FREQUENTLY ASKED QUESTIONS

What is a second charge mortgage?

A second charge mortgage, also known as a ’secured loan’ or 'second mortgage' allows you to borrow money, whilst leaving your existing mortgage in place. A second charge mortgage requires you to provide your home as security. This means we take a legal charge over your property, in the same way a mortgage provider does. This will be removed once the loan is fully repaid. 

When you take a second charge mortgage, you still own your property. We are a responsible lender and want to make sure you can afford the repayments on your second charge mortgage, but this security means, as a last resort, should you be unable to repay the loan we would repossess your property to recover our loss.

Borrowing money is a serious matter. You need to think carefully about whether you can afford the payments over the full term of the loan (not just during any introductory period when you may pay a lower rate of interest). 

How does Shawbrook choose and vet their second charge mortgage brokers?

All our second charge mortgages are arranged through independent brokers. 

We only work with brokers who:

  • Have full Financial Conduct Authority (FCA) permission for advising, arranging and bringing about regulated mortgage activities, credit broking debt counselling, debt adjusting, consumer BTL advising and arranging. (Please note the brokers permissions are determined by the business they write and as such not all brokers will have the same) and are active on the Data Protection register
  • Satisfy our strict broker requirements (we check that the brokers we use are financially sound, and we check their references)

What are the minimum and maximum amounts that I can borrow with a second charge mortgage?

The minimum you can borrow is £3,000.

The maximum you can borrow is £1million.

How long can I have to pay back the second charge mortgage?

The minimum loan term is three years.

The maximum loan term is 25 years.

Is there a minimum property value that you need for a second charge mortgage?

Yes, the minimum property value is £100,000.

What percentage of the property's value will you lend against?

We will consider lending up to 95% Loan-to-Value, depending on your requirements and your situation.

Can I settle my second charge mortgage early?

You can settle your second charge mortgage at any time.  

Please call our customer enquiry line on 0345 650 6287 to request a settlement figure. 

The settlement figure will include a discharge fee of £120 for England and Wales and £180 for Scotland. This fee pays for a solicitor to remove our legal charge on your home, and it’s mentioned in your mortgage deed.

Your mortgage deed includes early repayment illustrations:

  • A quarter of the way through the term of the second charge mortgage
  • Halfway through the term
  • Three quarters of the way through the term

Please note that we have to make assumptions when we prepare these illustrations, these assumptions include:

  • A single rate of interest for the whole loan term (although the rate may actually change over the term of your loan)
  • You have paid all your loan payments on time

Will each of my second charge mortgage payments go towards the capital as well as the interest?

Your second charge mortgage is a capital and interest loan, therefore each monthly payment covers the monthly interest on the loan and a proportion towards reducing the loan itself. This means that each monthly payment reduces the capital amount that you owe (your loan balance). So your loan balance reduces over the term of the loan, and is repaid at the end of the loan term.

This assumes that you don’t miss any payments during the term of your loan.

Can I make overpayments to my second charge mortgage?

Yes, you can overpay your loan with any amount, as often as you like and at any time during the term of your loan, free of charge. Your monthly payment will not change, but the term of your loan will reduce accordingly.

You should read the terms of your mortgage illustration very carefully before you sign the mortgage deed. Ask your broker to explain any terms or points that you do not understand.

Who do I contact if I have questions about my second charge mortgage?

Our customer services team can help with any questions you may have. You can call them on 0345 650 6287 (8am to 8pm Monday to Thursday, 8am to 6pm Friday and 9am to 2pm Saturday, excluding Bank Holidays).

Who do I contact if I have questions about my second charge mortgage?

Our customer services team can help with any questions you may have. You can call them on 0345 650 6287 (8am to 8pm Monday to Thursday, 8am to 6pm Friday and 9am to 2pm Saturday, excluding Bank Holidays).

What if I can’t make a payment to my existing second charge mortgage?

We are a responsible lender, and we will always deal with you honestly and sympathetically. Please tell us immediately if you can't afford the payments on your loan. If you can tell us before you miss any payments, we are much more likely to be able to help you.

You can contact us on 0345 650 6287 (8am to 8pm Monday to Thursday, 8am to 6pm Friday and 9am to 2pm Saturday, excluding Bank Holidays).

If you fail to meet any of your repayments as required under the terms of your loan, you will incur reasonable charges and/or fees. These fees will be added to the amount that you owe. You can find details of these fees in your mortgage deed.

