What’s the Difference?
When it comes to bridging finance, understanding the difference between a first charge and second charge loan can help you choose the right funding solution for your project. At Reim Capital, we tailor every facility to your circumstances, but knowing how each works is the first step.
What is a First Charge Bridging Loan?
A first charge loan is secured against a property as the primary debt.
- The lender holds the first legal right to the asset if it’s sold.
- Typically used when there’s no existing mortgage or the bridging loan replaces the current one.
- Interest rates are generally lower than second charge loans, as the lender’s risk is reduced.
Example:
You purchase an auction property and need funds to complete in 28 days. You take a first charge bridging loan to secure the property until your long-term mortgage is arranged.
What is a Second Charge Bridging Loan?
A second charge loan sits behind an existing mortgage or loan.
- The first lender keeps priority in repayment if the property is sold.
- The bridging lender gets paid after the first charge lender.
- Usually carries a slightly higher interest rate due to increased risk.
Example:
You already have a mortgage on your property but need quick access to funds for renovations or a new investment. A second charge bridging loan allows you to release equity without disturbing your current mortgage.
Which One Should You Choose?
It depends on your situation:
- First Charge – Ideal if you own the property outright or want to refinance fully.
- Second Charge – Suitable if you want to keep your existing mortgage in place while raising additional funds.
At Reim Capital, we offer both first and second charge bridging loans from £100,000 to £25 million, with up to 75% LTV, tailored to fit residential, semi-commercial, and commercial projects.
Why Work With Reim Capital?
- Speed – Completion in as little as 3 working days.
- Flexibility – Bespoke solutions for each deal.
- Transparency – Clear terms, no surprises.
If you’re unsure whether a first or second charge bridging loan is right for you, our experienced team is here to guide you.
