Second charge bridging loans: capital out, first charge untouched.

What a second charge bridge is, and when it beats refinancing

A second charge bridging loan sits behind your existing mortgage on the same title. The first lender keeps its charge, its rate and its repayment profile; the new lender registers second and is repaid second if things go wrong. Everything about the product flows from that ranking.

The case for it is almost always the first charge you already have. A large share of landlord debt is still sitting on five-year fixes written at 2021 and 2022 pricing, rates with a 2 or a 3 in front of them that will not be seen again soon. Breaking one of those to capital raise via a buy-to-let remortgage triggers the early repayment charge, typically 3% to 5% of the balance, and reprices the entire loan at today’s rates. On a £250,000 first charge that can mean a five-figure ERC plus thousands a year in additional interest, all to release £100,000. A second charge raises the £100,000 and leaves the fix alone.

Speed is the other half of the argument. A full remortgage runs six to ten weeks; a second charge bridge completes in two to three, sometimes faster, because the underwriting is asset-and-exit rather than full term affordability. When the capital is needed for a completion date, the comparison is not close.

Combined LTV: how the loan is sized

Second charge lenders size against combined loan-to-value: existing first charge balance plus the new bridge, divided by current value, capped at typically 70% to 75% on residential investment security as of June 2026. The arithmetic on a £500,000 property:

As with all bridging, that is the gross figure: the arrangement fee of typically 2% and any retained interest come off it before funds reach you. The lower your existing LTV, the more a second charge can do; a property already mortgaged to 70% supports almost nothing behind it, and we will say so rather than waste your valuation fee.

First-lender consent, and the equitable charge route

Registering a legal second charge requires the first lender’s consent. The second charge lender applies for it as part of the legals, and most BTL first lenders grant it in one to three weeks where combined LTV sits within their policy. It is an administrative step, but a real one, and we chase it because it is the most common source of delay on these cases.

Where consent is refused, or the first lender’s service desk cannot turn it around inside your deadline, the fallback is an equitable charge: the lender takes a charge over your beneficial interest and registers a restriction at the Land Registry, without needing the first lender’s sign-off. The lender pool willing to lend equitably is smaller and the pricing carries a premium of roughly 0.1% to 0.25% per month over a legal second, because the lender’s enforcement position is weaker. It is a perfectly respectable structure used knowingly; it is a poor one to discover by accident in week four, which is why we establish the consent position with your first lender in week one.

Pricing: the subordination premium

As of June 2026, second charge bridging prices at 0.95% to 1.35% per month against 0.75% to 1.10% for first charges, with arrangement fees of typically 2%. The premium is the price of ranking second: on enforcement the first lender is made whole before the second lender recovers a pound, so the second charge lender’s effective security is only the equity between the first charge and the combined LTV cap. Thinner combined LTV, stronger exit and cleaner security move you toward the bottom of that range; equitable charges, heavier first charges and commercial security move you up it.

What landlords use second charge bridging for

• Deposit for the next purchase. Equity in one asset becomes the deposit on another, often alongside a first charge bridge or term mortgage on the new property. For repeat buyers, this is the standard recycling move when the portfolio has equity but no liquidity.
• Works on another asset. Funding a refurbishment on property B against the equity in property A, where property B is unmortgageable mid-works.
• Tax liabilities. A corporation tax or CGT bill landing before a sale completes. A second charge is dramatically cheaper than HMRC time-to-pay failure or a forced disposal.
• Business cash. Short-term working capital for a trading business secured against the landlord’s investment property rather than the business itself.

The risks, stated plainly

Two lenders on one title means two sets of covenants and a default cascade: default on either loan and both positions are in play, because the second lender’s enforcement triggers the first lender’s protections and vice versa. The combined debt service across both facilities must be survivable if the exit slips, and because the second charge carries the higher rate, extensions are expensive. The exit discipline is identical to any bridge, the loan is only as good as its repayment route, and the same scrutiny applies as on the bridging loans hub: a second charge without a dated, evidenced exit is not a facility, it is a problem on deferral.

Worked example: £100,000 raised without breaking a 2.39% fix

A landlord holds a £500,000 single-let with a £250,000 first charge fixed at 2.39% until late 2028, ERC currently 4%. She needs £100,000 in three weeks to complete the purchase of an adjacent flat. Two routes:

Combined LTV lands at 70% (£350,000 on £500,000), inside policy. Total second charge cost of roughly £11,900 over nine months against an immediate £10,000 ERC plus an ongoing repricing drag of several thousand a year, and the remortgage route does not hit the completion date anyway. The exit was the planned refinance of the newly purchased flat once let. At drawdown speed and a 2028 fix preserved, the second charge is not the clever option here, it is the only coherent one. Run your own figures through the bridging loan calculator, or send us the case.