Bridging Refinance FAQs: 30 Common Questions Answered
The most frequently asked questions about bridging finance and refinancing a bridging loan — answered clearly, without jargon.
About Bridging Loans
What is a bridging loan? A bridging loan is a short-term, property-secured loan used to "bridge" a funding gap. It runs for 1–24 months and is repaid in a lump sum — usually from a sale or a longer-term mortgage. Unlike a mortgage, you don't make monthly repayments; interest is typically rolled up or retained. See our full guide: What Is Bridging Finance?
How quickly can a bridging loan complete? A straightforward residential bridge can complete in 5–10 working days with all paperwork in place. Complex commercial deals or development projects typically take 3–6 weeks. Regulated bridging (on your home) takes longer due to FCA compliance requirements.
What is the maximum LTV for a bridging loan? Standard maximum LTVs: 70–75% on residential, 60–65% on commercial, 55–65% on land. Higher LTVs (up to 100%) are possible with additional security — for example, cross-charging another property you own. See LTV vs LTC Explained for how lenders calculate these ratios.
How much does a bridging loan cost? Interest rates typically run from 0.55% to 1.25% per month. On top of that: arrangement fee (1–2%), broker fee (1–2%), legal costs (yours and the lender's), and valuation. For a complete breakdown with worked examples, see Property Finance Fees Explained.
Can I get a bridging loan with bad credit? Yes. Bridging loans are asset-backed — lenders focus on the property security and your exit strategy, not your credit score. CCJs, defaults, and previous arrears are not automatic declines. Severity, recency, and reason matter more than the number.
Do I need to prove my income? For most commercial bridging (investment or development property), income is not assessed. Interest is rolled up or retained, so there's no monthly payment to service. For regulated bridging on a property you live in, affordability rules apply.
What property types can be bridged? Residential (houses, flats, HMOs), commercial (offices, retail, mixed-use), land (with or without planning), and even uninhabitable properties that standard mortgage lenders won't touch. Bridging is specifically useful for properties in unusual condition or with title complications.
Can a limited company take a bridging loan? Yes — most lenders actively lend to limited companies and SPVs. The underwriting focuses on the property and exit, not the company's balance sheet. Personal guarantees are typically required.
What is first charge vs second charge bridging? First charge means the bridging lender holds the primary security over the property. Second charge means an existing mortgage remains in place and the bridge sits behind it. Second charge bridges are possible but attract higher rates and lower LTVs, and require consent from the first charge lender.
What is the difference between open and closed bridging? A closed bridge has a fixed, confirmed repayment date — for example, a sale that has exchanged with a set completion date. An open bridge has no fixed repayment date, with repayment expected within the term. Closed bridges attract slightly lower rates because the exit is certain.
About Exit Strategies
What is an exit strategy and why does it matter? The exit strategy is how you plan to repay the bridging loan. It's the single most important factor lenders assess. Common exits: sell the property, refinance onto a term mortgage, or repay from another source of capital. Vague or unsubstantiated exits lead to declined applications or higher rates.
What happens if my exit doesn't work out in time? Contact your lender as early as possible. Options include: negotiating an extension with your existing lender, rebridging onto a new bridge from a different lender, or selling the property to repay. See our full guide: Missed Exit Deadline: Rescue Refinance Options.
Can I sell the property as my exit if it's not yet on the market? Lenders will want evidence that the sale is credible — a formal valuation, agent appraisals, or a sale already agreed. A property that isn't listed yet and has no marketing activity is a weaker exit than one that's actively on the market.
Can a refinance mortgage be my exit? Yes — this is the most common exit for property investors. The lender will want to see that you're likely to qualify for the term mortgage. A mortgage in principle or Decision in Principle (DIP) from a mortgage lender is the strongest evidence.
What if my exit mortgage is declined mid-term? This is a common scenario. Options: apply to a different mortgage lender, or rebridge while the new mortgage application progresses. Act immediately rather than waiting — the earlier you address it, the more options you have.
