Refurbishment Loans
Up to 100%LTV
100% of works funded
No Broker fees
Refurbishment loan options
Property refurbishment loans in the UK offer flexible finance for investors and homeowners looking to purchase and renovate residential or commercial property. Whether you’re upgrading a buy-to-let, converting a home into an HMO, improving your own residence, or undertaking a commercial renovation, these loans provide a fast, practical solution to get projects moving. We offer a range of options for refurbishment finance such as short term funding, first and second charge mortgages.
Typically short-term, these products are ideal for purchasing uninhabitable properties or funding upgrades involving structural changes, layout alterations, or cosmetic improvements. Many clients use them as part of a buy-refurbish-refinance (BRR) strategy or to fund properties for resale. Refurbishment mortgages also offer long-term finance from day one, even if the property isn’t yet habitable, with up to 70% of the purchase price available initially and further advances possible after works are completed and revalued, suitable for everything from EPC upgrades to light and medium refurbishments.
For commercial properties, such as shops, offices, industrial units, or hotels; refurbishment finance is typically structured as a re-mortgage or, less commonly, a second charge, since further advances are not usually available in the same way as with residential refurbishment mortgages. These loans are tailored to the scope of works and borrower profile, whether you’re carrying out minor upgrades or major structural changes. Our team can guide you through the different types of refurbishment loans, explain lender criteria, and help you position your application to secure the most competitive terms for your project.
Not quite sure what you need?
If you aren’t sure what you need, request a call back from one of our expert mortgage advisors!
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Under 1 hour response time
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31 days average offer time
Refurbishment loan criteria
Bridging loans for refurbishment finance
For investors flipping properties or using a Buy, Refurbish, Refinance (BRR) strategy, enhanced bridging loans offer a faster, more cost-effective alternative to traditional development finance, especially for light refurbishment loans where works total around 10% of the property’s value. These loans typically provide higher loan-to-value (LTV) options and are ideal for refurbishment finance cases that don’t involve structural changes or complex build work.
A key advantage is the simplicity. Enhanced bridging loans for refurbishment don’t require asset managers or quantity surveyors for staged drawdowns, helping borrowers save time and reduce costs. Instead, the process is streamlined, with funding based mainly on the property’s purchase price. Borrowers are expected to self-fund any renovation costs, so if your project involves structural work or needs build cost finance, please see our development finance options.
Key Features
- Completion in as little as 28 days
- No quantity surveyor or asset manager needed
This product suits experienced landlords and property investors who value speed, flexibility, and simplicity when acquiring and upgrading residential properties.
Refurbishment bridging loan rates
Not quite sure what you need?
If you aren’t sure what you need, request a call back from one of our expert mortgage advisors!
-
Under 1 hour response time
-
31 days average offer time
Refurbishment mortgages for buy to let
A refurbishment mortgage is designed for borrowers looking to purchase a property that requires renovation, without relying on short-term bridging finance. This type of mortgage allows you to move straight onto a mortgage product at acquisition, even if the property is not yet fit for rental or immediate occupation—making it an ideal solution for those looking to de-risk a refurbishment project.
Traditionally, refurbishment loan mortgage lenders require a property to be habitable before they’ll lend. However, refurbishment mortgage lenders offer a more flexible approach. With this product, you can secure up to 70% of the purchase price at the point of acquisition. Then, once refurbishment works are complete, and a valuer revisits the property, you may be able to draw an additional advance, up to 70% of the uplifted post-refurbishment value, as part of the retention structure. It’s important to note that refurbishment mortgages do not fund the cost of the renovation works themselves. Borrowers are expected to fund the refurbishment using their own capital. If you’re seeking finance that includes build costs, please refer to our development finance section. Refurbishment mortgages can be used for a range of improvements.
EPC rating upgrades to meet minimum energy efficiency standards. Light refurbishments, such as cosmetic improvements, redecoration, or new kitchens and bathrooms Medium refurbishments, which may include layout changes, non-structural internal works, or updates required to meet rental compliance. Whether you’re an investor preparing a buy-to-let or an owner-occupier upgrading a property to modern standards, refurbishment mortgages provide a flexible and efficient way to secure long-term finance from day one, without the need to rely on bridging loans or wait until the property is deemed habitable.
