How a second charge works
A second charge sits behind the first mortgage on the title. If the property is sold, the first lender is repaid before the second, which is why second charge bridging is priced above first charge bridging and why lenders look at the combined borrowing.
Lenders measure the combined loan to value, adding the first mortgage balance and the new bridge together and comparing them with the property's value. The maximum combined figure is usually lower than for a first charge bridge.
Many first charge lenders must be told about, or consent to, a second charge. Some commercial and buy-to-let mortgages prohibit further borrowing without consent, so checking the existing mortgage terms is one of the first steps.
When a second charge makes sense
The main advantage is that the first mortgage stays in place. If it has a competitive fixed rate, or would incur early repayment charges to redeem, raising a second charge for a short period can cost less overall than replacing it.
Investors often use second charge bridging to raise a deposit or completion funds for another purchase, secured against property they already own. Developers sometimes use it to provide additional security or to fund costs while a larger facility is arranged.
If the existing mortgage is small, or ending soon, a first charge bridge that repays it may be simpler and cheaper. We compare both options so you can see the full cost of each.
Regulated second charges on your home
If the property is, or will be, lived in by you or a close family member, the loan is a regulated mortgage contract and comes with additional protections. We will tell you at the outset if that applies and how your case will be handled. On our panel, 7 lenders offer regulated second charge bridging, with rates from 0.69% a month (indicative).
For investment property, second charge bridging is usually not regulated. Either way, the lender will want a clear repayment plan and evidence that the combined borrowing is supported by the property's value.
Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
