Case Study: How a Second Charge Mortgage Helped a Business Owner Pay a Tax Bill Without Losing Their Low Mortgage Rate

At J Finance, we help homeowners access the funds they need while protecting their existing mortgage deals. For those facing large tax bills, a Second Charge Mortgage can be an effective way to raise funds without remortgaging—especially when they have a competitive mortgage rate they don’t want to lose.

Here’s how we helped a client use a Second Charge Mortgage to clear a tax bill while keeping their existing mortgage intact.

Client Profile

  • Name: Simon (Self-Employed Business Owner)

  • Situation: Needed £35,000 to pay an unexpected tax bill.

  • Challenge: His current mortgage had a low fixed rate (1.89%) and a high early repayment charge (ERC).

The Problem

Simon had been running a successful business for several years, but due to changes in his company’s cash flow and tax planning, he faced a £35,000 tax bill that needed to be paid quickly.

He initially considered remortgaging to raise the funds, but there were major downsides:

❌ Losing his low fixed-rate mortgage – His current rate was just 1.89%, significantly lower than today’s market rates.
❌ Paying an early repayment charge (ERC) – Exiting his current mortgage early would cost him nearly £12,000 in fees.
❌ Higher monthly repayments – Switching to a new mortgage at a higher rate would increase his overall borrowing costs.

Instead of remortgaging, Simon needed a way to borrow against his property without disturbing his main mortgage.

The Solution: A Second Charge Mortgage

After discussing his options with J Finance, we arranged a Second Charge Mortgage—a loan secured against his property in addition to his existing mortgage.

Second Charge Mortgage Details

  • Loan Amount: £35,000

  • LTV (Loan-to-Value): sub 60%

  • Interest Rate: Competitive fixed rate

  • Term: 10 years

  • Monthly Repayments: Fixed to provide stability

  • Early Repayment Flexibility: Ability to clear early with minimal penalties

By using a Second Charge Mortgage, Simon was able to access the funds he needed without touching his main mortgage—keeping his ultra-low rate intact and avoiding unnecessary early repayment charges.

The Result

✔️ Tax Bill Paid in Full – Simon cleared the £35,000 tax liability without financial stress.
✔️ Kept His 1.89% Mortgage Rate – No need to switch to a higher rate.
✔️ Avoided a £12,000 Early Repayment Charge – By leaving his main mortgage untouched.
✔️ Flexible Repayment Terms – The second charge loan allowed him to manage repayments effectively.
✔️ Quick Access to Funds – The loan was approved and funds released within 36 days, meeting his tax deadline.

How J Finance Helped

✅ Protected His Low Mortgage Rate – Ensured he didn’t lose his existing fixed deal.
✅ Saved Him from Unnecessary ERC Fees – Avoided an expensive early repayment charge.
✅ Arranged a Fast-Track Second Charge Loan – Secured approval and funds within 6 weeks.
✅ Provided a Competitive Rate & Repayment Flexibility – Ensured affordability without locking him into an unsuitable deal.

Could a Second Charge Mortgage Help You?

If you need to raise funds but don’t want to remortgage and lose your low interest rate, a Second Charge Mortgage could be the perfect solution.

At J Finance, we help homeowners access the capital they need while keeping their existing mortgage intact—whether it’s for a tax bill, home improvements, debt consolidation, or another financial need.

📞 Call us today for a free consultation.
📩 Book an appointment to discuss your options.

Unlock the equity in your home without sacrificing your great mortgage deal – talk to J Finance today.