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Development finance for refurbishment finance
For projects involving significant structural work, such as extensions, major layout changes, or full-scale renovations, a development finance facility is typically the most suitable option. These facilities can fund up to 75% of the purchase price and up to 100% of the build or refurbishment costs, with funds released in stages as the project progresses. This type of funding is best suited to experienced investors or developers who need full financial backing for more complex or large-scale works.
When reviewing applications, lenders assess key financial metrics to determine viability. The Loan to Gross Development Value (LTGDV) compares the loan amount to the projected value once works are complete, usually capped at 75%. The Loan to Cost (LTC) reflects how much of the total project cost is being financed—often up to 90%. Lastly, Profit on Cost (POC) measures the projected profit relative to the overall cost; most lenders require a minimum of 15% POC to ensure there’s enough margin to account for market or cost changes.
Selecting the right funding depends on your project’s scope, your capital, and your level of experience. Whether you’re tackling structural upgrades, light refurbishments, or simply need a mortgage for a property in need of work, understanding these finance options can help you choose the most effective solution for your goals.
Development finance | Refurbishment loan rates
Commercial refurbishment loans
Commercial refurbishment loans are a flexible option for business owners and investors looking to improve or repurpose commercial property. Whether you’re planning to renovate a shop, upgrade office space, or split a larger building into multiple units, these loans for property refurbishment can support a wide range of strategies.
Common uses
- Splitting commercial properties into multiple units
- Office refurbishment and modernisation
- Shop renovation and reconfiguration
- Funding for acquiring and upgrading new premises
Key Features
- Up to 70% of the purchase price covered
- Up to 100% of refurbishment costs funded
- No prior experience required, though it is preferred
Property refurbishment loans for commercial use offer a practical way to enhance asset value, generate higher rental income, or support business growth through better premises. These refurbishment loans are suitable for both experienced developers and first-time commercial property buyers.
Development finance | Commercial refurb loan rates
Bridge to let refurbishment loan
If you’re an investor planning a flip or a BRR (Buy, Refurbish, Refinance) strategy, a Bridge-to-Let mortgage product could be the perfect fit. It combines the speed and flexibility of bridging finance with a guaranteed exit onto a longer-term buy-to-let mortgage, subject to a satisfactory reinspection.
This type of investment refurbishment loan is tailored for light to medium renovation projects, where the property needs some work to become mortgageable or to boost its rental value before letting it out.
How it Works
A Bridge-to-let can be used in two ways:
- Purchase – Acquire a property that isn’t currently suitable for a standard BTL mortgage
- Refinance – Release equity or repay another loan while undertaking refurbishment
Once the works are complete and the property meets letting standards, the lender reinspects the property. If all is in order, the loan automatically transitions to a buy-to-let mortgage, no need to reapply or go through affordability checks again.
Key Features
- Suitable for light to medium refurbishments (e.g. kitchens, bathrooms, cosmetic updates)
- Available on both purchase and refinance
- Fast completions with flexible underwriting
- Guaranteed exit onto a buy-to-let product, subject to valuation and reinspection
Ideal for property investors looking for a structured, lower-risk route to refinance
A bridge-to-let offers the convenience of a pre-agreed exit while giving you the breathing space to improve the property’s value and rental appeal. Whether you’re planning a short-term flip or a long-term hold via BRR, this is one of the most effective ways to secure a loan for property refurbishment with a clear path forward.
Home refurbishment loan
Looking to upgrade your home or carry out major renovations? We offer a range of flexible financing options to help fund your home improvements. Whether you’re planning a new kitchen, loft conversion, extension, or full-scale refurbishment, we can help you unlock the capital you need.
We offer multiple routes to raise funds, including:
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Further Advances – Borrow more from your existing mortgage lender to finance your project.
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Remortgages – Switch your mortgage to a new lender and release equity at the same time.
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Second Charge Mortgages – Keep your existing mortgage and take out a second loan secured against your property.
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Bridging Finance – Short-term funding to kick-start or complete refurbishment work quickly.