What can I do to make sure that my second charge mortgage application is processed smoothly?

You should ensure that all the details on your application are accurate.

We rely on what you tell us in the loan application, and any details that turn out to be wrong will delay your application.

If your circumstances change after you’ve filled in your application, you must tell your broker immediately.

Questions you may have on remortgaging your property

What does a Deed of Postponement application involve?

  • You will need to pay an administration fee of £95
    The fee covers the administrative costs we incur when managing your application. This fee is confirmed in the Administration Charges document sent to you when you initially applied for your loan with us.
  • We will need full details of your new mortgage
    We will need a certified copy of your new mortgage offer letter, confirming the amount of the mortgage, the term and the monthly repayment amount. If your mortgage repayment will increase, we will need to see proof of your income to ensure that you will be able to meet your increased monthly outgoings.
  • If your mortgage provider will not provide you with a mortgage offer until they get agreement to the deed of postponement, we will accept a letter addressed to Shawbrook, directly from your mortgage lender
The letter from your mortgage provider should confirm the following details:
  1. Total amount of borrowing
  2. Mortgage term
  3. Current property valuation and the date the inspection was completed
  4. Monthly repayment amount

We cannot accept a Key Facts Illustration, as this is not a final mortgage offer.

  • We will need to know the current valuation of your property
    This will tell us whether there will be enough equity in your home to satisfy our current lending requirements. You may need to repay some of your loan balance if the re-mortgage will reduce the level of equity left in your property by too much
  • Payment of our solicitor fee of £75 + VAT 
    As a Deed of Postponement is a legal document, if we can approve your application our solicitors will then need to review it to make sure it is suitable for our second charge mortgage purposes

How can I pay these fees? Are they refundable if you don’t approve my application?
The administration fee is payable at the start of the application. As this fee is payable to cover the cost of dealing with your application, these fees are non-refundable whether the matter is approved, declined, or cancelled once we have assessed the application.

You can pay the solicitor fee either at the start of the application or, if you would prefer, once we have confirmed that we are agreeable in principle to the Deed of Postponement. If you pay your solicitor fee at the start of the application, it can be refunded up until the point our solicitors are instructed to review the matter.

You can call us on 0345 650 6287 (8am to 8pm Monday to Thursday, 8am to 6pm Friday and 9am to 2pm Saturday, excluding Bank Holidays) to make a debit card payment, or alternatively send a cheque payable to Shawbrook Bank Ltd to our Customer Services Team.

How long will you take to give me a decision?
Once we receive all of the information we need from you we will complete an initial review of your application. We do reserve the right to request any additional information necessary to allow us to make an informed decision on your application.

From the date all information is received, we will aim to return the executed Deed of Postponement to your lender (or their solicitors) within six working days.

Is there a chance you will decline my application?
As with any application, there is unfortunately a chance that your request will not meet with our requirements, in which case we will have no option but to decline your application.

As a personal and pragmatic bank, we will however take a common-sense approach and look at the individual circumstances of your application to see if there is a way we can accommodate your request. For example, if your application has been declined on the basis that there would not be enough equity left in the property, we could give you the option of repaying a proportion of your loan to bring down the loan balance and bring the equity levels in line with our requirements.

In the event your application is declined, this will impact upon your remortgage application and you will need to speak with your new mortgage lender as soon as possible.

Can I move house and keep my Shawbrook second charge mortgage?

If you are moving house, it would be great if you could take us with you. This request is subject to application and approval as well as consent from your new mortgage provider to the registration of our second charge against your property.

If the value of the property you are moving to is lower than the value of your current premises, or if the amount you are borrowing is higher than on your current property, we may need you to repay some of your loan to meet with our requirements.

In this instance speak to the broker who arranged your existing loan with us and they can get your application underway. If you are unsure who your original broker was, or you would rather speak with us about your requirements, please call us on 0345 600 7681 (8am to 8pm Monday to Thursday, 8am to 6pm Friday and 9am to 2pm Saturday, excluding Bank Holidays).

Can I take out another second charge mortgage with another lender?

If you want to take out another second charge mortgage against your home with another lender, you will need to redeem your existing loan with Shawbrook so that your new lender can take a second charge behind your mortgage lender. 

