Equitable Charge Bridging Loans
Consent refused for a second legal charge? An equitable charge bridging loan may still be possible. Where your first charge mortgage lender won't permit a standard second charge bridging loan, an equitable charge creates a binding legal interest in the property without requiring their consent. From 1.25% per month, up to 60% CLTV, specialist lenders, same-day DIP.
What is an Equitable Charge Bridging Loan?
An equitable charge bridging loan is short-term finance secured against a property using an equitable rather than a legal charge — a binding interest created through property law principles rather than formal registration of a legal charge requiring the existing lender's consent. It exists specifically to solve one problem: your first charge mortgage lender has refused, or is unlikely to grant, consent for a standard second legal charge. Without consent, a legal second charge cannot be registered at HM Land Registry — but an equitable charge can still be put in place, giving the lender a genuine legal interest and giving you access to the capital you need.
How an Equitable Charge Works
A legal second charge requires formal registration at HM Land Registry — and that registration requires the consent of the first charge lender, because their existing charge acts as a restriction on the title. An equitable charge takes a different legal route. Rather than registering a new legal charge, it creates a binding equitable interest in the property — typically by depositing the title documents, by way of a formal charge deed, or through an agreement that a court would recognise and enforce. This interest does not require the first charge lender's permission to exist.
The trade-off is enforcement. A legal charge holder has a statutory power of sale and well-established remedies if a borrower defaults. An equitable charge holder has a real, binding legal interest, but their enforcement route typically requires a court order to force a sale, rather than an automatic statutory power. This additional friction — and the narrower pool of lenders willing to accept it — is why equitable charge bridging carries a rate premium and a lower maximum CLTV than a standard legal second charge.
Equitable charge bridging is not a separate product category from second charge bridging — it's the specialist fallback within it. Our main second charge bridging loans page covers the full picture including CLTV, consent, and standard legal second charge pricing. This page goes deep specifically on the equitable charge route — what it is, when it's needed, and what it costs — for the subset of cases where consent for a legal second charge isn't available.
Do You Need an Equitable Charge? A Quick Decision Guide
Most borrowers raising capital against a mortgaged property don't need an equitable charge — a standard legal second charge is cheaper, has a wider lender pool, and works fine where the first lender consents. Equitable charge only becomes relevant in a specific set of circumstances.
Don't assume an equitable charge is needed without first checking the actual consent position. Many lenders that seem restrictive in general terms and conditions will still grant consent case-by-case when asked properly through a broker. We check the realistic consent position on every enquiry before recommending an equitable charge route — it's a more specialist, more expensive product, and we only suggest it where the standard route genuinely isn't viable.
Equitable Charge vs Legal Second Charge
Understanding what you give up — and what you gain — by going the equitable charge route helps set realistic expectations on rate, leverage, and lender choice.
Legal Second Charge
- Registered formally at HM Land Registry
- Requires first charge lender consent
- Lender has statutory power of sale on default
- Wide lender pool — competitive pricing
- Up to 70% CLTV on qualifying cases
- Rates from 0.95% per month
Equitable Charge
- Binding interest created without Land Registry consent restriction
- No first charge lender consent required
- Enforcement typically requires a court order
- Specialist lender panel — narrower market
- Up to 60% CLTV on qualifying cases
- Rates from 1.25% per month
| Factor | Legal Second Charge | Equitable Charge |
|---|---|---|
| First lender consent needed? | Yes — required | No — not required |
| Land Registry registration | Formal legal charge | Notice/restriction route, not a full legal charge |
| Lender enforcement rights | Statutory power of sale | Typically requires court application |
| Maximum CLTV | Up to 70% | Up to 60% |
| Typical rate | From 0.95% pm | From 1.25% pm |
| Lender pool | Wide — many specialist lenders | Narrow — specialist only |
| Typical timeline | 5–21 days (consent dependent) | 7–14 days (no consent wait, but specialist underwriting) |
Equitable Charge Bridging Loan Rates UK 2026
Rates start from 1.25% per month for qualifying cases — reflecting both the narrower lender pool willing to accept equitable security and the additional underwriting required to confirm the structure is appropriate for the specific property and borrower.
| Scenario | Indicative Rate | CLTV | Notes |
|---|---|---|---|
| Strong equity, clean credit, evidenced exit | From 1.25% pm | Up to 50% | Best pricing within this product. Low CLTV is the key driver. |
| Standard residential — most transactable | 1.30%–1.45% pm | Up to 60% | Where most equitable charge cases price. |
| Adverse credit — equitable charge | 1.45%–1.75% pm | Up to 55% | Asset quality and exit dominate underwriting. |
| Complex title or borrower structure | 1.50%–1.85% pm | Up to 50% | Trusts, complex SPVs, or unusual ownership — case by case. |
It's tempting to compare 1.25%+ pm unfavourably against 0.95% pm legal second charge pricing — but that comparison only matters if a legal second charge is actually available. Where consent is genuinely refused, the realistic alternative is often a full remortgage (triggering early repayment charges that can run into thousands of pounds) or losing the opportunity the capital was needed for entirely. Measured against those alternatives, equitable charge pricing is usually the cheaper path forward, not the expensive one.
Equitable Charge Eligibility & Property Requirements
Because the lender pool is narrower and the legal structure more specialist, eligibility criteria are tighter than for a standard legal second charge — but the core requirement is the same: sufficient equity and a credible exit.
