First Charge vs Second Charge Bridging Loans: What the Difference Means

What Is a Charge on a Bridging Loan?

A charge is a legal security interest registered against your property at HM Land Registry. It tells anyone reviewing the title which lenders have a claim on the property and in what order they get paid if the property is sold or repossessed.

Whoever registers first ranks first. The first-charge lender is paid in full from any sale proceeds before the second-charge lender sees a penny — and that priority is the practical difference between first and second charge bridging.

We find borrowers often think the choice is academic. It isn’t. The charge ranking drives your interest rate, your LTV cap, your consent requirements, and your exit options — every dimension of how the loan works.

First Charge Bridging Loans Explained

A first-charge bridging loan ranks senior on the security property. The bridging lender either lends against an unencumbered property, funds a purchase, or redeems any existing mortgage at drawdown so the bridge becomes the only registered charge.

First charge is the default for most bridging cases. We find around 80% of bridges we see are first-charge, because most borrowers either own the property outright, are buying it, or want the simpler structure for an auction or chain-break.

When First Charge Bridging Applies

Property purchases with bridging finance are first-charge by default — the bridge is the only loan on the property. Auction completions, chain-break purchases, and uninhabitable property buys all sit here.

If you already have a mortgage, taking a first-charge bridge means redeeming that mortgage at drawdown. The bridge funds both the redemption and whatever new purpose you need — typically the new property purchase.

First Charge Pricing and LTV Limits

First-charge bridges typically run 0.55–1.10% per month for unregulated cases and 0.85–1.10% for regulated. LTV up to 75% is widely available; some lenders push to 80% on strong cases.

We recommend treating 75% as your working assumption. Above that, lender appetite narrows quickly and pricing rises sharply.

Second Charge Bridging Loans Explained

A second-charge bridging loan sits behind your existing first-charge mortgage. The bridge takes a junior security position and is paid only after the first-charge lender is satisfied if the property is ever sold under enforcement.

Second charge is used where you want to release equity from a property without disturbing the existing mortgage. We find this matters most when the existing mortgage has terms you can’t easily replicate — a low fixed rate, a long tracker, or heavy early repayment charges.

When Second Charge Bridging Applies

Common second-charge use cases include funding a deposit on a new property, raising working capital against a portfolio property, paying for refurbishment works, or settling a tax bill secured against equity in your home.

If you’d otherwise need to remortgage and break a favourable rate, second-charge bridging can be cheaper overall — even at the higher monthly rate — because you preserve the underlying mortgage terms.

Second Charge Pricing and Risk Premium

Second-charge rates run 0.10–0.30% per month higher than equivalent first-charge pricing. The premium reflects the junior enforcement position — your bridging lender bears more recovery risk if values fall.

We find the premium is bigger on weaker cases. On a strong borrower with low CLTV and a credible exit, expect 0.15%/month uplift. On stretched cases, 0.30% or more.

First Charge vs Second Charge Bridging Loan Rates

On a £200,000 bridge over six months, the rate difference compounds quickly. At 0.85%/month first-charge versus 1.10%/month second-charge, you’re looking at roughly £3,000 extra interest over the term.

We find the rate gap narrows when CLTV is low and your borrower profile is strong. On a 50% CLTV second-charge bridge with clean credit and a cast-iron exit, some lenders price within 0.10%/month of their first-charge book.

Beyond the headline rate, second-charge cases sometimes carry slightly higher arrangement fees — typically 1.5–2% versus 1–2% on first charge. We recommend asking for total cost of credit at quote stage rather than comparing monthly rates alone.

Combined Loan-to-Value Limits on Second Charge Bridging

Combined loan-to-value, or CLTV, is the total of your first-charge mortgage balance plus your new second-charge bridge, expressed as a percentage of property value. It’s the figure that drives second-charge underwriting decisions.

Most second-charge bridging lenders cap CLTV at 65–75% of open market value. We find 70% is the most common limit; pushing to 75% requires a strong case and tightens lender choice.

Worked CLTV Example

Take a £500,000 property with a £250,000 first-charge mortgage. Existing LTV is 50%. At a 70% CLTV cap, the maximum second-charge bridge is £100,000 — bringing combined exposure to £350,000, or 70% of value.

