Exhibit 10.4



                               Dated 26 May 2004
                               -----------------



                        GRANITE FINANCE FUNDING LIMITED
                                  as Funding



                               NORTHERN ROCK PLC
                   as Current Issuer Start-Up Loan Provider



                                    - and -



                             THE BANK OF NEW YORK
                              as Security Trustee












               _________________________________________________

                      ISSUER 04-2 START-UP LOAN AGREEMENT
               _________________________________________________













                          SIDLEY AUSTIN BROWN & WOOD
                               WOOLGATE EXCHANGE
                             25 BASINGHALL STREET
                                LONDON EC2V 5HA
                            TELEPHONE 020 7360 3600
                            FACSIMILE 020 7626 7937


<PAGE>

                                   CONTENTS


1.    Definitions and Interpretation..........................................1

2.    The Advance.............................................................1

3.    Interest................................................................2

4.    Repayment...............................................................2

5.    Acceleration............................................................3

6.    Payments and limited recourse...........................................3

7.    Subordination and Security..............................................3

8.    Notices.................................................................5

9.    Taxes...................................................................5

10.   Remedies and Waivers....................................................6

11.   Assignments and Transfer................................................6

12.   Alternative Payment Arrangements........................................6

13.   Security Trustee as a Party.............................................6

14.   No Partnership..........................................................7

15.   Variation...............................................................7

16.   Execution in Counterparts; Severability.................................7

17.   Third Party Rights......................................................7

18.   Governing Law and Jurisdiction; Process Agents; Appropriate Forum.......7

SCHEDULE 1  REPRESENTATIONS AND WARRANTIES                                    8


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<PAGE>

THIS ISSUER 04-2 START-UP LOAN AGREEMENT is made on 26 May 2004

BETWEEN:

(1)  GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
     limited company incorporated under the laws of Jersey but acting out of
     its branch office established in England (registered overseas company
     number FC022999 and branch number BR005916) at 69 Park Lane, Croydon CR9
     1TQ as Funding;

(2)  NORTHERN ROCK PLC (registered number 3273685), a public limited company
     incorporated under the laws of England and Wales whose registered office
     is at Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL in its
     capacity as Current Issuer Start-Up Loan Provider; and

(3)  THE BANK OF NEW YORK, whose principal office is at 48th Floor, One Canada
     Square, London E14 5AL in its capacity as Security Trustee.

IT IS HEREBY AGREED as follows:

1.   Definitions and Interpretation

1.1  The provisions of:

     (a)  the Master Definitions Schedule as amended and restated by (and
          appearing in Appendix 1 to) the Master Definitions Schedule Eighth
          Amendment and Restatement Deed made on 26 May 2004 between, among
          others, the Seller, Funding and the Mortgages Trustee, and

     (b)  the Issuer Master Definitions Schedule signed for the purposes of
          identification by Sidley Austin Brown & Wood and Allen & Overy LLP
          on 26 May 2004,

     (as the same have been and may be amended, varied or supplemented from
     time to time with the consent of the parties hereto) are expressly and
     specifically incorporated into and shall apply to this Agreement. The
     Issuer Master Definitions Schedule specified above shall prevail to the
     extent that it conflicts with the Master Definitions Schedule.

2.   The Advance

     The Current Issuer Start-Up Loan Provider grants to Funding
     simultaneously with the issue by the Current Issuer of the Current Issuer
     Notes (and upon the simultaneous issuance by the Current Issuer to
     Funding of the Current Issuer Intercompany Loan) and upon the terms and
     subject to the conditions hereof, a loan in an aggregate amount of
     (GBP)61,600,000 (Sixty One Million Six Hundred Thousand) (the "Advance")
     on the Closing Date for the purposes of providing for the partial funding
     of the Issuer Reserve Fund and providing for Funding's costs and expenses
     in respect of the increase of the Funding Share of the Trust Property and
     in respect of amounts payable to the Current Issuer by Funding as fees
     under the Current Issuer Intercompany Loan. The Advance shall be paid
     into the Funding Transaction Account.



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<PAGE>

3.   Interest

3.1  The Advance and any interest capitalised pursuant to Clause 3.4 will bear
     interest in accordance with Clause 3.3 at a rate of LIBOR for three-month
     sterling deposits plus 0.90 % per annum from (and including) the Closing
     Date until the Advance and all accrued interest thereon is repaid in
     full. Prior to the service of an Intercompany Loan Enforcement Notice,
     Funding shall pay interest on the Advance on each Payment Date if, and
     only to the extent that, there are Funding Available Revenue Receipts
     available therefor after making the payments and provisions referred to
     in the Funding Pre-Enforcement Revenue Priority of Payments.

