Second Charge Bridging Loans

Require Second Charge Short Term Finance? Get market-leading Second Charge Bridging Loans from £50,000 to £25M, with rates from just 0.55% per month.

We specialise in raising bridging finance on residential and investment property transactions in the UK.

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Second Charge Bridging Loans

A Second Charge Bridging Loan is a short-term financing solution secured against a property that already has a mortgage. As the second charge, it sits behind the primary mortgage, meaning the first lender gets repaid first in case of a sale.

Ideal for property investors, homeowners, and businesses needing quick access to capital, these loans offer flexibility when traditional funding isn’t an option. Use our bridge loan calculator to get an instant quote and estimate the overall cost of your loan.

  • Market leading 2nd charge bridging loans from £50,000 to £25m.
  • Rates from 0.55% pm. Lower rates for £1 million+ loans
  • £99 valuation option for properties up to £1 million
  • Terms from 3 months to 3 years. LTVs up to 80% (can be more if other assets in the background).
  • Interest roll up options

Bridging Case Studies

Low Cost Drawdown Bridging Loan for Development Exit | Case Study
Low Cost Drawdown Bridging Loan for Development Exit
Area
Kent
Capital Raised
£900k
Date
February 2025
Commercial Bridging Loan to Refinance Hotel Before Sale
Commercial Bridging Loan to Refinance London Hotel Before Sale
Area
London
Capital Raised
£13.8m
Date
January 2025
Resolving Complex Debt Issues with a Bridging Loan | Case Study
Resolving Complex Debt Issues with a Bridging Loan
Area
Romford
Capital Raised
£135k
Date
November 2024

See All Bridging Case Studies

Why Our Customers Trust Us

With expert guidance, second charge bridging loans can provide an essential, versatile, and cost-effective solution to a wide range of property transactions.

Here are 3 reasons our clients trust our advice and service.

Market-Leading Rates

We provide access to market-leading rates for every client, thanks to our relationships with close to 100 bridging lenders.

bridging loans

Multi-Award-Winning Team

Our team of bridging advisers have over 40 years of experience and are qualified to the highest level. We're proud to have numerous customer service awards to our name.

bridging loans

Fully Independent

As an independent brokerage, we focus on your best interests when comparing finance: from costs and terms to speed of service.

Our Experts

Our dedicated bridging finance team are CeMAP qualified and have over 40 years of experience.

Meet The Team

Fergus Allen

Head of Bridging CeMAP

 

Mathew Phillips

Senior Finance Broker CeMAP

 

Paige Dumpleton

Finance Broker CeMAP

How We Work

1. Get a Customised Quote

Our bridging specialists will take a detailed look at your plan and provide a sense-check on whether it’s achievable, what the terms and cost estimates are, and if indeed bridging finance is the best route for you.

 

2. Secure A Decision in Principle

Within 24-48 hours, we should have your Decision in Principle secured from the lender. You can present this to estate agents and sellers to showcase your buying power. We can also speak to each party directly to strengthen your case.

3. Submit Your Application

When you’ve had your offer accepted, we’ll submit your application, and the valuation process and legal work can begin. We'll act as a mediator between all parties, making sure the deal is progressing as efficiently as possible and smoothing out any complexities along the way.

4. Finance Your Purchase

We will keep you updated and informed until you receive funds from the lender and your transaction is complete. And for any queries you have throughout the course of your loan, we’re always here to help.

Speak to a bridging specialist today

Make your property ambitions a reality and find out if bridging finance could work for you. We’ll guide you through the process and take care of the heavy lifting.

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Second Charge Bridging Loans

with Fergus Allen & Sam Hodgson

Last updated: 05/02/2025

What is a Second Charge Bridging Loan?

The "second charge" part means that an existing mortgage, or an additional loan, sits behind the second charge. So, for example, you already have a mortgage on your home, and you take out a bridging loan (to buy another property or make another purchase) that's also secured against your home, making it a 'second charge'. 

