How Charge Priority Works
When a lender registers a charge against your property at the Land Registry, that charge is given a priority date. In the event of a forced sale following default, the proceeds are distributed in strict order of charge priority: the first charge lender takes what they are owed, the second charge lender takes what remains (if anything), and the third charge lender takes whatever is left after that.
For a third charge lender, this creates significant risk — particularly in a falling property market or at a high combined LTV. If your property is worth £300,000, your first mortgage is £180,000, and your second charge is £40,000, a third charge lender sees only £80,000 of equity above the prior charges. If property values fall 10%, that equity cushion shrinks to £50,000. The third charge lender's security is therefore inherently more fragile than the first or second charge lender's.
First and second charge lenders must also give their consent before a third charge can be registered. Your first mortgage lender's consent to a second charge does not automatically extend to consenting to a third charge — a separate consent request must be made. Some lenders will decline consent for a third charge even where they approved a second charge, depending on their current lending appetite and your account conduct.
Lenders Who Consider Third Charges
Together Money is the most consistently active lender in the third charge space for residential properties. They assess each case on its merits, looking at the combined LTV across all charges, the borrower's income and credit history, and the purpose of the borrowing. Together Money's rates for third charge cases typically start in the 14–18% range and can reach 22% or above for more complex cases.
Beyond Together Money, the market thins considerably. Some specialist bridging lenders will consider a short-term third charge where a clear exit is available — typically a sale or remortgage — within twelve months. Private lending syndicates and family office lenders occasionally operate in this space for larger loan amounts. For most standard residential borrowers, the market is effectively Together Money and a small number of niche specialists accessed through a broker with specific expertise in complex charge structures.
Combined LTV is critical. Most lenders operating in the third charge market will not go above 70–75% combined LTV across all three charges. In practice, this means a substantial amount of unencumbered equity must exist in the property before a third charge is viable. If your combined LTV on the first and second charge is already at 70%, a third charge is effectively off the table with most lenders.