3.2  Subject to Clauses 6.2 and 6.3, interest on the Advance and any interest
     capitalised pursuant to Clause 3.4 will be payable by Funding in arrear
     on each Payment Date in accordance with the Funding Priority of Payments.

3.3  Interest shall be calculated by reference to any Interest Period on the
     basis of the actual number of days elapsed and a 365 day year (or, in the
     case of a leap year, a 366 day year).

3.4  Any interest accrued in respect of an Interest Period but not paid on the
     Payment Date relating thereto shall be capitalised forthwith.

4.   Repayment

4.1  Prior to the service of an Intercompany Loan Enforcement Notice, Funding
     shall repay principal of the Advance (including any interest capitalised
     pursuant to Clause 3.4) on each Payment Date if, and only to the extent
     that, there are Funding Available Revenue Receipts available therefor
     after making the payments and provisions referred to in the Funding
     Pre-Enforcement Revenue Priority of Payments.

4.2  The Cash Manager is responsible, pursuant to the Cash Management
     Agreement, for determining the amount of Funding Available Revenue
     Receipts as at any Payment Date and each determination so made shall (in
     the absence of negligence, wilful default, bad faith or manifest error)
     be final and binding on the Current Issuer Start-Up Loan Provider.

4.3  Subject to Clauses 5, 6.2, 6.3 and 7, on any Payment Date on which all
     the Intercompany Loans have been repaid in full, Funding shall
     immediately repay the Advance (including any interest capitalised
     pursuant to Clause 3.4) and pay any accrued interest.

4.4  The Current Issuer Start-Up Loan Provider hereby acknowledges that
     Funding has entered into Previous Start-Up Loan Agreements with Previous
     Start-Up Loan Providers and that from time to time Funding may enter into
     New Start-Up Loan Agreements with New Start-Up Loan Providers and that
     the obligation of Funding to repay the Current Issuer Start-Up Loan, any
     other existing Start-Up Loans and any New Start-Up Loan will rank pari
     passu and will be paid pro rata between themselves. The Current Issuer
     Start-Up Loan Provider further acknowledges that the Funding
     Pre-Enforcement Revenue Priority of Payments and the Funding
     Post-Enforcement Priority of Payments set out in the Funding Deed of
     Charge, respectively, will be amended to reflect the entry by Funding
     into New Start-Up Loan


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<PAGE>

     Agreements and related agreements from time to time and agrees to execute
     such documents as are necessary or required by the Rating Agencies for
     the purpose of including the New Start-Up Loan Provider (and any other
     relevant party) in the Transaction Documents to effect those amendments.

5.   Acceleration

     If an Intercompany Loan Enforcement Notice is served, the Advance
     (including any interest capitalised pursuant to Clause 3.4) and accrued
     interest shall, subject to the Funding Deed of Charge, become immediately
     due and payable.

6.   Payments and limited recourse

6.1  All payments to be made hereunder by Funding shall be made in sterling in
     immediately available cleared funds to the Current Issuer Start-Up Loan
     Provider's account as specified in writing to Funding for this purpose.
     If any sum falls due hereunder otherwise than on a London Business Day,
     it shall be paid on the next succeeding London Business Day.

6.2  Prior to service of an Intercompany Loan Enforcement Notice or repayment
     in full of all the Intercompany Loans, amounts of interest, principal and
     any other amounts due hereunder shall be paid only in accordance with
     Clauses 3.1, 4.1 and 7.1, respectively, and the provisions of the Funding
     Deed of Charge.

6.3  If, upon the Advance becoming due and payable pursuant to Clauses 4.3 or
     5, Funding has insufficient funds available to meet its obligations
     hereunder in full on such date then:

     (a)  Funding shall utilise its funds on such date to the extent available
          in making payments to the Current Issuer Start-Up Loan Provider to
          repay the Advance (including any interest capitalised pursuant to
          Clause 3.4) and accrued interest thereon; and

     (b)  the obligations of Funding to pay the shortfall together with any
          amounts falling due and payable thereafter shall on any day be
          limited to the available funds actually received by Funding from
          time to time subsequent to such date, together with the proceeds of
          the enforcement of the security, paid to the Current Issuer Start-Up
          Loan Provider pursuant to Clause 8 (Upon Enforcement) of the Funding
          Deed of Charge,

     provided that the Current Issuer Start-Up Loan Provider shall not release
     Funding from Funding's obligation to pay the remaining amount that would
     have been due under this Agreement had this Clause 6.3 not applied.

