First charge

A first charge (or first-charge mortgage) is a loan secured with first-ranking priority over the home. If the home is sold or repossessed and the sale proceeds have to be shared among secured creditors, the first-charge lender is paid before later-ranking secured lenders.

“Charge” is everyday UK mortgage language. In Scotland, the usual legal instrument that creates that security is a standard security, not an English-style “legal charge”. Product brochures and brokers still say “first charge mortgage” across the UK; on a Scottish title that usually means a first-ranking standard security registered against the property.

Ranking in plain terms

Where more than one security sits over the same home, ranking is the order of priority. In Scotland, standard securities normally rank by the date they are registered (or recorded) in the property registers, unless the parties have agreed a different order in the deeds or in a separate ranking agreement.

So “first charge” is about who stands first in line, not about the size of the loan or which lender’s brand is better known.

First charge vs later-ranking security

A second charge (sometimes marketed as a second-charge mortgage or a secured/homeowner loan) is separate borrowing secured against the same home that ranks behind the first charge. A further advance from the existing first-charge lender may increase that lender’s loan without creating a new, separate second ranking — the detail sits in the lender’s documents and any registered variation.

What a first-time buyer has

On a typical Scottish purchase, the mortgage used to buy the home is almost always the first charge: the buyer grants a standard security to the purchase lender, and that security is registered so it has first-ranking priority (subject to any special ranking notes on the title).

On a later remortgage, the usual pattern is that the old first-ranking security is discharged and a new standard security is granted and registered for the new lender, again aiming for first ranking. Exact steps depend on the lenders and the conveyancing.

Where it shows on the title

Outstanding securities appear in the Securities section of the Land Register title sheet (that section was formerly called the Charges section). Ranking notes can also appear there where deeds or ranking agreements change the default order.

Registers of Scotland keep the official record. Your solicitor reviews the title sheet and securities entries as part of purchase conveyancing.

Sources

Disclaimer

Information for Scotland first-time buyers only. Not personal financial, mortgage, or legal advice. Check current Registers of Scotland practice, primary legislation, and advice from your own solicitor or regulated adviser for your situation.

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