If you need £150,000 and your lender’s cap is 70%, you’d need a property valuation of at least £571,000 — or to redeem some of the first-charge balance first.

How CLTV Affects Pricing

Lower CLTV means lower risk, which means lower rates. We find pricing tiers commonly at 50%, 60%, and 70% CLTV — moving up a tier typically adds 0.05–0.15%/month.

If you can structure your second-charge bridge below the next tier, the saving over a 12-month term can be material. We recommend asking your broker what the next CLTV tier looks like before committing.

Consent From Your First-Charge Lender for Second Charge Bridging

Most mortgage deeds prohibit further charges without first-charge lender consent. That means before any second-charge bridge can complete, your existing mortgage lender must agree in writing.

We find lender attitudes vary widely. Specialist BTL lenders typically grant consent within 5–10 working days. High street residential lenders can take 3–4 weeks and may decline outright on owner-occupied homes.

How to Request Consent

Your broker or solicitor writes to the first-charge lender with details of the second-charge facility, the lender, the amount, the term, and the purpose of funds. Most lenders charge a consent fee — typically £75 to £250.

We recommend submitting the consent request as early as possible in the bridge timeline. It’s the single most common cause of delay we see on second-charge cases.

When Consent Is Refused

Where the first-charge lender refuses consent, second-charge bridging is off the table on that property. Your alternatives are to remortgage onto a lender that allows second charges, or to take a first-charge bridge that redeems the existing mortgage.

Refusals are most common on owner-occupied residential mortgages. BTL and commercial lenders refuse less often but still vary by case.

When First Charge Bridging Is the Right Loan Choice

First charge is the right call where the property has no existing mortgage, you’re buying with bridging, or you want the lowest possible rate and don’t mind redeeming an existing mortgage.

We find first charge is also the practical choice on auction completions and chain-break purchases — both involve fresh money on a clean property, with no existing charge to navigate.

If the first-charge lender on your existing mortgage refuses second-charge consent, first charge becomes the only available route. The bridge redeems the existing mortgage as part of drawdown.

When Second Charge Bridging Is the Right Loan Choice

Second charge fits where your existing mortgage has terms worth preserving — a low fixed rate, a long tracker tied to legacy base rates, or heavy early repayment charges that would dwarf the bridge premium.

We’ve seen cases where the ERC alone exceeds the entire cost of a second-charge bridge over its term. On a five-year fix with 4% ERC remaining, redeeming early to take a first-charge bridge is rarely the right move.

Second charge is also the right call where you want to retain your mortgage relationship for future borrowing, or where the first-charge lender has indicated they won’t lend further on the property at remortgage.

Second-Charge Specialist Bridging Loan Lenders

Not every bridging lender accepts second-charge cases. We find roughly half the bridging market is first-charge only — the other half has dedicated second-charge desks with specific underwriters.

Active second-charge bridging lenders we work with include MT Finance, Glenhawk, Funding 365, and Streambank. Each has different CLTV limits, consent processes, and pricing tiers.

We recommend going via a specialist bridging broker on second-charge cases. The narrower lender panel means broker-distributed deals get materially better pricing than direct applications.

How Charge Type Affects Your Bridging Loan Exit

Your charge type changes how your exit works in practice. First-charge exits are clean — sale or refinance proceeds redeem one loan. Second-charge exits are more complex because two loans need to be addressed.

We find this matters most on refinance exits where the receiving lender must accept the existing first-charge mortgage staying in place. Not every lender will refinance only the second-charge balance.

Sale Exit on Second-Charge Bridges

On a sale exit, both charges redeem at completion. Your solicitor handles redemption statements from both lenders and pays each in priority order — first charge in full, second charge from any remaining proceeds.

The risk is property value. If the property sells for less than expected, the second-charge balance may not fully redeem. We recommend stress-testing your sale price assumption before committing to a second-charge bridge.

Refinance Exit on Second-Charge Bridges

If the receiving mortgage absorbs both charges, the exit looks like a standard refinance. If the receiving lender will only refinance the second charge, you need a niche product — possibilities are limited.

We recommend confirming the receiving lender’s approach to existing first-charge mortgages before drawing down a second-charge bridge. Refinance failure on a second-charge case is harder to fix than on first-charge.

First and Second Charge Bridging FAQs