Second Charge Bridging Loans Explained: What You Need To Know
If you’re a new property developer, landlord or investor in the UK, chances are you’ve come across the term “second charge bridging loan”—but what does it actually mean?
As an experienced bridging loan broker, I work with clients every day who have untapped equity sitting in their properties—but they either don’t want to, or can’t, remortgage. That’s where second charge bridging finance becomes a powerful tool.
In this article, I’ll break it all down in plain English:
✅ What second charge bridging loans are
✅ How they work
✅ What you can use them for
✅ What terms like gross loan, net loan, and loan-to-value (LTV) really mean
Let’s demystify second charge bridging loans—and show how this smart funding option can help you move faster, raise capital, and grow your property business.
What Is a Second Charge Bridging Loan?
A second charge bridging loan is a short-term loan secured against a property that already has a mortgage on it. This loan is secured as a “second charge”—which means it ranks behind the first mortgage if the property is ever sold or repossessed.
Unlike a remortgage, a second charge bridging loan lets you access the equity in your property without changing or disturbing your current mortgage deal.
In Simple Terms:
- You keep your existing mortgage
- You borrow additional funds against your equity
- The new loan is placed as a second charge behind your first mortgage
- You repay it after a short period (usually 3–18 months), often via sale or refinance
How Do Second Charge Bridging Loans Work?
Here’s a quick example:
- Property value: £400,000
- Existing mortgage: £200,000
- Equity available: £200,000
- Most lenders will allow up to 65–75% Loan-to-Value (LTV) combined (first + second charge)
In this case, you could raise up to £100,000–£120,000 via a second charge bridging loan—without disturbing your original mortgage.
Key Features:
- Fast access to funds (usually within 5–21 days)
- Short-term loan (3–18 months)
- Interest can be “rolled up”, meaning you don’t make monthly payments
- Flexible uses: property purchases, renovations, auctions, business needs, tax payments
What Can You Use a Second Charge Bridging Loan For?
This type of finance is incredibly versatile. Here are just some common uses:
✅ Property Investment
Use the loan to purchase a new buy-to-let, HMO, or even land without needing to refinance your current property.
✅ Auction Purchases
Speed is essential at auction. A second charge bridge gives you the quick liquidity needed to complete within 28 days.
✅ Refurbishments & Conversions
Use equity in one property to fund works on another—ideal for flips, HMO conversions, or commercial-to-resi projects.
✅ Business Cash Flow
Some landlords use this as a short-term funding solution for business expansion or paying urgent tax bills.
✅ Avoiding Early Repayment Charges
If you’ve locked in a favourable mortgage deal, a second charge loan lets you keep that rate while still accessing your capital.
Understanding Key Terms: Gross Loan, Net Loan, and LTV
Property finance can be full of jargon, so let’s simplify three important terms:
🔹 Loan-to-Value (LTV)
This refers to the total borrowing as a percentage of the property’s value.
Example:
- Property value = £400,000
- Mortgage + Bridging Loan = £280,000
- LTV = 70%
Most lenders cap the total LTV (first + second charges) between 65% and 75%, depending on risk.
🔹 Gross Loan Amount
This is the total loan, including:
- Broker fees
- Lender arrangement fees
- Rolled-up interest
- Legal and valuation fees (if included)
It’s the full loan figure before deductions.
🔹 Net Loan Amount
This is the actual amount you receive after fees and costs are deducted from the gross loan.
Example:
- Gross loan: £100,000
- Fees & interest: £10,000
- Net loan to you: £90,000
When comparing offers, always check whether figures quoted are gross or net, so you know exactly what cash you’ll receive.
Who Qualifies for a Second Charge Bridging Loan?
These loans are typically suitable for:
- Property owners with sufficient equity
- Landlords with existing buy-to-let or HMO properties
- Developers or investors with a clear exit plan
- Clients with low-rate mortgages they want to keep intact
Credit history is important—but many lenders are more flexible with bridging loans than with traditional mortgages.
Why Work with a Specialist Broker Like Sunrise Commercial Finance?
At Sunrise Commercial Finance, we specialise in second charge bridging and property development loans across the UK.
As an experienced broker, we help clients:
- Access the best rates from trusted lenders
- Understand the true costs and structure of the loan
- Move quickly to secure deals without delays
- Avoid remortgage headaches and hidden fees
We work with first-time investors as well as experienced landlords—and we speak your language.
Final Thoughts: Is a Second Charge Bridging Loan Right for You?
If you’re sitting on equity and want to grow your portfolio, secure a new opportunity, or unlock capital without disturbing your mortgage—a second charge bridging loan may be the perfect solution.
The key is getting the structure right from the start. That’s where we come in.
Get Expert Advice Today
At Sunrise Commercial Finance, we’ll help you:
✅ Assess how much equity you can release
✅ Structure the loan with the right exit strategy
✅ Compare offers from top UK lenders
✅ Move quickly to secure the funds you need
Call us now or enquire online for a free, no-obligation quote.
📞 Call us at 07939 091418
📧 Email: john@sunrisecommercial.co.uk
#SecondChargeLoan #BridgingLoansUK #PropertyFinance #BuyToLetFinance #UKLandlords #EquityRelease #AuctionFinance #HMOFinance #DevelopmentFinanceUK #SunriseCommercialFinance #BridgingBrokerUK #RemortgageAlternative