About Refinancing a Bridging Loan
Can I refinance an existing bridging loan? Yes — this is possible and regularly done. You can refinance onto a new bridge (rebridging), a BTL or commercial mortgage, or development exit finance. The full options are covered in Can You Refinance an Existing Bridging Loan?
What is rebridging? Rebridging means replacing one bridging loan with another. It's used when the original exit has stalled and you need more time. The new lender repays the old lender and starts a new term. See What Is Rebridging? for a detailed explanation of costs, criteria, and when to do it.
How long does it take to rebridge? A straightforward residential rebridge can complete in 5–10 working days. The timeline is driven by valuation (1–2 weeks to instruct and complete), legal work (simultaneous redemption and new charge), and lender processing. Using a broker familiar with rescue timelines compresses this significantly.
Is it harder to rebridge than to get a new bridging loan? Not necessarily — lenders are accustomed to bridging existing bridges. The main differences: you need a redemption statement from the existing lender, the exit strategy needs to be credible (especially if it's the same exit that failed previously), and the title work is slightly more complex due to the simultaneous charge discharge.
What is development exit finance and when does it apply? Development exit finance is a type of bridge used when a development project is nearing completion but the developer hasn't yet sold or refinanced the units. It repays the development finance loan and gives the developer time to sell without the pressure of development finance rates. Available from ~70% of GDV for residential schemes.
What is the difference between a bridging loan and a remortgage? A bridging loan is short-term (1–24 months), higher cost, and assessed primarily on the property and exit. A remortgage is a long-term product (typically 2–25 years), assessed on income and affordability, and requires the property to be in mortgageable condition. Bridging is used when a remortgage isn't immediately available; the bridge then exits onto the remortgage. Full comparison: Remortgaging After Bridging Finance.
About the Process
How does the application process work? Typically: (1) initial enquiry and terms agreed in principle; (2) valuation instructed; (3) formal offer issued; (4) legal work carried out; (5) funds released. A broker manages steps 1–3 and coordinates steps 4–5.
Do I need a solicitor for a bridging loan? Yes — you need your own independent solicitor to act on your behalf. The lender also has their solicitors, and their costs are passed to you. Don't use a solicitor who also acts for the lender on the same transaction — it creates a conflict.
What documents do I need? Typically: proof of ID and address, proof of property ownership (or purchase details if acquiring), schedule of works (for refurbishment/development), exit strategy evidence, and for companies: certificate of incorporation and recent accounts. Lenders may ask for more depending on the deal complexity.
Who instructs the valuation? The lender instructs their approved panel valuer. You pay for it upfront, and it's non-refundable if the deal doesn't proceed. On complex projects, lenders may require a Quantity Surveyor (QS) report as well.
Can I use the same solicitor for multiple bridging loans? Yes — you can use any qualified solicitor, provided they're independent from the lender. Using a solicitor familiar with bridging transactions saves time as they know what the lender's solicitors will need.
About Costs and Rates
Why is my actual rate higher than the headline rate I was quoted? The headline rate is the monthly interest rate. The true cost of funds includes arrangement fees, exit fees, broker fees, legal costs, and valuation — which can add 3–5% to the total cost. Always ask for a full cost illustration, not just the rate. See Property Finance Fees Explained.
What is the difference between rolled-up and retained interest? Rolled-up interest is added to your loan balance each month — you pay nothing until redemption, but owe more. Retained interest is deducted upfront — you receive less, but repay only the original loan. Both are common; the right choice depends on whether you need maximum funds upfront or expect to repay early. Full explanation: Rolled-Up vs Retained Interest.
Is bridging finance regulated? Bridging loans on investment property, commercial property, or development projects are not regulated. Bridging loans secured on your home (where you live or intend to live) are regulated by the FCA — this affects the lender's obligations, affordability checks, and your rights as a borrower.
Are there early repayment charges on bridging loans? Most bridging loans do not have traditional early repayment charges — you can repay when your exit completes. However, some lenders charge a minimum interest period (e.g., minimum 3 months of interest, even if you repay in month 1). Check the facility letter carefully.
Still have questions?
Every deal is different. If your situation isn't covered here, speak to our team directly. We're happy to answer questions about bridging finance and refinancing without any obligation.