Each option comes with its own pros and cons, and we’ll help you weigh them up to find the most cost-effective and suitable solution for your plans.
Further advances for refurbishment finance
A further advance is when you borrow additional funds from your existing mortgage lender to help finance home improvements or refurbishments. It’s a straightforward way to raise capital without changing lenders, often with more favourable terms than starting from scratch.
How it Works
Your lender will assess the current value of your property and how much equity you hold. If there’s enough equity, they may be willing to offer extra borrowing to cover your refurbishment plans. The additional loan is usually added to your existing mortgage, with its own interest rate and repayment terms.
Maximum Loan-to-Value (LTV)
The amount you can borrow via a further advance depends on the LTV – the ratio of your total mortgage (including the new borrowing) to the current value of your property. Typical LTV limits are:
Residential Properties: Up to 85% LTV
This means you need to retain at least 15% equity in your home after the further advance.
Buy-to-Let Properties: Up to 85% LTV
Lenders generally require at least 15% equity.
Some lenders may impose lower LTV caps depending on the nature of the works, your credit profile, and the property type. We’ll assess your options and guide you to the most suitable lender based on your circumstances.
Re-mortgage for refurbishment loan
A re-mortgage is a popular way to fund renovation projects by switching to a new mortgage deal and releasing equity from your property. Whether you’re improving your own home or upgrading a rental property, this approach can provide a cost-effective loan for home refurbishment.
How it Works
When you re-mortgage, the new lender assesses your property’s current market value. If you’ve built up equity, either through price growth or paying down your mortgage, you may be able to release some of it as a lump sum. That money can then be used as a home refurbishment loan to cover renovation costs.
Maximum Loan-to-Value (LTV)
Most lenders offering re-mortgages for refurbishment will allow borrowing up to:
85% LTV for both residential and buy-to-let (BTL) properties
That means you can borrow up to 85% of your property’s current market value, leaving at least 15% equity untouched. This is ideal if you’re looking for a loan for property refurbishment without needing short-term finance like bridging.
Lenders may ask for details of your refurbishment plans, especially if you’re increasing the size or value of the property significantly, but this route is often less expensive than other forms of borrowing.
Second charges for home refurbishment loan
A second charge mortgage can be a smart way to raise funds for property improvements without touching your existing mortgage. It sits behind your current mortgage on the title, acting as a separate loan secured against the equity in your home or rental property, ideal for those needing a flexible and fast home refurbishment loan.
How it Works
Instead of re-mortgaging or switching lenders, a second charge allows you to keep your current mortgage deal in place and borrow additional funds against your available equity. This makes it a great option if you’re tied into a low fixed rate or face early repayment charges with your main mortgage.
Maximum Loan-to-Value (LTV)
Some specialist lenders offer second charge loans up to 97% LTV, much higher than most mainstream re-mortgage or further advance products.
That means:
You only need 3% equity in your property to qualify
Available for both residential and some buy-to-let properties
Ideal for homeowners or landlords with limited equity but strong income
This makes second charge lending one of the most accessible options when you need a loan for home refurbishment or a loan for property refurbishment, especially if the renovation adds value or enhances the property’s functionality.
Bridging loans home refurbishment loan
If you need fast, flexible funding to kick-start or complete renovation works, a bridging loan can be the ideal solution. Bridging finance is a short-term loan secured against property, perfect for time-sensitive projects or when traditional lenders can’t move quickly enough.
Whether you’re refurbishing a home to live in, flip, or let out, bridging offers a dynamic way to secure a loan for property refurbishment without the delays of a standard mortgage.
How it Works
Bridging loans can be secured as a:
- First charge, if there’s no existing mortgage on the property.
- Second charge , if you already have a mortgage in place.
Funds are usually released quickly, and interest can often be rolled up (paid at the end), making it ideal for projects where cash flow is tight upfront.
Loan-to-Value (LTV)
Up to 75% LTV on the property being refurbished
Up to 100% LTV if you offer additional security, such as another property
This means you could potentially borrow the entire cost of the project if you have equity elsewhere — a huge advantage for investors or homeowners wanting to move quickly.
Why Use Bridging for a Home Refurbishment Loan?
