Second Charge Bridging Loans UK: When They Make Sense

What is a second charge bridging loan?

A second charge bridging loan sits behind your existing mortgage (the first charge) and uses the equity in your property as security. It lets you raise additional funds without remortgaging or disturbing your existing mortgage deal.

This is particularly useful if you're on an attractive fixed-rate mortgage and don't want to trigger early repayment charges by remortgaging.

When second charge bridging makes sense

• Preserving a good mortgage rate: Your existing deal has years left to run at a low rate
• Avoiding early repayment charges: Remortgaging would trigger significant ERCs
• Speed: You need funds quickly and a full remortgage would take too long
• Raising capital for a deposit: Using equity in your current home to fund a purchase deposit
• Business purposes: Raising capital for business use against residential property equity

How it works

The second charge lender assesses the equity available in your property after accounting for the first charge mortgage. For example, if your home is worth £400,000 and your mortgage is £250,000, you have £150,000 of equity. A second charge lender might advance up to 70–75% combined LTV, meaning up to £50,000.

Rates on second charge bridging are typically higher than first charge (0.6–1.2% monthly) because the lender is second in line if the property is sold.

Risks to understand

As with all secured lending, your property is at risk if you can't repay. The second charge lender has the right to force a sale, though they'd need to account for the first charge mortgage first.

Additionally, your first charge mortgage lender must give consent for a second charge to be placed on the property. Most lenders will consent, but it adds a step to the process.

Getting a second charge bridge

A specialist broker can assess whether a second charge bridge or a remortgage offers better value in your specific situation. Get matched through Nesto for free.