Second-charge loans for investors and limited companies.
Raise capital behind your existing mortgage, on a buy-to-let, HMO, commercial unit or portfolio property, without touching your first charge. For limited companies and SPVs.
What is a second-charge loan?
A second-charge loan sits behind an existing mortgage on a property you already own. Your existing mortgage is the first charge; the new loan is the second charge. If the property is sold, the first-charge lender is repaid first and the second-charge lender out of what is left.
It lets you raise capital against the equity in a property without disturbing the first mortgage. That matters when the first mortgage carries a rate, or an early repayment charge, you would rather not lose.
This page is about second charges on investment and commercial property held by a company or a landlord. That is unregulated commercial lending and we arrange it directly. A second charge on a home somebody lives in is regulated, a different product under different rules: see second charges for homeowners.
Why raise a second charge instead of remortgaging?
You want to release capital from a property: a deposit on the next one, works, or cashflow. There are three routes, and a second charge wins in four specific situations.
- Your first-charge rate is worth keeping. If you are on a low fix, remortgaging the whole loan to release equity means giving that rate up on the entire balance. A second charge leaves it alone and prices only the new money.
- There is a large early repayment charge. Remortgaging mid-fix can trigger an ERC on the whole loan, which can wipe out the benefit of releasing the equity in the first place. A second charge sits behind and avoids it.
- The first lender will not advance more, or not quickly. A further advance goes at your existing lender's pace. A second-charge lender is a separate decision and can often move faster.
- You are expanding a portfolio and recycling equity. Pulling a deposit out of property three to buy property four, without refinancing one, two and three every time.
The maths that decides it is usually simpler than people expect. A remortgage reprices everything: the money you already owe as well as the money you want. A second charge reprices only the new money, but at a higher rate because the lender sits behind someone else. So the question is whether the higher rate on the new slice costs less than the worse rate, plus any early repayment charge, on the whole balance. On a large first charge at a low fixed rate, that comparison very often favours the second charge. On a small balance at a rate you would refinance anyway, it usually does not.
What investors use second charges for.
Releasing a deposit for the next purchase
Equity in one property becomes the deposit on the next, without refinancing the first.
Funding refurbishment
On one property or across a portfolio. Refurbishment bridging is the other route.
Business or portfolio cashflow
Secured on property equity rather than taken unsecured at a higher cost.
Bridging a gap
A second-charge bridge where timing matters more than term. Commercial bridging.
Second charge, bridging or remortgage?
| Route | Best when |
|---|---|
| Second charge, term | You want to keep the first charge and borrow long-term behind it |
| Second-charge bridge | Same, but short-term and fast: a project, or a gap to close |
| Remortgage | The whole loan is due to refinance anyway, or the first rate is not worth keeping |
| Further advance | Your existing lender will offer good terms on more money |
We arrange all four, so we have no reason to push the one that suits us. We will tell you which actually fits.
What lenders check, and the consent point everyone misses.
- The equity. How much is left after the first charge. The second-charge lender is lending against that margin, so the combined loan to value across both charges is what matters, not the second charge in isolation.
- First-charge consent. This is the one that catches people. Your first-charge lender usually has to consent to another lender taking a charge behind them. Some are relaxed about it. Some take weeks. Some simply refuse. A second-charge application can stall entirely on this, which is why it gets checked at the start rather than discovered at week four.
- The property and the income. For investment property the rental income and the asset type, assessed much like a buy-to-let or commercial case.
- The company. Whether it is an SPV, the SIC codes, and personal guarantees. SPV mortgages covers how lenders look at this.
- The exit. How the second charge gets repaid: sale, refinance, or out of income. A lender second in line cares about this more, not less.
What it costs.
Second-charge rates typically sit above first-charge rates, because the lender is second in line if the property is sold. Beyond the rate there is an arrangement fee, a valuation and legal costs.
We do not publish a fixed rate for second charges. The price depends on the combined loan to value, the property, the income and the exit, and a headline number that ignores those would be misleading rather than helpful. We will indicate real terms once we know the case.
Whether a second charge beats remortgaging comes down to your first-charge rate, any early repayment charge, and the total cost of both routes over the period you actually need the money. Running that comparison is part of the job.
One thing worth planning for: the second charge and the first charge will usually have different end dates. When the first charge comes up for refinance, the second charge is still sitting there and has to be either repaid, or consented to again by the incoming lender. It is a solvable problem, but it is much easier solved at the outset than discovered two years later, so we will ask about the first charge's term before recommending anything.
Why use a broker for this.
Second-charge lending to investors is a specialist corner: fewer lenders, consent to manage, and pricing that moves with combined LTV and asset type.
- Working out whether it beats the alternative. Sometimes a remortgage or a further advance is plainly cheaper, and you should be told that.
- Managing first-charge consent. The step where these deals stall, and the one a borrower going direct usually meets too late.
- Matching asset type to lender. Not every second-charge lender will look at an HMO, a semi-commercial unit or a holiday let.
- Structuring the company case properly. SPV, SIC codes, guarantees.
- Costing the whole thing, not the headline rate.
We hold and develop property ourselves, and we arrange this kind of lending for limited companies and SPVs only. Commercial mortgages · The team
Frequently asked questions.
What is a second-charge loan?
A loan secured behind an existing mortgage on a property you own. It lets you raise capital against your equity without changing the first mortgage.
Can a limited company get a second charge?
Yes. On investment or commercial property it is unregulated commercial lending, and we arrange it directly for limited companies and SPVs.
Why take a second charge instead of remortgaging?
Mainly to keep a good first-charge rate, or to avoid a large early repayment charge. A second charge leaves the first mortgage untouched and prices only the new borrowing.
Does my first-charge lender need to agree?
Usually yes. The first-charge lender typically has to consent to a second charge behind them, and that is often where applications slow down or fail. We deal with it at the start rather than the end.
Are second-charge rates higher?
Usually, because the lender is second in line if the property is sold. Whether it still beats remortgaging depends on your first-charge rate and any early repayment charge.
Is this regulated?
Not for investment or commercial property held by a company: that is unregulated commercial lending. A second charge on a home you live in is regulated, and we introduce you to an authorised partner for it. Second charges for homeowners.
Do you work with individuals?
For unregulated second charges we work with limited companies and SPVs. If you need a regulated second charge on your own home, we introduce you to our authorised partner rather than turning you away. Second charges for homeowners.
Tell us about the property.
The equity, the first charge and what you need the money for is enough to start.