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By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 23rd March 2021*

If you’re looking into getting a second charge mortgage, you may be wondering how much you can borrow and how to understand repayment options using a second charge mortgage calculator.

We get lots of enquiries into second charge mortgage affordability calculators. The good news is that there are plenty of these tools available online, but keep in mind that they can only provide you with rough estimates. This article will shed light on how 2nd charge loans are calculated.

Included in this guide is…

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What is a second charge mortgage calculator?

A 2nd charge mortgage calculator is a useful tool to help you understand monthly repayments, interest paid, and length of term on your loan. They can be found on many lenders’ websites as well as other online financial hubs.

However, mortgage calculators will only give a rough idea of how much you can borrow and they’re not tailored to the customer’s needs and circumstances.

How is affordability calculated on a 2nd mortgage loan?

The size of the second charge loan will be based on the equity in your home; how much property you own outright against the percentage of the mortgage still owed on your home.

For example, if you buy a property for £250,000 and you have £150,000 left to pay on the mortgage, you could use the £100,000 equity to take out a second loan of a similar sum.

Although the amount you can borrow will be determined by and secured against your home’s equity, affordability will be calculated by factors including proof of income and loan repayment ability.

Calculate monthly repayments using a 2nd charge mortgage calculator

A 2nd charge loan calculator can help you find out how monthly repayments would be calculated on a second loan. You simply put the total sum of the loan you’d like to take out into the calculator as well as the term, or length of the loan and the estimated interest rate.

The calculator will then show you how much you will have to pay monthly by dividing the loan by the number of months in the repayment term.

How is interest calculated on a second charge mortgage?

The higher the value of the equity in your property, the more you’ll be able to borrow, but the rate of interest you get for your second mortgage will vary from provider to provider. It’ll depend on situational factors such as your credit rating and the length of your mortgage term.

A 2nd charge mortgage calculator can help you see how much total interest you will pay over the length of your loan’s term.

To do this, it calculates how much yearly or monthly interest you would have to pay with a particular interest rate, then multiplies this according to the length of your term. It’s worth shopping around with the help of a whole-of-market mortgage broker to make sure you get the best possible interest rate.

Get bespoke calculations from a 2nd charge mortgage expert today!

A second charge mortgage calculator can give you a good start on understanding the monthly repayment and total interest owed for a specific length of term. However, to understand the affordability of taking out a homeowner loan in your situation, you’ll need a few more specifics such as proof of income and credit rating.

The advisors we work with can provide you with bespoke calculations based on your personal profile and introduce you to the right 2nd charge mortgage.

An expert mortgage broker can also advise you on affordability and best interest rates. They can also save you time and any potential negative impact on your credit rating by taking you directly to providers who are the best match for your needs and circumstances.

If you have questions about second charge loans and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. We don’t charge a fee and there’s absolutely no obligation or marks to your credit rating.

Updated: 23rd March 2021
OnlineMortgageAdvisor 2021 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

Find out more about second charge mortgages

Second Charge Mortgages

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