“Second charge lending allows borrowers to preserve the value of their existing mortgage while raising capital only for the amount they actually require, over an appropriate term,” Shilton said. “That simple shift in thinking has transformed the role of the second charge market.”
He also challenges the common tendency to compare headline interest rates alone. A second charge mortgage may carry a higher rate than a remortgage, but the full financial picture — including early repayment charges, product fees, legal and valuation costs, and the effect of refinancing the whole balance — can tell a very different story. “In many cases, what initially appears to have a higher cost on paper can deliver a better financial outcome once all costs are considered,” he said. “Clients deserve advice based on overall value, not simply the lowest advertised rate.”
On Consumer Duty, Shilton argues that exploring second charge options where appropriate is increasingly part of demonstrating that every reasonable lending solution has been considered before recommending a client replaces an existing mortgage.
He also points to the growing use of collaborative models between first charge advisers and specialist distributors as a positive development. No adviser, he notes, can be expected to hold expert knowledge across every niche lending area, and working with specialist packaging partners allows them to broaden the advice they offer without compromising client outcomes.
“That collaborative model benefits everyone,” Shilton said. “Clients receive broader advice. Advisers strengthen Consumer Duty outcomes. Lenders reach customers who genuinely fit their lending appetite.”