not just to educate, but to empower. We’re also partnering with networks, clubs, and platforms to embed second charge education into the day-to-day broker experience.
Looking at markets like the US, where Second Charges and HELOCs are a $250Bn market, it’s clear how much room there is for growth in the UK. There, second charge-style lending is mainstream – used for everything from renovations to school fees – and brokers are confident positioning them as smart financial tools. There’s no reason we can’t reach that level here. But real change will take the whole industry. We need more lenders pushing for visibility, more networks championing the product, and more brokers asking the right questions. We also need to ensure regulators stay engaged with how the market is evolving and update expectations to reflect a more dynamic lending environment.
DC – Looking ahead, what do you predict for the second charge market over the next 12-24 months? Are there any potential risks or opportunities that brokers and lenders should prepare for?
TW – The next 12-24 months will see sustained growth in my view, with more borrowers turning to second charge mortgages amid base rate uncertainty. Opportunities lie in lenders who simplify the journey, enhance speed-to-offer, and deliver market-leading service. I strongly believe that those who stay agile and keep the customer at the heart of their strategy will Thrive.
PR – Second charges will continue to see higher growth over the next 12-18 months as borrowers look to improve their surplus income due to the continuing increase in the cost of living causing financial strain for borrowers. If we see a decrease in interest rates, we will see confidence grow in the mortgage market and certainly the return of more aspirational lending such as home improvements or business expansion. Lenders will also have to continue to improve their proposition, product offering and systems to cope with the demand.
HV – The opportunity in the next 12–24 months is huge – especially for brokers. As high interest rates persist and affordability continues to be squeezed, more homeowners will look for smart ways to access capital without disrupting their existing mortgage. Second charges are perfectly positioned to meet that need – often with significantly lower fees than unsecured options.
We predict continued growth across the board, with brokers who act early standing to benefit most. But we also see risks – particularly around inertia. If we don’t work together to improve consumer trust, streamline the experience, and raise standards, we risk losing momentum. That’s why at Selina, we’re doubling down on product innovation, broker enablement, and tech integration – so brokers can deliver second charges confidently, quickly, and compliantly.
Get in touch to see how our Second Charge team can support your harder to place and unusual applications. CLICK HERE to visit our SECOND CHARGE Mortgage Page