- Speed – Funds can be arranged in days, not weeks
- Flexibility – Can be used for standard or heavy refurbishments
- Minimal income checks – Focus is on the asset and exit strategy, not affordability
- Short-term – Ideal if you’re planning to refinance or sell after works are completed
Whether you’re tackling a quick refresh or a major structural overhaul, bridging finance can be the fastest way to secure a loan for home refurbishment when timing matters.
PROCESS BREAKDOWN
QUESTIONS ABOUT REFURBISHMENT LOANS
A refurbishment loan is a type of finance used to fund property improvements — ranging from light cosmetic updates to more extensive structural works. It’s designed for homeowners, landlords, and property investors who want to enhance a property’s value, condition, or rental potential.
Depending on your situation and the scale of the work, a refurbishment loan could be arranged as:
- A home refurbishment loan – for owner-occupiers improving their primary residence
- An investment refurbishment loan – for landlords or developers upgrading rental or resale properties
- A loan for property refurbishment – covering everything from kitchen and bathroom refits to full refurb projects
Common Ways to Fund a Refurbishment Loan
- Further Advance – borrow more from your existing mortgage lender
- Re-mortgage – switch lenders and release equity
- Second Charge Mortgage – a separate loan secured against your property
- Bridging Loan – short-term finance for fast, flexible access to funds
- Bridge-to-Let – ideal for investors planning to rent out after the works
Lenders may assess the property’s current condition, the scope of the refurb, your exit strategy, and whether the works add value. Some products are interest-only and short-term, while others can be long-term or integrated into a traditional mortgage.
Yes, you can get a mortgage for refurbishment, particularly if the works are light and the property is already habitable. Many homeowners and investors use mortgage-based products to fund upgrades such as new kitchens, bathrooms, cosmetic redecorations, or general improvements. These types of refurbishments are usually well within the scope of a traditional mortgage, or can be funded through options like further advances, re-mortgages, or second charge loans.
If you already own the property, a further advance or a re-mortgage with equity release can be a straightforward and cost-effective way to raise money for home improvements. These routes are especially useful for light refurbishment projects and can often be arranged through mainstream lenders. Another option is a second charge mortgage, which allows you to keep your existing mortgage deal and borrow additional funds secured against your home — some lenders offer up to 97% loan-to-value (LTV), making this accessible even if equity is limited.
For property investors, there are more specialist options available, such as bridging loans or bridge-to-let finance, which are designed for short-term use while improvements are being made. These can work for both purchases and refinances, and are suitable for light to medium refurbishments. They’re particularly popular in strategies like Buy, Refurbish, Refinance (BRR), where speed and flexibility are key.
However, if the refurbishment is more extensive, involving structural alterations, extensions, or properties that are uninhabitable at the point of purchase, then standard mortgages are unlikely to be suitable. In these cases, you’ll typically need refurbishment bridging finance or development finance. These are tailored to more complex projects and can cover everything from major layout changes to full structural renovations. Once the works are complete and the property is mortgageable, you can then refinance onto a standard residential or buy-to-let mortgage.
Absolutely. Bridging loans are commonly used for home renovations, particularly when speed and flexibility are key. They’re short-term, interest-only loans secured against your property and can be arranged much faster than a standard mortgage — often within days. This makes them ideal if you need funds quickly to carry out renovation works, whether you’re upgrading your current home or preparing a property for sale or re-mortgage.
Bridging finance is particularly useful when:
- You need to carry out heavy or structural refurbishments that a mortgage lender won’t fund
- The property is currently un-mortgageable (e.g. no working kitchen or bathroom)
- You want to complete works quickly and refinance or sell once finished
- You’re looking to add value, then switch to a cheaper long-term mortgage
Most bridging lenders will allow you to borrow up to 75% loan-to-value (LTV) — and in some cases, up to 100% with additional security (such as another property). Bridging loans can be secured as a first or second charge, giving you more flexibility if you already have a mortgage in place.
You’ll need a clear exit strategy, such as refinancing onto a residential mortgage once the works are complete or selling the property. If you’re living in the property, it must be your main residence and regulated by the Financial Conduct Authority (FCA), which means stricter affordability checks may apply compared to unregulated investment loans.
