Loans Warehouse said debt consolidation is now the most consistent driver of activity, with cost-of-living pressures pushing borrowers to reduce monthly outgoings without affecting existing first charge mortgage deals

Loans Warehouse has said growth in the second charge mortgage market is shifting away from demand driven by interest rate pressures towards more structural factors.

The broker said earlier growth had been fuelled by borrowers trapped on long-term fixed rates during the rate shock of 2023 and early 2024, but this trend is now beginning to ease as the Bank of England base rate stabilises.

Loans Warehouse said debt consolidation is now the most consistent driver of activity, with cost-of-living pressures pushing borrowers to reduce monthly outgoings without affecting existing first charge mortgage deals.

The firm further said that borrower behaviour is also contributing, with customers increasingly opting for product transfers before returning within 12–24 months to raise additional capital, where second charge mortgages can offer a more suitable solution.

Loans Warehouse also pointed to increased awareness of second charge products, supported by mainstream platforms such as ClearScore and activity from broker networks including Mortgage Advice Bureau and Pivotal Growth, as well as new entrants such as Admiral.

The broker highlighted continued market development, including Intelligent Lending acquiring TotallyMoney, as evidence of the growing role of second charge lending within wider consumer credit ecosystems.

Matt Tristram, co-founder at Loans Warehouse, said: While long-term fixed rates undoubtedly drove activity in recent years, that ‘gift’ to the second charge market is coming to an end.

He added: What we’re seeing now is a more sustainable and arguably healthier set of drivers, rooted in real consumer need, greater awareness, and smarter financial planning.