This means that your bridging loan will be second in line to be prepared if you default on your repayments and your house is sold to repay your debts - your first charge (your mortgage) will have priority to be repaid first, and then your bridging loan second.

Second charge bridging loans function almost identically to other types of bridge loans - they are primarily for allowing borrowers’ access to funds to make a property transaction before an existing property has sold - alongside many other uses. Second charge bridge loans can only be facilitated if enough equity remains in the property for borrowing purposes.

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What’s the Difference Between First Charge and Second Charge?

If you take out a bridge loan against a property that already has a mortgage, the loan will be designated as a "second charge" against the property – this shows the order in which lenders will be repaid first, with the mortgage taking priority as the "first charge".

The difference is simply the order of repayment and priority – this is what it means when a loan of any type is referred to as the first or second charge.

How Do Second Charge Bridging Loans Work?

Similarly to a second charge mortgage, a second charge bridge loan can be applied for if there is enough equity in the property to borrow against – while separating the existing mortgage on the property; both are to be repaid individually.

Here's how it works:

  • Second charge bridge loans typically require a specialist lender to facilitate, so the first step is finding a suitable lender.
  • Once a lender is found, the lender will need to determine the value of the property and the borrower's credibility and ability to repay the bridge according to the terms set. 
  • Once approved, a borrower will be offered a loan based on the equity available in the property. Because bridge loans are secured with collateral – i.e. the property – if it cannot be repaid, the lender can repossess the property.
  • Significantly, with second charge bridge loans, the order of priority is shifted. If a loan cannot be repaid, the first charge against the property must be repaid before the second charge.
  • With a solid exit strategy in place and the means to repay the bridge loan within the term, the borrower can use the money from the second charge bridge loan for whatever purposes they have for the loan.
  • With bridge loans, the term of repayment is much shorter than traditional borrowing – usually ranging from 12 to 18 months – and the additional fees and higher interest rates must be factored in beforehand, as bridge loans are generally more expensive monthly than repaying a mortgage – this is especially important with a second charge as you are now paying two separate loans off. 

Bridge loans are typically repaid by selling the property they are taken out against, or selling a separate property you own. Or, you can refinance.

With second charge bridge loans, you'll need to continue paying your mortgage monthly while the second charge bridge loan will be repaid separately.

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What Are Second Charge Bridging Loans Used For?

Much like any bridge loan, a second charge bridge loan is versatile, allowing a borrower a great deal of flexibility regarding usage and how quickly they can act in time-sensitive property transaction scenarios (such as buying a property at auction, or where your property chain falls through).

Here is a short list of uses a second charge bridge loan has:

  • Property purchases – second charge bridging loans are primarily used to purchase a new property to be repaid through the sale of the property the loan is taken out against. You can get a second charge bridge loan for buy-to-lets, HMOs, and residential and commercial property.
  • Property development – a second charge bridge loan can be used for light or heavy refurbishments to a property, or a full-scale development project, funded through the equity that a bridge loan provides. 
  • Business purposes – With a second charge bridge loan, you can pay an HMRC tax bill, expand your business premises with a property purchase, or fund a deposit for a purchase. If you own a business, a bridge loan is a great alternative to release equity and allow you quick access to funds for use in business purposes. 

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Can I Have Multiple Second Charge Bridging Loans?

While having multiple loans taken out against your property is possible, it's not always advisable. This could adversely affect your credit score and future ability to get a loan from a lender. When making important financial decisions, you should consult an expert to get the proper guidance regarding multiple second-charge bridge loans.

Want to know more? Our short video below explains how a bridging loan can be used to fix a chain break: 

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Are Second Charge Bridging Loans Regulated?

Second charge bridging loans for residential property that you or a family member will live in are regulated in the UK by the FCA (Financial Conduct Authority), while a bridging loan taken out for property investment or for purchasing a property for commercial use would be unregulated.