7.   Subordination and Security

7.1  The parties hereby agree that repayments in respect of the Advance shall
     be subordinated to, inter alia, payments of principal and interest on the
     Current Issuer Intercompany Loan and all other payments or provisions
     ranking in priority to payments to be made to the Current Issuer Start-Up
     Loan Provider under this


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<PAGE>

     Agreement in accordance with the Funding Priority of Payments and the
     Funding Deed of Charge.

7.2  The Current Issuer Start-Up Loan Provider further agrees that, without
     prejudice to Clause 8 (Upon Enforcement) of the Funding Deed of Charge,
     its rights against Funding under this Agreement are limited to the extent
     that Funding has sufficient assets to meet the Current Issuer Start-Up
     Loan Provider's claim or any part thereof having taken into account all
     other liabilities, both actual and contingent, of Funding which pursuant
     to the Funding Deed of Charge rank pari passu with or in priority to its
     liabilities to the Current Issuer Start-Up Loan Provider under this
     Agreement and so that Funding shall not be obliged to make any payment to
     the Current Issuer Start-Up Loan Provider hereunder if and to the extent
     that the making of such payment would cause Funding to be or become
     unable to pay its debts within the meaning of Section 123 of the
     Insolvency Act 1986. However, if there are Funding Available Revenue
     Receipts available but Funding does not repay the Advance (including any
     interest capitalised pursuant to Clause 3.4) and/or interest thereon when
     due (to the extent of such available Funding Available Revenue Receipts),
     such non-repayment will constitute an event of default under this Current
     Issuer Start-Up Loan Agreement.

7.3  Funding undertakes that its obligations to the Current Issuer Start-Up
     Loan Provider hereunder shall at all times be secured by the Funding Deed
     of Charge.

7.4  The Current Issuer Start-Up Loan Provider hereby undertakes to be bound
     by the terms of the Funding Deed of Charge and the Cash Management
     Agreement and in particular agrees that on enforcement of the security
     created by the Funding Deed of Charge, all amounts of principal, interest
     and any other amounts due hereunder shall rank in the order of priority
     set out in the Funding Post-Enforcement Priority of Payments.

7.5  The Current Issuer Start-Up Loan Provider further covenants that, except
     as permitted under the Funding Deed of Charge, it will not set off or
     claim to set off the Advance or any interest thereon or any part thereof
     against any liability owed by it to Funding.

7.6  The Current Issuer Start-Up Loan Provider undertakes that it will not,
     for so long as any sum is outstanding under any Intercompany Loan
     Agreement of any Issuer or for two years plus one day since the last day
     on which any such sum was outstanding take any corporate action or other
     steps or legal proceedings for the winding up, dissolution or
     reorganisation or for the appointment of a receiver, administrator,
     administrative receiver, trustee, liquidator, sequestrator or similar
     officer of Funding or of any or all of the revenues and assets of Funding
     nor participate in any ex parte proceedings nor seek to enforce any
     judgment against Funding, except as permitted under the provisions of the
     Funding Deed of Charge.

7.7  The Current Issuer Start-Up Loan Provider acknowledges hereby that it is
     not entitled, other than by virtue of Section 208 of the Income and
     Corporation Taxes Act 1988 ("ICTA"), to any exemption from Tax in respect
     of any interest payable to it under this Agreement.

7.8  The Current Issuer Start-Up Loan Provider further represents that,
     pursuant to Section 212 of ICTA, any interest payable to it under this
     Agreement is paid to it within the charge to UK corporation tax.



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7.9  The Current Issuer Start-Up Loan Provider further represents that it is
     an institution which is a bank for the purposes of Section 840A of ICTA.

7.10 Each party to this Agreement other than the Security Trustee hereby makes
     the representations and warranties to each of the other parties to this
     Agreement that are specified in Schedule 1 hereto.

8.   Notices

     Any notices to be given pursuant to this Agreement or to any of the
     parties hereto shall be sufficiently served if sent by prepaid first
     class post or by facsimile transmission and shall be deemed to be given
     (in the case of facsimile transmission) when despatched, (where delivered
     by hand) on the day of delivery if delivered before 17.00 hours on a
     Business Day or on the next Business Day if delivered thereafter or (in
     the case of first class post) when it would be received in the ordinary
     course of the post and shall be sent:

     (a)  in the case of Funding, to Granite Finance Funding Limited, 69 Park
          Lane, Croydon CR9 1TQ (facsimile number 020 8409 8911 for the
          attention of the Company Secretary with a copy to Northern Rock plc,
          Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL
          Facsimile: 0191 213 2203 for the attention of the Group Secretary;

     (b)  in the case of the Current Issuer Start-Up Loan Provider, to
          Northern Rock plc, Northern Rock House, Gosforth, Newcastle upon
          Tyne NE3 4PL Facsimile: 0191 213 2203 for the attention of the Group
          Secretary; and

     (c)  in the case of the Security Trustee, to The Bank of New York (London
          Branch), 48th Floor, One Canada Square, London E14 5AL (facsimile
          020 7964 6399) for the attention of Corporate Trust Administration,

     or to such other address or facsimile number as may from time to time be
     notified by any party to the other by written notice in accordance with
     the provisions of this Clause 8.

