New research from Together, finds that a fifth (20%) of UK homeowners are planning to move this year, and one in ten (9%) state that cost of living pressures is the reason they’ll be staying put, but they will invest their finances into making home renovations.
There’s still a significant cohort of homeowners, 43%, who are completely unaware that they could release equity in their homes by taking a second charge mortgage to fund renovation costs or assist with debt, according to the research.
Together’s research also found a further 19% of homeowners are open to second charge mortgages this year to help with existing debt and loan consolidation.
James Briggs, head of personal finance intermediary sales at Together, said: “A second charge mortgage can offer a cost-effective route for homeowners needing to raise money for home improvement plans, when compared to remortgaging.
“This gives homeowners the option to release the equity in their property that they need for improvements, while keeping what may be a favourable, existing mortgage rate.
“However, as second-charge mortgages are not widely available through high street lenders, it’s critical that people discuss their circumstances with a professional mortgage broker to understand how they can work as a viable option – be it for renovation plans or to help with debt consolidation this year.”
Second charge mortgages run alongside current mortgages and allow borrowers to use their property as security against a loan.
By using equity built up in the property, this can be leveraged to borrow money without remortgaging and interest rates tend to be lower than what you would be charged on unsecured loans.
These mortgages also mean borrowers avoid penalties such as Early Repayment Charges (ERCs) which may apply if remortgaging out of an existing fixed rate arrangement early.
Research commissioned by Together and conducted by Opinium research, January 2023 among 2,000 UK adults, and is weighted to be nationally representative.
Content provided by Together Money