How to release equity on a mortgaged property with bridging loans

If you have equity in your property, you know that there is cash locked away. If you could access this equity, it could be handy. You could add an extension to your home, make renovations to increase its value ready for selling on the property market or put down a deposit on another property.

If you have an outstanding mortgage, you probably don’t want to remortgage and pay interest on the cash for the next ten or fifteen years. So, what is the solution? 

Solution: A Second charge bridging loan

It is possible to get bridging loans as long as you have enough equity in the property to fund the proposed development.

There are pros and cons to second charge loans, so it makes sense to review these before deciding if these home owner loans are right for you.


  • Access to larger amounts of money (25k – 5 million)
  • Quick access to funds / quicker completion
  • Paid off quickly
  • More freedom to spend how you choose
  • Low income / poor credit rating considered


  • Higher interest rates
  • 12-month deadline

Staying in your home or selling your home?

Bridging loans are usually structured in two different ways. One works best if you are staying in your home, and the other will work for you if you are developing your home with the intention to sell.

If you are staying in your home, your bridging loan is arranged for the amount you need, and you pay this back over 12 months. This means that you clear the loan quickly and pay interest on it for the shortest amount of time, without affecting your existing mortgage.

If you intend to sell your home, your bridging loan can clear your original mortgage, provide the cash you need to develop the property and wrap these up in one loan.

For example, you own a house worth £250,000, and you have paid off £50,000, leaving you £200,000 left on the mortgage. You borrow £250,000, pay off the mortgage and use the remaining £50,000 for the property development. The bridging loan is then repaid with the sale of the property. 

Secured loans are also available to solve problems such as moving home before selling your existing home and purchasing a second home.

Second charge bridging loans with Friends Capital 

You can apply for a bridging loan with Friends Capital. We have the best rates and will help you find the right solution for you.