The FCA ensures borrowers are protected when dealing with lenders. They do this by overseeing and ensuring lending standards are adhered to and ensuring that affordability assessments are made or if a loan is suitable for that particular individual or business

Unregulated loans are not necessarily riskier or without rules and regulations – they have different rules and are taken out for purposes outside of purchasing a residential property. 

Before taking out a second charge bridge loan, it is a good idea to seek the help of an expert bridge loan broker who can determine whether it is the right option for you. 

Even though second charge bridging loans are regulated, seeking financial advice for important property finance decisions is always best.

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How Much Can I Borrow with a Second Charge Bridging Loan?

Second charge bridge loans typically start at £50,000 and have no absolute upper limits.

You can get an LTV (Loan-to-Value) of 80% - potentially more with other assets considered.

That being said, the amount you can borrow with a second charge loan will ultimately depend on the amount of equity within your property, alongside a lender's criteria, as this can vary between lenders.

A lender will offer a loan that is a percentage of your property's value – this is referred to as LTV.

  • It's important to remember that bridge loans can be expensive, with additional fees and higher interest rates than traditional borrowing such as a mortgage (however, you're not paying them for as long) – and with a second charge bridge loan, you'll be paying your monthly mortgage payments alongside paying off a bridge loan. 

Your repayment ability and credit history may also determine the amount you can borrow

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Bridging Loan Calculator

You can get an indicative quote using our bridge loan calculator and a general idea of the overall cost of the loan you require.

How to Apply for a Second Charge Bridging Loan

At Clifton Private Finance, we can facilitate a second charge bridge loan via several specialist lenders across the entire short-term market, lenders who are not typically available through the retail market.

Whether you are a property developer, investor, or a novice – we can quickly get you a decision in principle. With our expertise and depth of knowledge, we can find you an appropriate lender with favourable rates.

We can help by:

  • Comparing the market on your behalf and finding the best offerings from various lenders.
  • Negotiating and chasing up issues with lenders.
  • Helping you through the entire application process.
  • Organising valuations while liaising with your solicitor regarding paperwork.
  • Chasing up your application until you see funds delivered to your bank account - as quickly as possible.

Call us on 0117 313 5126 to discuss your requirements.

Frequently asked questions

You can find the most common questions asked about bridging loans below. If you have a question that isn't answered here, please email us at helpdesk@cliftonpf.co.uk

About Bridging loans

Here are some of the most common alternatives to bridging loans:

  • Second-charge mortgages
  • Remortgaging
  • Equity Release
  • Personal Loan
  • Savings or Family Support
  • Development Finance
  • Commercial Mortgages
  • Refurbishment Loans

We break down each of these other financing tools in our full guide to alternatives to bridging loans

While none of these options provide the flexibility, loan size and low interest rates that bridging loans do for property transactions, you may find they are more appropriate finance options for your specific situation.

No, there is no strict age limit for securing a bridging loan. 

Bridging loans are typically 12 months in duration, which means that there aren't age limits in place like there are for mortgages that can last for 25+ years. 

The main example where age may be an issue is if you plan to refinance your bridging loan with a standard mortgage. In which case, you'll need to be eligible for a standard mortgage to qualify for your bridging loan - and if you are approaching retirement age, this could be an issue and you may be rejected for a bridging loan.

However, we work with specialist equity release and lifetime mortgage lenders that can provide a Decision in Principle for later-life lending (if it's feasible) so that your bridging loan can be approved if it makes sense with your broader strategy. 

No high street banks currently offer bridging loans. Instead, bridging loans are provided by specialist short-term finance lenders.

At Clifton Private Finance, we are a whole of market brokerage that deals with multiple bridging loan lenders, and we act as an intermediary between clients and the lender ensuring the process is smooth and hassle-free, and making sure our clients are getting a good deal.

There are two types of bridging finance: regulated bridging loans and unregulated bridging loans.

It simply depends on the intended use of the property you're purchasing. 

When you or a family member intend to live in the property you’re purchasing with your bridging loan, you’ll need a regulated bridging loan.