9.   Taxes

9.1  All payments to be made by Funding to the Current Issuer Start-Up Loan
     Provider hereunder shall be made free and clear of and without deduction
     for or on account of Tax unless Funding is required by law to make such a
     payment subject to the deduction or withholding of Tax, in which case
     Funding shall promptly upon becoming aware thereof notify the Current
     Issuer Start-Up Loan Provider of such obligation, and shall make such
     payments subject to such deduction or withholding of Tax which it is
     required to make.

9.2  If Funding makes any payment hereunder in respect of which it is required
     to make any deduction or withholding, it shall pay the full amount
     required to be deducted or withheld to the relevant taxation or other
     authority within the time allowed for such payment under applicable law
     and shall deliver to the Current Issuer Start-Up Loan Provider, within
     thirty days after such payment falls due to the applicable authority,


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<PAGE>

     any original receipt (or a certified copy thereof) issued by such
     authority evidencing such payment.

10.  Remedies and Waivers

     No failure by the Current Issuer Start-Up Loan Provider to exercise, nor
     any delay by the Current Issuer Start-Up Loan Provider in exercising, any
     right or remedy hereunder shall operate as a waiver thereof, nor shall
     any single or partial exercise of any right or remedy prevent any further
     or other exercise thereof or the exercise of any other right or remedy.
     The rights and remedies herein provided are cumulative and not exclusive
     of any rights or remedies provided by law.

11.  Assignments and Transfer

11.1 Funding (other than in respect of any assignment by way of security
     pursuant to the Funding Deed of Charge or under any Deed of Accession)
     may not assign and/or transfer any of its rights and/or obligations under
     this Agreement. The Current Issuer Start-Up Loan Provider may not assign
     and/or transfer its rights under this Agreement without obtaining the
     prior written consent of Funding, provided that such consent may only be
     given if such assignment and/or transfer is by way of security, or, if
     such assignment and/or transfer is to a person within the charge to
     United Kingdom corporation tax as regards any interest received by it
     under this Agreement. Any such assignee or transferee must agree to be
     bound by the provisions contained in the Funding Deed of Charge as if it
     were named as an original party thereto in place of the Current Issuer
     Start-Up Loan Provider.

11.2 If there is any change in the identity of the Security Trustee pursuant
     to the terms of the Funding Deed of Charge, the Current Issuer Start-Up
     Loan Provider and Funding shall execute such documents and take such
     actions as the new security trustee and the outgoing security trustee (as
     the case may be) may reasonably require for the purpose of vesting in the
     new security trustee the rights and obligations of the outgoing security
     trustee and releasing the outgoing security trustee (as the case may be)
     from its future obligations under this Agreement.

12.  Alternative Payment Arrangements

     If at any time it shall become impracticable for Funding to make any
     payments hereunder in the manner specified in Clause 6.1, then Funding
     may agree with the Current Issuer Start-Up Loan Provider and the Security
     Trustee alternative arrangements for such payments to be made.

13.  Security Trustee as a Party

     The Security Trustee has agreed to become a party to this Agreement for
     the better preservation and enforcement of its rights under this
     Agreement and the Security Trustee shall assume no obligations or
     liabilities whatsoever to the Current Issuer Start-Up Loan Provider or to
     Funding. Furthermore, any liberty or power which may be exercised or any
     determination which may be made hereunder by the Security Trustee may be
     exercised or made in the Security Trustee's absolute discretion without
     any obligation to give reasons therefor, but in any event must be
     exercised or made in accordance with the provisions of the Funding Deed
     of Charge.



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<PAGE>

14.  No Partnership

     Nothing in this Agreement (or in any of the arrangements contemplated
     hereby) shall, or shall be deemed to, constitute a partnership amongst
     the parties hereto.

15.  Variation

     No variation of this Agreement shall be effective unless it is in writing
     and signed by or on behalf of each of the parties hereto.

16.  Execution in Counterparts; Severability

16.1 This Agreement may be executed in any number of counterparts (manually or
     by facsimile) and by different parties hereto in separate counterparts,
     each of which when so executed shall be deemed to be an original and all
     of which when taken together shall constitute one and the same
     instrument.

