What does tacking refer to in the context of mortgage charges?

What does tacking refer to in the context of mortgage charges?

• A. The use of drawdown facility
• B. The priority of charges in relation to multiple borrowings
• C. The practice of increasing interest rates over time
• D. The early repayment charges

Answer: (B)

Tacking is about how a later borrowing can be secured on the same property and treated for priority as part of the original security. In property finance, the order in which debts are repaid from the sale proceeds usually follows when the charges were created, so older charges have priority. By tacking, a subsequent advance can be attached to the existing charge, so it shares the same priority as the original loan rather than becoming a separate, lower-priority debt. This is why it’s described as the priority of charges in relation to multiple borrowings. It isn’t about drawdown facilities, rising interest rates, or early repayment charges.

Tacking is about how a later borrowing can be secured on the same property and treated for priority as part of the original security. In property finance, the order in which debts are repaid from the sale proceeds usually follows when the charges were created, so older charges have priority. By tacking, a subsequent advance can be attached to the existing charge, so it shares the same priority as the original loan rather than becoming a separate, lower-priority debt. This is why it’s described as the priority of charges in relation to multiple borrowings. It isn’t about drawdown facilities, rising interest rates, or early repayment charges.