What is a first mortgage?

A First Mortgage (sometimes called first charge) refers to the first mortgage taken out on a property by the current homeowners in situations where more than one mortgage has been taken out on a property. Most high street lenders and Building Societies only accept first mortgages.

Sometimes there is more than one mortgage on a property. In the event of a default by the borrower, the holder of the first mortgage will be repaid first by the proceeds of a sale. If there is a second mortgage holder, they will be paid with any remaining proceeds. This also creates a Lien, which has first priority over all other voluntary liens.