Second charge lending that sits behind your primary mortgage, unlocking additional equity for property investment and development projects. Our Sheffield-based service connects you with specialist lenders who understand the South Yorkshire property market.
Mezzanine finance is a form of second charge lending that allows you to access additional equity in your property without refinancing your existing first charge mortgage. This subordinate debt sits behind the primary lender and provides a flexible way to raise capital when remortgaging isn't suitable or cost-effective.
This type of finance is particularly valuable for property investors and developers who have equity locked in properties but don't want to disturb favorable existing mortgage arrangements. Mezzanine finance can be used to fund deposits on new acquisitions, finance development projects, or release capital for other business purposes while maintaining your current mortgage terms.
Our mezzanine finance solutions come from specialist lenders who understand complex capital structures and can work alongside existing lenders. While mezzanine finance typically carries higher interest rates than first charge lending (reflecting the increased risk position), it offers unmatched flexibility and speed compared to traditional refinancing routes.
Mezzanine finance is a second charge loan that sits behind your existing mortgage, whereas remortgaging replaces your current mortgage entirely. Mezzanine finance allows you to access equity while keeping your existing mortgage intact - valuable if you have a competitive fixed rate, would face early repayment charges, or have a mortgage that couldn't be replicated today. However, mezzanine finance typically has higher rates than first charge lending.
In most cases, yes. The second charge lender will need to inform your first charge lender and may require their formal consent, though this is often a formality. Your existing mortgage agreement likely contains restrictions on further borrowing, so the second charge lender will check these terms. Some modern mortgages have standard consent clauses that allow second charges without formal permission.
Mezzanine finance costs include an arrangement fee (typically 1-3%), a valuation fee, legal fees for both you and the lender, and potentially a fee for registering the second charge. Interest rates are higher than first charge lending, typically ranging from 0.75% to 1.5% per month depending on LTV, term, and loan purpose. You'll maintain costs on both your first and second charge loans.
Mezzanine finance can be used for most property-related purposes including purchasing additional properties, funding development or refurbishment projects, raising business capital, or consolidating debts. However, lenders will want to understand how the funds will be used and may have restrictions. Personal use or high-risk ventures may face more limited options or higher rates.