Refurbishment finance is a type of property funding used to cover the cost of renovations or improvement works, whether for your own home or an investment property. It can be used for anything from light cosmetic upgrades like kitchens, bathrooms, and decorating, to more extensive structural work such as extensions or conversions. For lighter projects, funding can often come from a re-mortgage, further advance, or second charge loan. For heavier or structural refurbishments, especially where a property is uninhabitable, specialist finance like bridging or development loans may be required. Refurbishment finance is commonly used by homeowners, landlords, and property investors looking to improve living standards, increase value, or boost rental income.
No, whilst the more competitive lenders may require some experience, there are many lenders that will not require any experience for a refurbishment loan even for heavy works!
Yes, some refurbishment loans will fund 100% of the works cost.
This is usually subject to the gross loan not exceeding maybe 75% of the end value or GDV. As well as this measure of maximum loan, lenders will also want a minimum of 5-10% “skin in the game” or funds/equity provided by the applicant. In lenders terms, Loan to Cost (LTC) should be no more than 90-95%.
Some lenders will allow the 5-10% equity piece to be funded by a private investor.
Lenders will also be concerned about the profitability and therefore some lender may have minimum profit on cost measures, such as 15% for example.
As long as these measures stack up, the lender may lender 100% of the works in arrears.
So if you have a project with works totalling 100k, then this will be split into phases usually. If a lender has a minimum drawdown of £25k which is common, then the maximum draws can be 4 at 25k a piece. Of course each draw down will incur professional fees, so we can max the draw down amounts to reduce the cost of borrowing.
Usually applicants either forward fund their schemes, or have their builder fund the first phase under a JCT or minor works contract.
Refurbishment loans are designed to finance both the purchase and the renovation of a property. These loans cater to a range of refurbishments, from light to heavy. For more extensive projects, some lenders may require the borrower to have prior refurbishment experience, while others may be more flexible regarding this requirement.
There are various products available in this category. Some offer a higher Loan to Value (LTV) ratio, up to 85%, which includes the refurbishment costs. Others might provide a loan covering 75% of the property’s purchase price, with an additional 100% financing for the renovation expenses.
However, it’s important to note that while these financing options can be attractive for profitable projects, they may not always be suitable. This depends on the projected profitability of the deal or the Loan to Gross Development Value (GDV) ratio. Some projects may not yield enough profit or have a sufficiently high GDV to make these financing options viable.
Refurbishment loans usually span from maximum terms of between 12-36 months. Of course, they are a cost of doing business when you are refurbishing a property, but with profit involved many applicants seek to exit these products in good time.
Refurbishment Loan lender usually have a minimum term of between 1-3 months, so when your refurb is complete, you can exit immediately after that.
Specialist lenders offering refurbishment loans often will have a closed legal panel, meaning that they will dictate which lenders can act for them. You would select from a list of solicitors who will act for the lender and potentially you also. Joint representation is sometimes offered where the chosen solicitor’s firm can also act for you. Some lenders closed panel will be just sole representation for the lender and you will then be able to use your chosen solicitor additionally subject to eligibility. It is key to know that with sole representation, there are two legal fees to pay.
No
Although if your proposed exit from the refurbishment loan will be remortgage, the lender will want to be comfortable you have enough income to exit onto a mortgage lender.
We arrange cost-effective refurbishment loans for:
- Individuals
- Special Purchase Vehicles/Limited Companies
- Limited Liability Partnerships (LLP)
- Trading companies
- Charities
- On/Offshore Trusts
It is important to note that Refurbishment loans are not covered by the Financial Services Compensation Scheme, so borrowers should ensure they are dealing with a reputable lender. However, residential borrowers looking for renovation loans may find regulated products available with self build mortgages.
When planning renovations, choosing the cheapest way to borrow money for home improvements can save you thousands in interest and fees. The best option depends on how much equity you have, your credit profile, whether you’re a homeowner or investor, and the size of your project.
Below are all the most cost-effective funding options, starting with the cheapest:
Further Advance (with your existing lender)
- Top choice if you’re mid-way through a mortgage deal with a competitive rate.
