Credit cards can be beneficial when used well, but they can also become difficult to manage when balances aren’t cleared each month. Interest can accumulate quickly, minimum payments may not reduce the amounts owed, and this type of mounting debt is a major concern for many UK households.
Characters from Bank of England The bank expects credit card balances in the UK to reach £78.4 billion in January 2026, up from £72.7 billion the previous year. The Bank of England’s Money and Credit April 2026 release also showed net borrowing by credit cards of £0.8 billion in April, with an effective interest rate of 21.20% on interest-charging credit cards.
This raises an important question for some homeowners: Could the equity in their homes help them better control debt? Where does a second mortgage fit into this equation?
What is a second mortgage?
A second mortgage is a separate loan secured by your home. It is located behind your primary mortgage, meaning your first mortgage remains in place.
This may be important if you’re using a fixed rate that you want to keep, or if leaving your current mortgage means paying early repayment fees. Instead of replacing your entire mortgage, a second-fee mortgage allows you to borrow an additional amount against the equity in your home.
How to help with credit card debt
A common use of a second mortgage is debt consolidation. This means bringing multiple debts together into one loan.
For example, a homeowner may have balances across a number of credit cards, as well as a personal loan or overdraft. Each debt may have a different rate, repayment date, and minimum payment. This can make planning more difficult, even before interest is taken into account.
In the right scenario, a second mortgage can be used to liquidate those unsecured debts and replace them with a single monthly payment. This may reduce the monthly cost and make the family budget easier.
But it is important to understand what is changing. A credit card is an unsecured debt, while a second mortgage is secured against your home. This gives the lender more security, but also increases the risk to the borrower if payments are missed.
Lower monthly payments don’t always mean a lower overall cost
Debt consolidation can make sense when it gives the borrower a clear plan for repaying what they owe. But it should not be seen as a simple solution.
If the premiums are spread out over a longer period, the monthly premium may be lower, but the total amount paid over time may be higher. There may also be fees to consider, such as broker fees, lender fees, appraisal costs or legal costs.
This is why advice is important. A qualified advisor should compare options, including keeping debt in place, using a personal loan, considering a balance transfer, remortgaging, or taking out a second mortgage.
The correct answer will depend on income, expenses, credit history, mortgage rate, loan size, property value, and how long the borrower expects to stay.
When it might be worth considering a second mortgage
It may be worth considering a second mortgage if you own your home, have enough equity, want to keep your existing mortgage, and need a structured way to pay off higher-cost debt.
It may also be worth it if a remortgage results in you losing out on a good rate or paying a fee to leave your current deal.
However, this should only be considered if the new annuities are affordable now and are likely to remain affordable in the future. It should also come with a clear plan to avoid building up credit card balances again, as consolidating debt without changing spending habits can make the problem worse, not better.
A practical option, but not for everyone
Credit card debt can be stressful, especially when balances stop dropping or when interest takes up a significant portion of each payment. For some homeowners, using a second mortgage to consolidate debt can provide structure and breathing room, but it’s important to note that this isn’t a solution for everyone.
The key is to get advice early, understand the full cost, and make sure any solution fits your long-term budget. If used properly, a second mortgage can help some homeowners get high-cost credit card debt under control while maintaining their primary mortgage.
If you are considering releasing equity from your home, it makes sense to speak to a qualified mortgage advisor sooner rather than later to help you evaluate your options and whether a second charge is right for your current and future circumstances.
Think carefully before securing other debts on your home. Your home may be repossessed if you do not make payments on your mortgage or other debt secured on it.
Lisa Moscroft is Head of Loans at Norton Financial