16.2 Where any provision in or obligation under this Agreement shall be
     invalid, illegal or unenforceable in any jurisdiction, the validity,
     legality and enforceability of the remaining provisions or obligations
     under this Agreement, or of such provision or obligation in any other
     jurisdiction, shall not be affected or impaired thereby.

17.  Third Party Rights

     A person who is not a party to this Agreement may not enforce any of its
     terms under the Contracts (Rights of Third Parties) Act 1999, but this
     shall not affect any right or remedy of a third party which exists or is
     available apart from that Act.

18.  Governing Law and Jurisdiction; Process Agents; Appropriate Forum

18.1 Governing Law: This Agreement is governed by, and shall be construed in
     accordance with, English law.

18.2 Jurisdiction: Each of the parties hereto irrevocably agrees that the
     courts of England are to have jurisdiction to settle any suit, action or
     proceeding and to settle any disputes which may arise out of or in
     connection with this Agreement and, for such purposes, irrevocably submit
     to the jurisdiction of such courts.

18.3 Process Agents: Funding irrevocably and unconditionally appoints Mourant
     & Co. Capital (SPV) Limited at 69 Park Lane, Croydon CR9 1TQ or otherwise
     at the registered office of Mourant & Co. Capital (SPV) Limited for the
     time being as its agent for service of process in England in respect of
     any proceedings in respect of this Agreement and undertakes that in the
     event of Mourant & Co. Capital (SPV) Limited ceasing so to act it will
     appoint another person with a registered office in London as its agent
     for service of process.

18.4 Appropriate Forum: Each of the parties hereto irrevocably waives any
     objection which it might now or hereafter have to the courts of England
     being nominated as the forum to hear and determine any Proceedings and to
     settle any disputes, and agrees not to claim that any such court is not a
     convenient or appropriate forum.



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                                  SCHEDULE 1
                        REPRESENTATIONS AND WARRANTIES

Each party to the Current Issuer Start-Up Loan Agreement (the "Agreement")
hereby makes the following representations and warranties to each of the other
parties to such Agreement:

1.   Status: It is duly incorporated, validly existing and registered under
     the laws of the jurisdiction in which it is incorporated, capable of
     being sued in its own right and not subject to any immunity from any
     proceedings, and it has the power to own its property and assets and to
     carry on its business as it is being conducted.

2.   Powers and authority: It has the power to enter into, perform and
     deliver, and has taken all necessary corporate and other action to
     authorise the execution, delivery and performance by it of the Agreement,
     which has been duly executed and delivered by it.

3.   Legal validity: The Agreement constitutes, or when executed in accordance
     with its terms will constitute, its legal, valid and binding obligation.

4.   Non-conflict: The execution by it of the Agreement and the exercise by it
     of its rights and the performance of its obligations under the Agreement
     will not:

     (a)  result in the existence or imposition of, nor oblige it to create,
          any Security Interest in favour of any person over all or any of its
          present or future revenues or assets save for any which are created
          under or pursuant to the Funding Deed of Charge;

     (b)  conflict with any document which is binding upon it or any of its
          assets;

     (c)  conflict with its constitutional documents; or

     (d)  conflict with any law, regulation or official or judicial order of
          any government, governmental body or court, domestic or foreign,
          having jurisdiction over it.

5.   No litigation: It is not a party to any material litigation, arbitration
     or administrative proceedings and, to its knowledge, no material
     litigation, arbitration or administrative proceedings are pending or
     threatened against it.

6.   Consents and Licences: All governmental consents, licences and other
     approvals and authorisations required in connection with the entry into,
     performance, validity and enforceability of, the transaction contemplated
     by the Agreement have been obtained or effected (as appropriate) and are
     in full force and effect.



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                                EXECUTION PAGE

<TABLE>
<CAPTION>

<S>                                                                             <C>
Funding

Executed by
GRANITE FINANCE FUNDING LIMITED
as follows:
Signed for and on its behalf by one of its duly                               By __________________________________
authorised attorneys/signatories                                                 Duly Authorised Attorney/Signatory

                                                                            Name __________________________________





The Current Issuer Start-Up Loan Provider

Executed by
NORTHERN ROCK PLC
as follows:
Signed for and on its behalf by one of its duly                               By __________________________________
authorised attorneys/signatories                                                 Duly Authorised Attorney/Signatory

                                                                            Name __________________________________




The Security Trustee

Executed by
BANK OF NEW YORK
as follows:
Signed for and on its behalf by one of its duly                               By __________________________________
authorised attorneys/signatories                                                 Duly Authorised Attorney/Signatory

                                                                            Name __________________________________

</TABLE>








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