- When to start
- 8-12 weeks before term expiry
- Typical refinance targets
- Term mortgage, buy-to-let, new bridge
- Common trigger
- Works completed, income established, sale delayed
- Risk if left too late
- Default interest and forced sale
Why bridging loans get refinanced rather than repaid by sale
Plans change: a sale that made sense at outset may no longer be the best route once works are complete and rental income becomes available, or the market has moved and holding the asset longer makes more sense than selling into it.
Timing the refinance
Start conversations with a broker eight to twelve weeks before the bridge matures, particularly if the exit lender needs to assess a full trading history, refurbished property valuation, or a change of use. This buffer allows time to address any issues an underwriter raises without racing the clock.
- Review current loan balance and redemption figure
- Get an updated valuation if the property has changed
- Confirm income or rental evidence meets the new lender's criteria
Refinancing onto a term mortgage
This is the most common route for completed developments or refurbishments — moving from short-term bridging finance onto a standard commercial, buy-to-let or residential mortgage once the property is income-producing or mortgageable in its finished state.
Refinancing onto a new bridge
Where a sale is still the plan but simply needs more time, a second bridging loan can redeem the first, buying additional months while a sale completes. This is sometimes necessary but should be treated as a last resort rather than a default plan, given the additional fees involved.
Frequently asked
Can I refinance a bridging loan before the term ends?
Yes, most bridging loans allow early redemption, often without penalty after a minimum interest period, so refinancing before the term expires is common and often advisable.
What happens if I don't refinance in time?
Most facilities move to a default interest rate once the term expires, which is significantly more expensive, and in a worst case the lender can move towards enforcement, so early planning matters.
Will I need a new valuation to refinance?
Almost always, particularly if the property has been refurbished or developed since the original valuation, since the new lender needs current market evidence.
Is it harder to refinance a bridging loan than to get one initially?
Not inherently, but the new lender will want to understand why the original exit didn't happen as planned, so having a clear, honest explanation helps.
Can a broker help even if my current lender is willing to extend?
Yes — comparing an extension against a full refinance onto a cheaper term product is worth doing, since extensions aren't always the most cost-effective option.
Bridging loan coming up to term?
Get in touch eight to twelve weeks before expiry and we'll map out the most cost-effective refinance route.
Related reading
Situations this applies to
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