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Second Charge Bridging Loans From £500K+
Second charge bridging loans offer an effective short term funding solution when a mortgage is already in place.
KP Finance can help secure 2nd charge bridging loans from £500k+ for property purchases, developments or business opportunities.
We understand the importance of quick decisions, with the ability to organise a decision in principle in 24-48 hours and successful funding within 3-4 weeks.
Our second charge bridging loans offer up to 75% LTV, with interest rolled up over 3-24 months.
Call +44 203 488 1128
Samuel Kalms, Director
What is a Second Charge Bridging Loan?
A second charge bridging loan is a type of short term finance that sits behind an existing mortgage and can offer additional capital for a property purchase or renovation.
The loan becomes designated as a ‘second charge’ because it is the second priority in terms of payments against the property and order in which the lenders will be repaid first.
Importantly, a 2nd charge bridging loan can only be accessed if there is enough equity in the property.
You can get a second charge bridging loan from the same lender as the first charge, or you may access them from two different lenders.
Commonly, developers will apply for a second charge bridging loan with another provider who may offer more flexible terms than a traditional bank or mortgage lender.
To discuss your requirements, please contact our expert team using the details provided.
What is The Difference Between a First Charge and Second Charge Bridging Loan?
The key difference between a first charge and second charge bridging loan is the order of repayment, with the ‘charge’ referring to the order that the lender is repaid. In times of default, the first charge takes priority over repayment, followed by the second charge.
A bridging loan can exist as both a first charge or a second charge, but in the event that there is a mortgage already in place, the bridging loan immediately becomes a second charge.
Typically, the loan-to-value is much higher for a first charge loan (up to 75% LTV or higher) and it is lower for a second charge because there is now less equity in the property and the lender becomes second priority after payment. A lender may take a view depending on the project.
Second Charge Bridging Loan Repayment Example:
Loan Amount: £1,000,000 (at 70% LTV, property value = £1,428,571)
First Charge Loan: £500,000 (35% LTV)
Second Charge LTV: 35%
Term: 24 months, Interest Rate: 1% per month
Repayment Type: Rolled-up (interest paid at the end) Total Interest: £10,000 × 24 = £240,000
Total Repayment: £1,240,000 (loan + interest)
How To Apply For a Second Charge Bridge Loan
- Make an enquiry
- Get an offer
- Get a property valuation
- Complete with solicitors
- Your funds are released
You will start your application by sharing information about the property and your plans for it.
The property you are looking to purchase or renovate will be used as security during the loan team. The lender will consider the risk and offer terms based on the customer’s experience, financial background, the value and potential of the property.
All transactions will be subject to a property valuation and a legal review and once fully checked, the loan funds are released in one lump sum.
For lenders, it is key that the borrower has a clear exit strategy for paying off the loan at the end of its term. As an applicant, you will need to demonstrate clear plans, purchase costs, building costs and any necessary building work such as architect and engineering plans.
The loan is commonly repaid via a re-sale of the property, refinancing under new terms or alternative funding, such as moving the loan to a buy-to-let mortgage.
What Can I Use a Second Charge Bridge Loan For?
- Property purchases
- Investment property purchases
- Residential property
- Commercial property
- Buying property at an auction
- Renovations and refurbishments
- Chain breaks in property sales
- Land acquisition
What Kind of Properties With a Second Charge Bridging Loan?
- Residential
- Commercial (all asset classes),
- Mixed-use
- Land purchases
- HMOs
- Hotels
- Warehouses
- Garages
- Student accommodation
- Leisure centres and gyms
- Offices
- Blocks of flats
What Are The Benefits of a Second Charge Bridging Loan?
Access to Funds Without Disturbing Your First Mortgage –
A second charge bridging loan allows you to raise capital without refinancing or disturbing your existing first charge mortgage. This is particularly useful if your current mortgage has favourable terms you don’t want to lose or early repayment penalties. It provides a flexible way to unlock equity tied up in your property without restructuring your main finance.
Ideal for Short-Term Needs – Second charge bridging loans are designed for short-term situations like funding renovations, covering a temporary cash flow gap, or raising a deposit for another property. They’re also commonly used when speed is crucial or traditional lenders won’t approve further borrowing due to existing debt levels. Since bridging lenders are often more flexible, second charge bridges can suit more complex or urgent financial needs.
Maintain Ownership and Control of Your Assets – Unlike selling a property or seeking equity partners, a second charge bridging loan allows you to retain full ownership of your asset while leveraging its value. This is especially valuable for investors, developers, or business owners who want to use existing assets to fund new opportunities, without giving up equity or control.
No Early Repayment Penalties – Most bridging lenders do not charge early repayment fees if you are able to exit and repay your loan in full early.
Useful Guides
Are Bridging Loans Regulated or Unregulated?
Am I Eligible For a Bridging Loan?
What is The Criteria To Apply With KP Finance?
- UK resident or company
- Property used as security
- Property is in UK, Scotland or Wales
- Clear exit strategy
- Financial records and statements
- Proof of funds/deposit
- Good credit history preferred but not essential
Why Should I Use KP Finance For 2nd Charge Bridging?
We understand the needs of property developers and investors. When timing is of the essence, we are able to provide fast decisions, approvals and funding where needed.
Founded in 2016, our expert advisors have more than 30 years combined experience in the bridging sector and will offer market knowledge and established relationships with lenders to get you the best terms possible.
KP Finance is not simply an intermediary. We are involved in the entire transaction from initial enquiry to post completion and want to help you achieve your goals in the most practical and effective way.
Frequently Asked Questions
Are You a Lender or a Broker?
KP Finance is a bridging loan broker. Our expertise and experience in the bridging finance industry allows us to place your loan requirements with the best and more suitable lender. This is not about just getting the cheapest rates possible, but rather connecting you to a lender that understands your personal needs and requirements and can offer flexible terms that are structured for you.
Our track records demonstrates our ability to maximise approvals for our customers, helping them access fast funding to bring their projects to life. Please contact us at enquiries@kp-finance.com or call 0203 488 1128 to speak to a team member today.
How Much Does Bridging Finance Cost?
Interest rates for bridging loans start from 0.40% per month over BOEBR (variable) or c.0.7%-1.25% fixed) and will vary depending on the level of risk and experience of the customer.
What Are The Additional Fees Involved?
- Arrangement fees (typically 2%)
- Valuation fees
- Legal fees
- Exit fees (if applicable)
What is The Maximum LTV You Can Access With a Second Charge Bridging Loan?
The maximum loan-to-value (LTV) available through second charge bridging loans is 75% LTV, but this may be as high as 80% depending on the circumstances. Some lenders may be more restrictive with the amount they can lend via a second charge bridge, and this may depend on the amount of equity in the property available.
Can You Have Multiple Second Charge Bridging Loans?
Yes, in theory you can take out multiple second charge bridging loans or have a third charge loan.
Some recommend that you should limit the number of additional bridging loans that you take to avoid taking on too much debt and having multiple creditors involved on a single property.
Are Second Charge Bridging Loans Regulated?
Yes, it is possible to apply for a second charge bridging loan with both a regulated and unregulated lender.
If the application is made on the property that is used as you or your family’s primary residence, this will fall under the regulation of the Financial Conduct Authority (FCA) and will ensure there are more checks in place and protection for borrowers so that they do not lose their primary home.
Any bridging activity for business, commercial or not on someone’s primary residence will fall under unregulated bridging activity – and in this space lenders can be more flexible with their terms and eligibility criteria because they are not bound by the same rules and regulations.