If you're getting bridging finance on property that you or a family member will not be living in, or if it’s a commercial property, then you’ll need an unregulated bridging loan (commercial bridge loan). 

And if you intend to sell the property to repay your bridging loan (flipping the property) instead of refinancing or selling another property, you’ll get an unregulated bridge loan.

Regulated bridging loans are authorised and regulated by the FCA and are usually locked to a 12-month maximum term.  Unregulated bridging loans, meanwhile, can have extended periods of up to 36 months and are generally more flexible.

If you’re unsure, it’s best to speak to a qualified adviser to go over exactly what you need and find the best bridging loan for you.

Yes, bridging loans are generally considered safe provided they are used for suitable property transactions. Speaking to a bridging loan adviser is recommended if you're unsure about the risks and suitability of a bridging loan for your situation. 

Generally speaking, the main risk of a bridging loan is that if you cannot repay the loan, your property can be repossessed and sold to clear your debt.

For example, if you take out a bridging loan to buy a new property but your existing property fails to sell and you cannot recoup the funds, this could become a risk. However, bridging lenders always require their own valuations for any property involved in a bridging transaction to combat this.

Another example could be that you're unable to secure a mortgage to refinance your bridging loan. At Clifton, we make sure your remortgage plans are sound if this is your bridging loan exit strategy, and can even arrange your mortgage for you through our dedicated mortgage advice service on the other side to smooth the process.

Repayments

You cannot turn a bridging loan into a mortgage, but you can repay a bridging loan with a mortgage and effectively refinance it into a long-term arrangement. 

This is common when buying an unmortgageable property with a bridging loan, carrying out refurbishments, and then mortgaging it once it is wind and water-tight and a new valuation has been carried out. 

This is also common for properties bought at auction where a mortgage would be too slow to arrange, and so a bridging loan is used which is then replaced with a mortgage later.

A bridging loan exit strategy is simply the way in which you plan to repay your bridging loan. 

The most common exit strategies are selling an existing property, selling the property you're purchasing, refinancing with a mortgage, or a combination. 

Other more unique exit strategies can include selling a business, receiving a pending inheritance, or receiving a large tax rebate.

You do not pay monthly instalments towards the capital loan of your bridging loan. Some bridging loans require you to repay the interest accrued each month, but most lenders will actually give you the option to roll this up into the loan value, meaning you repay it with your lump sum at the end and have absolutely no monthly commitments. 

It's worth noting that as soon as you pay off most bridging loans, you stop accruing interest - so, the quicker you pay it off, the less expensive it will be, and there are typically no ERCs (early repayment charges).

If there is a purchase involved, bridging loans are paid from the lender to the lender’s solicitor, then to the client’s solicitor, and then to the seller’s solicitor - so, you as a client will not see the funds in your own account - similar to a mortgage.

If there is no purchase involved (for example, for a bridging loan for home improvements before selling), the funds go from the lender to the lender's solicitor, to the client’s solicitor, and then to the client's bank account. 

In terms of how bridging loans are repaid by you, they are repaid as a lump sum, either at the end of your term or during it. You can choose to either 'service' the interest, so pay the interest back monthly, or roll it up into the value of the loan to also pay this off as a lump sum along with the capital.

Deposits and terms

Regulated bridging loans (for residential properties) are typically 12 months, however, some non-regulated bridging loans for buy to lets and commercial properties can be up to 36 months. 

Some lenders are more flexible on term durations than others, and it can be a case-by-case basis as to whether you'll get approval for a longer loan term.

Almost all regulated bridging loans are short-term, and have a duration of 12 months.

Bridging loans are short-term by nature. However, there can be some flexibility on term length, particularly for unregulated bridging. For example, bridging for development projects, flipping properties, buy to let bridging loans and commercial bridging loans can all have longer terms up to 36 months. 

Some bridging loan lenders allow you to extend your term if at the end of 12 months your property hasn't sold or your alternative funding hasn't come through yet - however, this is down to the lender's discretion and there are no guarantees. It's important to be aware of the risks of bridging loans, and your property can be seized and sold to compensate for failure to repay. 