- Low interest, minimal fees, and faster processing.
- Ideal for modest refurbishments (£5k–£50k).
- Available up to 95% LTV (some lenders go higher with strong credit).
Re-mortgage with Equity Release
- Great if you’re at the end of your fixed deal or can switch to a lower rate.
- You can spread the cost of renovations over the life of the mortgage.
- Best for larger projects or full-house renovations.
- Borrow up to 95% LTV with many high street lenders.
Second Charge Mortgage
- Keeps your current mortgage untouched (ideal if you’re on a low fixed rate).
- Can borrow up to 97% LTV with certain specialist lenders.
- Rates are slightly higher than first charge mortgages but still lower than unsecured loans.
- Can be used for both residential and rental property refurbishments.
Local Authority or Government Home Improvement Loans
- Some councils offer low-interest or even 0% home improvement loans for essential works like roof repairs, insulation, or disability adaptations.
- These are means-tested or project-specific but worth checking if available in your area.
- Can be a great low-cost option for eligible households.
- Green Home Grants / Energy Efficiency Schemes (if available)
- In some regions or periods, government-backed schemes offer grants or interest-free loans for eco-friendly improvements (e.g., solar panels, insulation, heat pumps).
- Check current schemes for your area — these can cover part or all of the cost of upgrades.
Personal Loan (Unsecured)
- Quick access, no security required — suitable for small projects.
- Not equity-based, but rates depend on your credit score.
- Often capped around £25,000–£30,000 and over shorter terms (2–7 years).
- Less flexible and often more expensive than secured borrowing.
0% Interest Credit Cards (Short-Term Only)
- Ideal for DIY materials, furniture, or minor improvements.
- Must repay within the 0% period (usually 12–24 months) to avoid high interest.
- Watch out for fees, balance transfer limits, and credit score impact.
Bridging Loans (Short-Term Only)
- Useful when speed is more important than cost — e.g., urgent works, auction purchases, or properties that are temporarily un-mortgageable.
- Higher rates than long-term borrowing, but extremely flexible.
- Exit via sale or refinance — can be done as first or second charge, and up to 100% with additional security.
Bridge-to-Let Finance (for investors)
- Purpose-built for investors using a Buy, Refurbish, Refinance (BRR) strategy.
- Higher cost than standard loans but includes a guaranteed exit onto a buy-to-let product after the works.
- Efficient for light to medium refurbishments where timing and future refinancing matter more than upfront cost.
For most standard renovation mortgages, you’ll typically need a minimum deposit of 5%, especially if the property is in a liveable condition and the refurbishment is light — such as a new kitchen, bathroom, or general redecoration. In these cases, lenders are usually happy to offer 95% loan-to-value (LTV) mortgages, meaning you only need to put down 5% of the property’s purchase price.
However, if the property requires more significant works — such as structural repairs, layout changes, or if it’s uninhabitable (no working kitchen or bathroom) — then you may not be eligible for a standard mortgage. In those cases, you’ll likely need a refurbishment bridging loan or development finance, where deposit requirements are higher. These products typically allow up to 75% LTV, so you’d need a 25% deposit, although this can sometimes be reduced if you offer additional security (e.g. another property).
So, while a 5% deposit is possible for light renovation projects using a traditional mortgage, heavier refurbishments usually require a larger deposit and a more specialist type of finance.
With Refurbishment Loans, the approach towards local searches can vary. While local searches – which can take anywhere from 2 to 18 weeks depending on the local council – are a standard part of property transactions, some lenders may offer alternatives for refurbishment projects.
In many cases, lenders may accept an indemnity policy as a substitute for local searches. This policy serves as a safeguard against any issues that would typically be uncovered during a local search, such as planning permissions or local authority notices that could affect the refurbishment project.
Borrowers seeking to expedite their refurbishment loan process should consider lenders that are open to using indemnity policies. This option can significantly reduce the waiting time usually associated with local searches, thus facilitating a quicker start and completion of the refurbishment project.
It’s important for borrowers to discuss with their legal advisors the implications of opting for an indemnity policy. This ensures that they are fully aware of any potential risks and that the policy meets the specific requirements of their refurbishment project.