Clear, Assessable Title
- Registered title at HM Land Registry
- No defects that would complicate an equitable interest
- Standard residential, semi-commercial or commercial
- England and Wales
- Sufficient equity below 60% CLTV
Who Can Apply
- Individuals, Ltd companies, LLPs, SPVs
- UK residents and non-UK nationals (specialist lenders)
- Adverse credit considered on strong equity cases
- First charge lender's consent position confirmed early
Exit Requirements
- Clear, credible, and achievable within term
- Sale, refinance, or capital event evidenced
- Particularly important given enforcement is via court route
- Lenders weight exit strength heavily on equitable cases
Because an equitable charge lender's enforcement route typically requires a court order rather than a statutory power of sale, lenders place even greater weight on the credibility of your exit strategy than on a standard second charge. A strong, evidenced exit — clear comparable sales evidence, a realistic refinance plan, or a documented capital event — meaningfully improves both pricing and approval likelihood on this product.
How to Apply for an Equitable Charge Bridge
Because the legal structure is more specialist, the application process leans more heavily on solicitor expertise from the outset — but it also removes the consent-wait that often slows down a standard second charge.
Confirm the Route — Same Day
We first confirm that a legal second charge genuinely isn't available — checking the consent position properly rather than assuming. If it isn't, we assess CLTV, property type, and exit to confirm equitable charge eligibility and issue a same-day DIP.
Specialist Lender Match & Valuation
We match the case to one of our specialist equitable charge lenders and instruct valuation. Given the narrower lender pool, matching the right lender to the specific property and borrower profile is the most important step in keeping pricing and timeline competitive.
Specialist Legal Process
Solicitors experienced in equitable charge structures prepare the documentation — typically a formal charge deed and supporting agreements. This step requires more specialist legal expertise than a standard second charge, which is why we work only with solicitors experienced in this specific structure.
Completion
Funds released once the equitable charge documentation is complete. Without a consent-wait from the first lender, well-packaged cases can complete in 7–14 working days — often faster than a legal second charge stuck waiting on a slow-responding first lender.
Case Study: Equitable Charge Bridge, Bristol
Equitable Charge Bridge — Consent Refused by Building Society, Bristol
Completed: Day 14Situation: Property owner needed £55,000 for a time-sensitive business opportunity. Their first charge lender — a building society with a blanket policy against second charges on their residential mortgages — refused consent outright. Two other brokers had told the client the case was impossible before it reached Aura Capital.
Approach: Legal second charge confirmed not possible at DIP stage — before any costs were incurred. A specialist equitable charge lender was identified and matched to the case. With no consent wait required, the specialist legal process completed in 14 days.
Outcome: Business opportunity funded. The bridge was redeemed at month 5 from business income. The rate premium versus a legal second charge (1.35% vs the 1.00%–1.10% pm that would have applied) was the trade-off for proceeding on a case two other brokers had declined.
This case is also referenced on our second charge bridging loans page as an example of the consent-refused scenario.
Equitable Charge Bridging FAQs
An equitable charge bridging loan is short-term finance secured against property using a binding equitable interest rather than a formally registered legal charge. It exists specifically for situations where a first charge mortgage lender has refused, or won't realistically grant, consent for a standard second legal charge — since registering a legal second charge requires that consent, while an equitable charge does not.
No. This is the defining feature of an equitable charge — it does not require the first charge lender's consent, because it does not register as a formal legal charge that would trigger their existing restriction on the title. It is the route used specifically when consent for a legal second charge has been refused or is impractical.
A legal second charge is formally registered at HM Land Registry, requires first charge lender consent, and gives the lender a statutory power of sale on default. An equitable charge creates a binding legal interest without requiring consent, but typically requires the lender to apply to court to enforce a sale rather than relying on a statutory power. This additional friction means a narrower lender pool, lower maximum CLTV (around 60% vs 70%), and higher rates (from 1.25% pm vs 0.95% pm) compared to a legal second charge.
Rates start from 1.25% per month for qualifying cases at conservative CLTV with a strong, evidenced exit. Most cases price between 1.30% and 1.75% per month depending on CLTV, property type, credit profile, and exit strength. This is higher than standard second charge pricing, reflecting the narrower specialist lender pool and the court-based enforcement route.
Up to 60% CLTV on qualifying cases — lower than the 70% typically available on a standard legal second charge, reflecting the additional risk lenders accept from the equitable structure and the court-based enforcement route should the borrower default.
Yes, almost always. A standard legal second charge is cheaper, has a wider lender pool, and offers higher leverage where your first charge lender will consent. Equitable charge is the specialist fallback for cases where consent is genuinely refused or impractically slow — not an alternative to be chosen by default. We always check the realistic consent position first; see our second charge bridging loans guide for the standard route.
Well-packaged cases typically complete in 7–14 working days. Because there is no consent-wait from the first charge lender, an equitable charge can sometimes complete faster than a legal second charge stuck waiting on a slow-responding first lender — even though the specialist legal documentation takes more care to prepare correctly.
Yes, often. As with most bridging finance, the strength of the security and exit carry more weight than credit score. Satisfied CCJs, defaults, and mortgage arrears are regularly considered by specialist equitable charge lenders where the equity position and exit are strong, typically with a rate premium and a slightly reduced maximum CLTV.
Yes — equitable charge bridging is available to limited companies, LLPs and SPVs through our specialist lender panel, on the same basis as individual applications. Directors typically provide personal guarantees, and the underlying consent position with the company's first charge lender is assessed in the same way as on a personal application.
Check Whether an Equitable Charge Is the Right Route
Send us the property address, existing mortgage balance, loan required, and the consent position with your first lender. We confirm whether a legal second charge is genuinely off the table, and if so, whether an equitable charge route is available — the same day, before any costs are committed.
Risk warning: any mortgage or debt facility secured against property may be subject to repossession if repayments are not maintained. Equitable charge structures are specialist and may not be available in all cases. All applications subject to underwriting, legal due diligence, and exit assessment. Aura Capital is an independent brokerage — we are not a lender.