Pepper Money reveals that 13% of people would consider a second charge mortgage to pay for education.

The lender’s latest research found that this number rises to 23% in London.

The data comes after VAT now chargeable on private school fees and university tuition fees is set to increase.

Elsewhere, more than half of people (51%) would consider a second charge for home improvements and 30% would consider this method of borrowing for debt consolidation.

Both of these are traditionally the two most common reasons for using that type of mortgage.

Alongside these, 19% said they would use it to provide a deposit for a family member to buy a home, 16% would use it to raise funds for a deposit on an additional property and 16% would do so to invest in a business.

Pepper Money second charge sales director Ryan McGarth says: “From 30 October 2024, school and boarding fees for school terms starting on or after 1 January 2025 are taxable at the standard VAT rate of 20%.”

“In addition, the government has announced that university tuition fees will increase for new student entries from 2025. The cost of education is increasing for many and, for parents looking for a way to meet this rising cost, a second charge mortgage could prove a good option for investing in their children’s future.”

“Second charges can be used for a wide variety of purposes. Traditionally known for home improvements, our research shows there’s a significant number of people who would consider releasing equity from their home to help finance the deposit on a property for their children or additional property and even business investment, as well as education.”