You can effectively secure a loan for 100% of a property value, but only if you have other property as security to keep your overall loan-to-value below 80%.

So, if you're getting a loan for 100% of a property value, you'll need another property in the background to secure it against. 

The easiest way to see if you're eligible is either to give us a call or use our bridging loan calculator that automatically calculates your LTV.

You don't necessarily need a deposit for a bridging loan in the traditional sense of cash reserves, but you do need security for your loan in the form of another property or asset to keep the loan-to-value below 80% at a maximum.

For example, if you're buying a £300k property with a £300k bridging loan, you'd need another property to secure the loan against along with the property you're buying, or else your loan to value would be 100%. 

Miscellaneous

Understanding the difference between net and gross calculations is essential when comparing deals from bridging loan lenders.

The calculation determines the maximum LTV (Loan-to-Value), how much you can borrow, and how much you will eventually repay.

Here’s the difference:

When calculating the net loan amount for bridging loans, the borrower deducts the loan costs and additional fees (such as the arrangement fee) from the total loan amount - this is known as net loan calculation.

Contrary to that, gross loan calculation is based on the loan amount the borrower can receive without deducting any costs or fees.

In brief, the gross loan calculation represents the total amount available to the borrower, while the net loan represents what the borrower ultimately receives after deductions.

Which calculation do lenders use for bridging loans?

A common complication arises when it comes to comparing bridging lenders, as different lenders advertise their bridging loan products differently. The upshot of this, is that it can become difficult to determine if a higher LTV (loan-to-value) represents the actual amount you could receive.

Lenders typically use a gross loan calculation when advertising or promoting their bridging loan products.

This is because the gross loan amount represents the maximum loan amount the borrower is eligible to receive, and can be used as a marketing tool to attract potential borrowers.

Nevertheless, the net loan calculation is used when negotiating an agreement, which is the amount the borrower will receive after deducting fees and other costs.

Borrowers are responsible for repaying this amount, and lenders will use that amount to determine repayment schedules and other loan terms.

How a broker can help with bridging loan calculations

A broker can assist with bridging loan calculations by providing clarity, expertise, negotiation skills, and a comparison of loan options to help you make more informed decisions.

A first charge bridging loan refers to a bridging loan that is the only charge against the property, i.e., there is no existing mortgage on that property.

A second charge bridging loan is when there is already a mortgage on the property that the bridging loan is being secured against. 

In the event of repossession, the 'first charge' has the legal right to be repaid first, before the second charge, which is why second charge loans can be slightly more expensive as they're a greater risk to lenders.

It is still entirely possible to secure a second-charge bridging loan and they are common within the industry. 

Yes, your bridging loan lender will require a new valuation to be carried out for all properties in your bridging loan transaction. 

In some cases, we can work with lenders that can facilitate a 'desk valuation', which is a valuation carried out online based on the local property market, images of the property and the specifications of the home - this can save a considerable amount in fees and speed up your application, but it's not always possible, especially for higher value properties. 

Yes, you can get a bridging loan with bad credit. 

While lenders will look at your credit score and factor it into your application, there is no requirement for regular loan servicing with a bridging loan, and so your income is not analysed and your credit score is significantly less important than with a mortgage. 

Using funds from a bridging loan to purchase a property puts you in a strong position as a buyer - similar to that of a cash buyer. 

Being a cash buyer is attractive to sellers because there is no onward chain requirement, and the funds are ready to go for the purchase.

Using a bridging loan also eliminates the need for the chain to complete, and puts you in a position where funds can be available in a matter of weeks for completion; effectively rendering you a cash buyer to prospective sellers.

Let us do all the hard work of finding the right bridging lender for your circumstances. We secure bridging finance for applications of all types, and we negotiate competitive lending to meet your needs and timescales.

Fergus Allen
Head of Bridging CeMAP

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