MCI urges brokers to use second charges for low equity borrowers

  • 26/10/2020
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MCI urges brokers to use second charges for low equity borrowers
Brokers struggling to place remortgages for borrowers at 85 per cent loan to value (LTV) and above have been encouraged to consider second charge mortgages by MCI Mortgage Club and specialist brokerage Loans Warehouse.


Mel Spencer, head of MCI Mortgage Club, said there had been a decline in mortgages at high LTV tiers as lenders attempt to manage issues with service levels caused by high demand. 

Recent figures from Moneyfacts showed the total number of available mortgage products had dropped from 5,222 mortgages in March to 2,259 in October. 

The same data also revealed the number of mortgage deals above 85 per cent LTV had more than halved to 329. 

Spencer said: “The high loan-to-value market is very limited at present and there are very few products available to help those that require a 90 per cent product to move home, remortgage or borrow additional money for home improvements or extensions.  

“If products do become available then they don’t hang around for long and you will see that they are typically here for 48 hours, which can be known as a ‘flash sale’.  

She added: “High street lenders are slowly working towards full capacity and are still hitting a record number of applications due this pandemic.   

“We have not seen lenders come back into this market at strength and we need more support in the industry to service these clients that require a high loan-to-value mortgage.  

However, figures from the Finance & Leasing Association (FLA) found the second charge market had more than doubled from May to August this year and further growth is predicted for Q4.  

Matt Tristram, co-founder of Loans Warehouse, said: “Whilst some lenders have restricted product ranges on LTV, the biggest lenders in second charge lending continue to offer very competitive products right up to 100 per cent LTV. 

“With brokers struggling to find options for high LTV borrowers and a lack of early repayment charges (ERCs) on second charges can provide a valuable alternative for those looking to place such cases before the market fully recovers.” 


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