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What is a second charge mortgage?

Second charge mortgages are personal loans against which you offer some form of security – in our case that security is your home. Second charge mortgages loans are usually taken out to make home improvements, like a conservatory or extension. Some people use them for big purchases such as a car or holiday of a lifetime, and often they are used to re-organise finances and consolidate debts*

Our loans cannot be used for things such as cosmetic surgery, solar panel installation and funding marital settlement.

*consolidating your debt may increase the amount you pay back overall and extend the repayment period. Repaying borrowing over a longer term may increase overall interest charges – but it can help keep your repayments at a more affordable level.

Repaying your second charge mortgage

We offer second charge mortgages on a repayment (sometimes called capital and interest) loan basis. Repayment loans work so that part of your monthly payment covers all of the interest due each month with the rest going towards paying off the original amount you borrowed.

With a repayment loan, you may notice that you don’t pay off as much as you thought you would for the first few years. At the start of a repayment loan, most of your monthly payment goes towards repaying the interest on your loan, with a small part paying the original amount borrowed. Over time though, as the loan balance reduces, this will change and you’ll start paying off an increasing amount of the original amount each month.

Settling your second charge mortgage

If you want to settle your second charge mortgage early, you must first request a settlement figure. You can do this by calling 0345 149 7750. Once you have your settlement figure our Customer Servicing team will be able to discuss with you the ways you can pay.

Things to consider

When taking out a second charge mortgage it’s important you make sure you can afford the repayments. If you’re unable to make your repayments your home could be repossessed, so please think carefully before taking out a loan secured against it.

A valuation of your property may be needed. If a valuation is needed, it must be done by a surveyor approved by Paragon Personal Finance. Your intermediary will communicate any costs you may need to pay for the valuation taking place, who should also confirm any other additional costs they may charge when arranging your loan.

There may also be additional costs you will need to be aware of as part of your loan. You can find our general fee tariff on our documents page. Information on other charges, such as early repayment charges, can be found in your mortgage illustration and terms and conditions. We will always tell you of any charges before they are applied to your loan.


Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it

Paragon Personal Finance is a trading style of Paragon Bank PLC and is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 5390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551.