Refurbishment loans are a form of short term funding. Therefore they are charged on a monthly, interest only basis. Unlike mortgages that are charged annually, borrowers will need to be mindful to multiply their short term lending rates by 12 to compare pricing to mortgages.
From here, borrowers have the option to either service or deduct interest for the term.
Serviced Interest
In a serviced interest arrangement, the borrower pays the interest monthly.
This option can be beneficial if the borrower has a regular income stream and prefers to manage their cash flow by paying interest as they go. It helps in maintaining the principal amount of the loan, as the borrower is actively paying off the interest.
Borrowers need to ensure they have the necessary cash flow to make these monthly interest payments. It’s essential to plan for these expenses to avoid financial strain. Lenders will expect borrowers to have adequate disposable income or cash flow to be eligible for serviced payments.
Deducted (Retained) Interest
In deducted or retained interest loans, the interest for the loan term is calculated upfront and deducted from the initial loan amount provided to the borrower.
This approach is useful for borrowers who may not have a regular income stream during the term of the bridging loan, such as property developers awaiting sale or refinancing of a project. It eliminates the need for monthly interest payments, as the interest is already accounted for.
Since the interest is deducted at the beginning, the initial cash received by the borrower is less than the total loan amount. Borrowers should plan accordingly, as they will have less capital available upfront for their project or investment.
Both options have their specific uses depending on the borrower’s financial situation, cash flow, and strategy for the loan. It’s crucial for borrowers to understand these differences and choose the option that best aligns with their financial plan and the intended use of the refurbishment loan.
Yes, in fact a mortgage is not a suitable product for a property that is inhabitable.
A refurbishment lender will acknowledge the schedule of works planned to make the property habitable for letting, or sale.
Therefore, borrowers can take advantage of the lack of competition on these purchases as opposed to competing with home buyers.
You will not need an income to get a refurbishment loan, however, your lender will underwrite your exit and if it is set to be refinanced, they will sense check your income against suitable remortgage lenders.
Refurbishment loan lenders will usually want at least 15-25% of the property’s value because of the increased risks linked with these properties. In simple terms, they’re typically willing to lend you up to 85% of what the property is worth. Additionally, Refurbishment loan lenders may lend up to 100% towards the purchase price. So if your project is set to make good profit, you may need just 25% of the purchase price, plus the cost of stamp duty and upfront valuation finance and legal costs.
Just like mortgages, there are refurbishment loan lenders that allow for applicants with adverse credit. So whether you have missed payments, CCJs, defaults or even an IVA, we can still source you with a suitable refurbishment loans lender. If you have discharged from bankruptcy then your options will become better after 3 years and also subsequently 6 years.
Your refurbishment loan lender may enquire about your remortgage options for applicants with adverse credit.
Yes.
Often this can be a way around Loan to Value (LTV) restrictions imposed against applicants on buy to let mortgages, who are first time buyers.
Applicants using a refurb loan first, may need to remortgage, but they will then not be a first time buyer and the restrictions then lift.
Yes. Many of our clients use refurbishment loans to purchase properties from auction. It is good to instruct your broker immediately so you can establish which solicitor you may be dealing with. It is important to note that most short term lenders offering Refurbishment Loans will have a closed legal panel and therefore your chosen solicitor may not be able to act.
We assist our clients with refurbishment loans in England, Wales, Scotland and Northen Ireland.
Explore Our Latest News and In-Depth Blog Articles
At Mortgage Lane, we see the most complex of refurbishment loan applications, some of which make a good read for investors looking to learn from other applicants challenges, or for those effected by the topics! See more refurbishment loan topics covered in our blog here.
Refurbishment loans for Property Investors
At Mortgage Lane we are specialists in refurbishment loans, assisting property investors to acquire buildings to renovate and to convert for change of use. Refurbishment loans can be used for a variety of scenarios:
- Acquisition and Refurbishment Loan
- Commercial Refurbishment Loans
- Bridging Loans Refurbishment
- Heavy Refurbishment Loan
- Hotel Refurbishment Loan
- Home Refurbishment Loan
- Loan to Refurbish House