Senior debt has priority over specified other debt under the relevant legal arrangements. Seniority depends on the documents and structure; it is not established solely by describing an underlying property loan as first-mortgage secured.
For property-secured lending, senior debt typically means a registered first mortgage. The lender holds the first-ranking charge on title and has priority over second mortgages, caveats, unregistered interests and unsecured creditors.
Senior debt prices lower than subordinated debt because the risk position is materially safer, for an asset to lose value below the senior debt amount, every layer below it (equity, mezz, second mortgages) has to be wiped out first. The trade-off is yield: senior debt yields are lower because the risk is lower.