Bridging Loans for Refurbishment Projects: Costs and Requirements

Refurbishment projects move faster than mortgage finance can keep up with. A property bought at auction, a tired buy to let that needs modernising before it can be let, or a conversion a high street lender won't touch in its current state all need finance that completes in days rather than months. This page covers what refurbishment bridging costs, who qualifies, and how the application actually works.

How does refurbishment bridging support a project?

It's short-term secured lending that funds the purchase, the works, or both, with your exit repaying it at the end of the term.

It exists because most mainstream lenders won't lend against a property that's uninhabitable, unmortgageable or mid-renovation. A bridging lender takes a more practical view, looking at what the property will be worth once the works are done alongside what it's worth now. That lets finance flow at the exact point in a project when it's hardest to get.

How is it different from a mortgage?

• Speed. Decisions can often be arranged within 24 to 48 hours, with funds following in days or weeks rather than months.
• Property condition. Lenders will fund properties with no kitchen or bathroom, a missing roof, or no mortgageable certificate, all of which a mainstream lender declines outright.
• What's assessed. The security property and your exit strategy, rather than income multiples.

The trade is cost and term. It's priced higher than a mortgage and designed to be short, usually one month to two years, with the expectation that it's replaced by cheaper long-term finance or repaid from a sale.

Light or heavy: which is your project?

The distinction matters because it changes the pricing, the lender pool and how the money is released.

Light refurbishment is cosmetic and non-structural. New kitchen or bathroom, rewiring, replastering, redecorating. Nothing needing planning permission or building regulations sign-off.

Heavy refurbishment means structural work, extensions, conversions, or anything requiring planning and building control. Converting a house into flats, or adding a storey. There's a dedicated page on heavy refurbishment covering how those are funded.

Getting the classification right at the start avoids surprises at valuation and sends the case to lenders who actually suit it.

How do you qualify?

Lenders focus on the security and the strength of the exit, which makes qualifying more accessible than most borrowers expect. The detail still matters though.

What loan to value can you get?

Across the standard market, 80% against current value is generally the practical ceiling, dropping to around 75% where the loan is secured on your own home under regulated bridging. Heavier leverage usually means offering additional property as security.

Check whether a quoted LTV is gross or net. Advertised figures are almost always gross, and once retained interest and fees come off, the amount actually released is often meaningfully lower. Comparing on the net figure you'll receive rather than the headline percentage gives a truer picture. We cover this in why 75% is not 75%.

Does credit history matter?

It's considered but it's rarely decisive the way it would be on a mortgage. The loan is secured against a tangible asset and the exit carries significant weight, so an imperfect file doesn't automatically rule you out.

What makes an application strong?

A realistic schedule of works, a sensible cost breakdown, evidence of experience or a competent contractor where you're newer to it, and a believable exit. Projects with vague timelines or optimistic end valuations get scrutinised far harder, and rightly.

What does it cost?

Interest is quoted monthly rather than annually, and can be paid monthly, retained from the loan, or rolled up to the end. What moves the rate, roughly in order, is the LTV, the property type, the strength of the exit and how clean the legal position is. Speed costs less than most people assume. Certainty of repayment is what lenders really price.

Beyond the rate, the full cost generally includes:

• Arrangement fee, usually a percentage of the loan, deducted at drawdown
• Valuation fee, either a desktop or a physical inspection, with a desktop saving both time and money where the lender accepts one
• Legal fees covering your solicitor and the lender's; some lenders allow one firm to act for both, which reduces cost and time
• Exit fee, charged by some lenders on repayment and by plenty of others not at all, so worth asking about
• Broker fee, agreed case by case and confirmed up front rather than built invisibly into the rate

Advertised "from" rates are a starting point, not a price. What applies to your project depends on its specifics, and regulated and commercial deals price differently. We set the real figures out in writing before anything proceeds.

How long do these loans run?

Typically one month to 24 months. Most light refurbishment completes within 6 to 12 months; heavier, planning-led projects sometimes need the full term. Repayment is usually a single lump sum at the end, funded by selling or by refinancing onto a mortgage or buy to let product once the property is mortgageable again.

Can the works money come in stages?

Yes, and on larger projects it usually does. Funds are released as work progresses rather than handed over at completion, which keeps interest costs down. It also means you need to be able to fund the first stage yourself and be reimbursed, so establish that before you commit rather than discovering it afterwards.

What does the application need?

• Proof of identity and address for all applicants
• Details of the property, its current value and the title
• A schedule of works and costs, with contractor details where applicable
• Evidence of the exit, such as local comparables or an agreement in principle for the refinance
• Proof of funds for any deposit or contribution, and details of existing borrowing on the property
• Planning permission and building regulations documentation for heavier projects

Having that ready and complete at the outset is the simplest way to avoid delays once things are moving.

How long does it take?

Initial decisions often within 24 to 48 hours. From decision to funds, straightforward cases complete in days to a few weeks; complex titles, heavier works or additional security take longer. The valuation stage is usually the biggest single factor, which is why asking whether a desktop is acceptable is worth doing on day one.

What are the risks?

The exit is the big one. Bridging is short-term and interest-bearing, so a sale that takes longer than expected or a refinance that falls through leaves you paying interest well beyond the plan, and potentially facing default charges. Before committing, test whether comparable properties nearby are actually selling and how quickly, rather than assuming the market moves at the pace your plan needs.

Cost overruns are the other. They erode the margin the project was underwritten on, and on a refurbishment they're common rather than exceptional. And the loan is secured against the property, which means the lender can take possession if it isn't repaid.

The gap between gross and net is the mistake we see most often. Underestimating it is how projects end up underfunded in month two.

Choosing a lender

Lenders vary in maximum LTV, how they treat light versus heavy work, whether funds come in one drawdown or in stages, and whether there's an exit fee. Some are built for fast, simple light refurbishment; others suit heavier planning-led schemes.

Service matters as much as price here. A lender slow to instruct a valuation or release a staged drawdown costs you time, and time is money on a loan charged by the month. We search over 120 lenders, which means matching the project to the one most likely to deliver rather than the one with the best headline.

Talk through your project

Tell us about the property, the works and how you plan to exit, and we'll tell you what's possible, what it will cost gross and net, and which route gets you there fastest. If the numbers don't work, you'll hear that early enough to do something about it.

Call 0330 133 4442 or book a call.

Your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

This is general information, not a quotation, an offer of finance or personalised advice. No lender is named. Loan to values, fees, rates and lender criteria vary by lender and by deal, and the terms available to you may be different. Bridging finance is short-term secured borrowing and it can be expensive. If a secured loan is not repaid in line with its terms, the lender may take enforcement action against the property or any other security provided.