When we register the second charge mortgage against your home, we also register a restriction that prevents any other subsequent charges being registered against your property without our consent. This request is subject to application and review.

There are a number of things we will consider when reviewing your application, such as your account conduct, the total level of lending against your home and total debt affordability. If your application does not meet with our criteria, we will not be able to approve your application.

What does this application involve?

  • You will need to pay an administration fee of £55
    This covers the administrative costs we incur when managing your application.
  • We will need full details of the proposed new loan
    On application, we will confirm the requirements from you which will be needed to complete our review. Please note, your new lender may require a subsequent change questionnaire to be completed which will confirm the performance of your mortgage.

    We will only complete this if you have given us permission. There is an additional administration fee of £50 for this service.

How can I pay these fees? Are they refundable if you don’t approve my application?

The administration fee is payable at the start of the application. As this fee is payable to cover the cost of dealing with your application, these fees are non-refundable whether the matter is approved, declined, or cancelled once we have assessed the application.

You can call us on 0345 650 6287 (8am to 8pm Monday to Thursday, 8am to 6pm Friday and 9am to 2pm Saturday, excluding Bank Holidays). To make a debit card payment, or alternatively send a cheque payable to Shawbrook Bank Ltd to our Customer Services Team.

How will Shawbrook treat me as a second charge mortgage customer?

Customers are at the heart of our business, and it is our priority to offer the best outcome possible for your circumstances. Our team and our brokers, have experience of all kinds of personal lending.

We are a responsible lender, and we will check that you can afford the loan before we agree to it. This will include a detailed review of your income and expenditure.

We promise that we will:

  • Act fairly and reasonably in our dealings with you
  • Help you understand the financial implications of your second charge mortgage
  • Provide you with a high quality service

What will the second charge mortgage broker do for me?

Your mortgage adviser will go through a fact finding process with you. This is to understand your financial needs now and in the future and they will also discuss your current income and expenditure, along with any changes that you may foresee. They will then research and evidence the market, after which they will make a recommendation as to which product would be best suited to your circumstances.

You should ask for an explanation if you don’t understand any part of your mortgage illustration, including the terms and conditions.

If, after talking to your broker you are still in any doubt, you should seek independent legal and/or financial advice.

How much can I borrow on a second charge mortgage as a percentage of my property's value?

Currently our maximum Loan-to-Value is 95%. 

The amount that we can lend to you will depend on several things, including;

  • The value and the saleability of your property
  • Your income and any other credit and loan commitments that you have

Your credit history and how long you have lived in the property

I am self-employed - can I get a second charge mortgage from you?

Yes, we do lend to self-employed people as long as they have been self-employed for at least six months and can provide an Accountant’s certificate from a qualified Accountant acceptable to Shawbrook. This is to confirm trading figures to date and a projection for the remaining 6 months. For self-employed people with more than 12 months history, we would require one of the following as proof of income:

  • An SA302 (HM Revenue and Custom's calculation of your tax)
  • An accountant's certificate or
  • Pay slips and two months’ bank statements (limited companies only)

Is the interest rate on my second charge mortgage a variable rate?

  • Your second charge mortgage will depend on the product in which you have taken, Shawbrook have a range of products available from variable to 3 and 5 years fixed rate products along with a Base Rate Tracker product. If you have been advised to take a variable interest rate then this will track the Bank of England base rate or the Shawbrook variable rate. These rates can go up or down 
  • Your second charge mortgage may have a fixed interest rate for an introductory period, but once this introductory period is over (typically three years), the loan goes onto a variable interest rate
  • We may vary the rate of interest from time to time to take account of, in a reasonable and proportionate way;
  • Any change in the Royal Bank of Scotland Plc. base rate or Bank of England base rate, dependent on which Shawbrook product has been selected
  • Any change in the costs of funds we use in our lending business (or if we reasonably expect that a change in funding costs is about to occur)
  • A change in the value of our security because of the way in which the property is being used or occupied
  • To take account of a change in law, decisions, determinations or guidance of any regulatory authority that regulates our lending business, or any codes of practice with which we intend to comply

I am experiencing financial difficulty. Where can I get help and advice?

Please visit our Financial Difficulty page where we can point you in the direction of organisations who can provide free help and advice.

Can I extend my existing second charge mortgage?

We may be able to increase the amount of your loan (we call it further borrowing), please contact the internal sales team on 0345 600 7681.

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