Unlock Equity Without Losing Your Low-Rate Mortgage: Second Charge Bridging Loans Explained
Still on a Cheap Mortgage? Here’s How to Raise Funds Without Giving It Up
You’ve secured a great mortgage deal—perhaps a fixed rate from a few years back, locked in before rates began to climb. It’s saving you thousands.
Now you need funding. Maybe it’s for a property purchase, a renovation project, a tax bill, or even to help a family member with a deposit. But refinancing means walking away from that low interest rate—and possibly paying early repayment charges.
So, what’s the solution?
A second charge bridging loan.
As a specialist property development finance and bridging loan broker here in the UK, I’ve helped hundreds of clients raise capital quickly—without touching their main mortgage. Let’s explore how second charge bridging works, who it’s for, and why it’s one of the smartest tools in the 2025 UK property market.
What Is a Second Charge Bridging Loan?
A second charge bridging loan is a short-term loan secured against your property—but unlike a remortgage or first charge bridge, it sits behind your current mortgage.
Here’s how it works:
- Your original mortgage remains in place with the same terms
- The second charge lender takes a secondary legal claim on your property
- You access cash quickly using your property’s equity—without disrupting your existing loan
Bridging loans are typically interest-only and last between 3 to 18 months. They are designed to “bridge the gap” until a property is sold, refinanced, or other capital is raised.
Why Choose a Second Charge Bridge Instead of Remortgaging?
| Reason | Benefit |
| Preserve your mortgage deal | Keep your low interest rate and avoid costly ERCs |
| Faster than traditional remortgages | Funds can be released in as little as 7–21 days |
| Use your equity flexibly | Fund renovations, deposits, business needs, or debt consolidation |
| No affordability checks | In many cases, bridging lenders focus on the property and exit plan—not income |
| Retain full property control | No need to involve the main mortgage lender in most cases |
Who Uses Second Charge Bridging Loans?
🏘️ Property Developers & Investors
- Raise fast capital for refurbishments or auctions
- Secure funds for planning gains, JV deals, or deposits
🏡 Homeowners with Equity
- Access funds for extensions, loft conversions or other home improvements
- Avoid remortgaging while under a fixed-rate deal
🧾 Self-Employed or Business Owners
- Use property equity to cover cash flow gaps or invest in your business
- Typically easier than getting a business loan
👨👩👧👦 Families Supporting Each Other
- Parents helping children with deposits
- Releasing equity for life events without selling the home
Real Example: Bridging Success Without Remortgaging
A client came to us with a semi-detached property in Hertfordshire worth £600,000. Their mortgage was just £200,000, on a 1.89% fixed rate for another 2 years. They needed £100,000 to convert a property into two flats but didn’t want to refinance and lose that golden deal.
We arranged a second charge bridge of £100,000 within 10 days, secured against their equity. They completed the work, refinanced into a BTL mortgage, and repaid the bridge—all while keeping their original mortgage untouched.
Smart funding, minimal disruption.
Eligibility: Who Qualifies for Second Charge Bridging Loans?
Second charge bridging is open to a wide range of borrowers:
✅ UK homeowners
✅ Landlords and property investors
✅ Limited companies and SPVs
✅ Self-employed individuals
✅ Those with credit issues (in some cases)
Key factors lenders look at:
- Sufficient equity – Usually need at least 40% remaining equity
- Clear exit strategy – e.g., sale of property or refinance
- Loan-to-value (LTV) – Most lenders cap combined LTV at 65–75%
- Property type – Residential, BTL, HMOs, and some commercial accepted
Need help working out your equity and LTV? We can help.
What Can Second Charge Bridging Loans Be Used For?
Second charge bridging is extremely flexible. You can use it for:
- Property development or refurbishment
- Auction purchases
- Raising deposit for another property
- Business cash flow or expansion
- Paying HMRC tax bills
- Divorce settlements
- Debt consolidation
Pros and Cons of Second Charge Bridging Loans
✅ Pros:
- Keep your current mortgage deal
- Fast access to capital (days, not months)
- Minimal credit checks in some cases
- No monthly repayments (interest rolled up)
- Flexible use of funds
❌ Cons:
- Higher interest than standard loans (as it’s short-term)
- Legal and valuation fees apply
- Requires a strong exit strategy
- Risk of repossession if not repaid
Second Charge Bridging vs Remortgaging: A Quick Comparison
| Feature | Second Charge Bridge | Remortgage |
| Keep existing mortgage? | ✅ Yes | ❌ No |
| Speed | 🟢 Fast (7–21 days) | 🔴 Slow (4–12 weeks) |
| Credit checks | ✅ Often light | ✅ Full affordability assessment |
| Early repayment charges? | ❌ None on mortgage | ✅ Usually applied |
| Term | 3–18 months | 2–35 years |
| Repayment | Interest-only or rolled up | Monthly repayments |
FAQs About Second Charge Bridging Loans
❓ Can I get a second charge bridge with bad credit?
Yes—in many cases. As long as you have a solid exit strategy and enough equity, many lenders will still consider you.
❓ Do I need my mortgage lender’s permission?
Usually no. Since the second charge is a separate agreement, it doesn’t interfere with your main lender unless the legal title specifies otherwise.
❓ What’s the minimum and maximum I can borrow?
Most lenders start at £25,000 and go up to several million, depending on your equity and circumstances.
❓ What’s the interest rate?
Rates vary from around 0.95% to 1.5% per month depending on the loan amount, LTV, and borrower profile.
Next Steps: Is a Second Charge Bridging Loan Right for You?
If you’re asset-rich but don’t want to touch your low-rate mortgage—or if you just need fast, flexible funding—a second charge bridging loan could be the perfect solution.
At Sunrise Commercial Finance, we specialise in second charge bridging across England, Scotland and Wales. Whether you’re an investor, developer, or homeowner, we’ll guide you through the options and secure the best deal for your circumstances.
Contact Us Today for Expert Advice
📞 Call us at 07939 091418
📧 Email: john@sunrisecommercial.co.uk
🌐 Visit: https://www.sunrisecommercial.co.uk/
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