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If I look back at how the second charge mortgage market performed in 2025, I’d say it finished the year in a far stronger place than it started.
We saw the introduction of new lenders, which is always healthy for any market. New entrants bring competition, they challenge existing players to sharpen their propositions, and ultimately that drives better outcomes for brokers and customers.
As volumes picked up in the second half of the year, we also saw the knock-on effect that competition brings – rates easing slightly, criteria becoming more flexible and product ranges broadening.
From where I sit, second charge lending is no longer a fringe solution. It’s a mature, regulated and increasingly well-understood part of the wider mortgage market.
The biggest challenge we still face isn’t consumer demand. That’s always been there. People need to raise capital – for home improvements, debt consolidation, business purposes or family reasons – and that need hasn’t changed. The real barrier remains education at broker level. Too often, the conversation with the customer stops once a remortgage or further advance doesn’t stack up.
Historically, capital raising has been framed as a two-option process: remortgage, or further advance. If neither works, the assumption has been that the door is closed. Second charge lending should be the third string to the bow but it’s still not always considered early enough in the advice process. Where brokers do make that shift, we see volumes rise very quickly.
There are two main reasons some brokers remain hesitant. The first is perception. More experienced advisers may still associate second charges with the pre-FCA days, when the market was very different. Back then, second charges were often linked to adverse credit, high rates and limited safeguards.
Since regulation came in during 2016, the market has changed beyond recognition. Today, second charge lending is closely aligned to first charge mortgages in terms of conduct, affordability and consumer protection.
The second reason is familiarity. Many brokers are exceptionally good at first charge lending and understandably prefer to stay in their comfort zone.
If everyone in an office does the same thing, it’s harder to step back and say: “Is there another option here?”
That’s where education and repetition matter and that’s why we spend so much time speaking directly to brokers.
When brokers come to us for the first time, support is key. Sometimes that’s a structured session with an entire firm, walking through when a second charge can help where a remortgage or further advance can’t.
Other times it’s a simple phone call about one case: “I’ve got this client – does this work?” Even when the answer is no, there’s almost always an educational piece that helps the adviser next time.
Affordability is a good example. Second charge affordability models are often more flexible than further advances, particularly where lenders cap loan sizes. Clients might have significant equity and strong income but a further advance simply won’t stretch far enough. That’s where second charges can really deliver.
In terms of usage, second charges are now used for the same legal purposes as first charges – provided it makes sense for the client. Everything is sense-checked through fact-finding and due diligence. It’s about long-term suitability, not just whether a loan can be done. If circumstances are about to change – maternity leave, reduced income, higher outgoings – those factors have to be considered. The product must work not just today but tomorrow.
Looking at lenders, the past 12 months have been particularly interesting. Established names like United Trust Bank, West One, Pepper, Together and others continue to set the standard.
But newer entrants such as Admiral and Interbridge have made a real impact, particularly around automation.
That’s where I see the market heading.
Historically, lenders competed on rate. I don’t think that’s the main battleground anymore. Speed, efficiency and customer journey are now the differentiators. We’re already seeing cases where fully automated processes allow fact-finding and completion within a week and sometimes faster. Compared to the old three-to-five-week timelines, that’s a game changer.
So what does 2026 look like? I expect continued growth, but not through rate wars. Lenders are focusing on streamlining systems, removing paper and improving broker experience. I also wouldn’t be surprised to see more lenders enter the market over the next couple of years, alongside expansion in product ranges such as higher loan-to-values, more buy-to-let second charge options and greater flexibility overall.
The second charge market has evolved. Regulation is embedded, technology is improving and broker understanding is growing.
As more advisers see it as a core part of capital-raising advice rather than a last resort, I think 2026 will be another strong year and not just for volumes but also for credibility across the wider mortgage sector.
