Second charge bridging loans

What is a second charge bridge?

A second charge bridging loan is a short-term facility secured against a property that already carries a first charge, usually a mortgage or an investment term loan. The new lender takes a second charge, which means it ranks behind the first charge for repayment if the property is ever sold or repossessed. The first charge stays exactly where it is, and the second charge sits behind it and draws on the equity the first charge does not use.

This is the key difference from a standard first charge bridging loan, where the bridge is the only security and replaces any existing mortgage. A second charge bridge is additive: it raises money on top of borrowing you already have. Because it ranks second, the lender carries more risk and prices for it, but for the borrower it is often quicker and cheaper than unwinding a first mortgage that is working well. We arrange these as unregulated commercial facilities; we do not lend.

When a second charge beats remortgaging

The instinct when you need to raise money is often to remortgage the whole property. A second charge bridge is the better route when disturbing the first charge would cost more than it raises, and there are three situations where that is usually the case.

• Keeping a cheap first charge in place: if your first mortgage is on a low fixed rate you could not repeat today, remortgaging the whole asset to release equity throws that rate away. A second charge leaves the first loan alone and borrows only the extra you need.
• Speed: a full remortgage runs on the first lender's timetable and can take weeks. A second charge bridge is built for pace and can complete in days when the exit and the security are clean.
• Capital raising for the next project: when the equity in one asset is the deposit on the next property purchase, a second charge releases it quickly so the money is ready when the opportunity is.

Early repayment charges on the first mortgage often settle the argument on their own: if redeeming the first loan early triggers a penalty, borrowing behind it with a second charge avoids that charge entirely. You can compare the all-in cost of each route against a full refinance at /calculators/bridge-cost/, and there is a fuller breakdown of short-term pricing at /blog/how-much-does-a-bridging-loan-cost/.

How lenders size a second charge bridging loan

A second charge lender sizes the advance on the equity behind the first charge, not on the whole value of the property. Starting from a valuation, the lender works out the combined loan to value: the outstanding first charge plus the new second charge, expressed against the property's value. Most lenders go to a combined loan to value commonly up to 70 to 75 percent, though the ceiling depends on the asset, the borrower and the exit.

As the worked example shows, a lender comfortable to 75 percent combined loan to value could advance up to 250,000 pounds behind a 500,000 pound first charge. The tighter the equity, the smaller the second charge. You can model the leverage at /calculators/loan-sizing/.

Consent from the first charge lender

Because a second charge sits behind an existing loan, the second charge lender almost always needs the first charge lender to acknowledge it. This is done through consent, and on larger deals through a deed of priority that spells out who ranks where and what each lender can do on a default. Consent is often the slowest moving part of a second charge, so we line it up early.

Some first charge lenders refuse second charges outright as a term of their loan, some allow them freely, and many consent case by case once they understand the second charge lender and the exit. Where consent is withheld, the practical answer is often to refinance the first charge onto a lender that permits second charges. We know which first charge lenders sit where.

What second charge bridging finance costs

A second charge bridging loan is priced above an equivalent first charge bridge, because the lender ranks behind another creditor. First charge bridging is priced around 0.95 percent per month indicatively, with the market commonly quoting rates between 0.55 and 1.25 percent per month depending on risk; a second charge typically sits at the upper end of that band or a little above. Expect an arrangement fee of around 1 to 2 percent of the loan, alongside valuation and legal costs, and check the early repayment charges before you commit. All figures are indicative and not an offer of credit.

There is real depth of funding here. The BDLA put the UK bridging and development loan book at a record 13.7 billion pounds as at Q3 2025, up 51.6 percent year on year, and recorded 11.7 billion pounds of applications in Q4 2025. We arrange this across the UK; local market data is at /locations/.

Second charge or mezzanine finance?

A second charge bridge and mezzanine finance both sit behind a senior loan and raise money against the equity above it, so they are easy to confuse. A second charge bridge is a short-dated loan against a standing asset, secured by a registered second charge and repaid from a refinance or sale. Mezzanine is layered behind development or investment senior debt as part of the capital stack, priced higher again and often carrying a profit share.

For a capital raise on a let or completed asset, a second charge bridge is usually cleaner and cheaper; for topping up the leverage on a scheme in build, mezzanine is the right layer. We set out the mezzanine route at /services/mezzanine-and-equity/, and the wider picture of short-term debt for investors at /blog/bridging-loans-for-commercial-and-investment-property/.

Exits, risks and how we arrange it

A second charge bridge is only as safe as its exit, and a clear exit strategy is what a lender underwrites to. The common exits are a refinance that repays both charges onto a single new loan, a sale, or repayment from the next deal the capital was raised for. The main risk is a stalled exit: because the loan ranks second, a delay is more expensive and less forgiving than on a first charge bridge, so build in headroom on the term. There is more on this at /blog/what-happens-when-a-bridging-loan-ends/.

Stabilisation Finance arranges commercial finance for businesses, investors and experienced borrowers, and this lending is unregulated. A second charge secured on a borrower's own home is a regulated mortgage contract overseen by the Financial Conduct Authority, and where a transaction would require FCA authorisation we refer it to a regulated firm. We are an arranger and introducer, not a lender. We structure the second charge around the equity and the exit, secure the first charge lender's consent, and place it with a funder whose appetite fits the deal.