Mortgages
Mezzanine Development Finance, supporting both seasoned investors and newcomers in various development projects.
Speak to a Mortgage Lane adviser about your options.
In short
Mezzanine finance tops up senior development debt and ranks behind it, so the senior lender's consent, the security position and the exit all have to be agreed across both facilities from the start.
Mezzanine finance sits between senior debt and equity and is used to increase overall leverage on development and investment projects. Because it ranks behind the senior lender, correct structuring is essential from the start to ensure the funding stack, security position, and exit strategy are aligned.
We help developers and investors arrange mezzanine finance for projects where senior debt alone is not sufficient, including cases involving stretched equity, funding gaps, or more complex capital stacks. Correct lender matching is critical to ensure the mezzanine facility works alongside the senior loan without creating unnecessary risk, delay, or exit pressure.
| Criteria | Detail |
|---|---|
| Borrowers | Personal, Ltd co, LLP, Trusts, Offshore Trusts |
| Term | Max 24 months |
| Max Applicants | 6 |
| Loan to Gross Development Value (LTGDV) | Max 75% |
| Loan to Cost (LTC) | Up to 95% |
We specialise in structuring mezzanine finance solutions for developers who need additional capital but want to avoid refinancing their entire facility. Whether you've gone over budget on build costs, secured additional planning permission mid-project, or need to top up your land contribution where senior lenders won’t stretch far enough, mezzanine property finance offers a powerful, flexible solution. On this page, we explore how mezzanine funding in UK development works across these key use cases, the differences in Loan to Cost (LTC) and Loan to Gross Development Value (LTGDV), and how to secure competitive mezzanine financing interest rates from trusted mezzanine finance providers.
Read how mezzanine finance may be considered alongside a senior loan when development costs rise, including how Loan to Cost (LTC) affects the funding structure.
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One of the most strategic uses of mezzanine finance in property development is when developers need to raise additional capital for the land purchase, but their senior lender will not fund more than 50-60% of land value. In such cases, mezzanine debt can help bridge the shortfall, enabling developers to proceed with the acquisition without overextending their own equity.
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One of the key benefits of mezzanine funding in property development is its ability to boost overall leverage.
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Where a senior lender will fund no more than 50-60% of land value, mezzanine debt can help cover the shortfall on the purchase, so the developer need not overextend their own equity to buy the site.
We provide tailored property development finance for virtually every type of build, from conventional housing to complex, high-value schemes. Our expertise and whole-of-market access enable us to raise capital for developers working on projects that fall outside standard lending criteria, offering funding options that align with build timelines, exit strategies, and cash flow needs. We specialise in high-rise development funding, supporting multi-storey residential or mixed-use towers that require phased drawdowns, robust cost analysis, and flexible exit routes. For developers undertaking commercial to residential conversions, we secure conversion finance that considers permitted development rights, change-of-use complexity, and end-value projections, whether it’s an office-to-flat scheme or retail repurpose. Where work has already started and funding is needed mid-project, we arrange part-built development loans to refinance stalled schemes or raise capital for completion. For forward-thinking developers, we also support modular construction funding, where lenders must understand off-site fabrication, payment triggers, and factory-to-site logistics.
Our panel includes lenders confident in supporting specialist property development finance, such as schemes with restrictive covenants, specific use classifications, or planning stipulations. Whether it’s a unique architectural build, a listed property renovation, or a scheme with unusual materials or layouts, we find the right lender who can assess risk on real-world terms. If you’re looking to finance a complex development, Mortgage Lane offers the connections, expertise, and exclusive access to lenders who understand how to fund specialist projects. Whether it’s development finance, mezzanine funding, or bridging loans for property developers, we deliver funding that works, no matter how complex the build.
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The first process in your mezzanine development finance application will be gathering or updating information in relation to the property, land, or yourself. Once this has been established your expert development finance broker will make a product recommendation.
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Once you are satisfied with the product recommended and have confirmed to proceed, this will usually be submitted the same day to give you a decision, Once the lender has approved the deal, we can instruct the surveyor and quantity surveyor, or asset manager.
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Once the application is submitted, your valuation will be booked in and most of the time (depending on the lender). This will usually completed once your initial underwriting has been completed. Once the valuation is returned as well as the Quantity Surveyors (QS) report, if acceptable, the lender would then look to make a formal offer. You can then move to legal stage.
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Once you have had your mezzanine development finance offer, you will require adequate legal advice and then once you’re happy, your solicitor can draw this down once the legal requirements are satisfied. Your broker at Mortgage Lane will always be checking in on the application post offer, so we are chasing for you too!
Mezzanine financing in property development can be a highly effective tool for increasing funding on a project, especially when traditional senior lenders are unable to meet the full borrowing requirement. However, it also comes with a number of disadvantages that developers need to carefully weigh before proceeding.
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Mezzanine finance is a type of loan that helps fill a funding gap in a property development or business deal, when you don’t have quite enough money and your main lender won’t give you any more. Think of it like a top-up loan that sits between your main mortgage (senior debt) and your own cash or equity.
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Mezzanine financing is a hybrid form of funding that sits between senior debt and equity in the capital stack. It allows developers and business owners to access additional capital without giving up equity or needing to refinance their entire facility. However, mezzanine debt financing does come with elevated risks, particularly for the lender and, to a lesser extent, the borrower.
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When applying for development mezzanine finance, one often overlooked but vital consideration is the role of local authority searches and the strategic use of indemnity policies. These elements are key parts of due diligence and can significantly influence a lender’s willingness to approve mezzanine funding.
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Experience requirements vary by lender and project. Some lenders prefer previous development experience, particularly for complex schemes; others may consider applicants without it.
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The terms for mezzanine development finance typically range from 1 to 60 months, providing flexibility to suit various project timelines. Recognising that these loans are integral to property development, developers often aim to settle these financial agreements promptly, driven by the potential for profit.
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In the realm of mezzanine development finance, it’s common for specialist lenders to use a closed legal panel.
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We arrange cost-effective mezzanine development finance for:
It is important to note that mezzanine development loans are not covered by the Financial Services Compensation Scheme, so borrowers should ensure they are dealing with a reputable lender.
A developer is building a block of 10 flats with a total development cost of £2 million and a projected Gross Development Value (GDV) of £2.8 million once complete.
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Mezzanine finance in property is a form of secondary funding that helps developers bridge the gap between their equity contribution and what their senior lender is willing to offer.
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Mezzanine development finance is a powerful tool for property developers seeking to bridge funding gaps without refinancing their entire loan facility.
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In mezzanine development finance, it is common for lenders to add the product fee and the interest for the loan term to the total loan amount. This results in the capitalization of both the interest and product fee, meaning they are included in the total loan balance, rather than being paid on a periodic basis.
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In securing a mezzanine development loan through Mortgage Lane, having a regular income isn’t always essential.
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Similar to traditional mortgages, there are lenders within the mezzanine development finance sector who consider applicants with adverse credit histories.
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No, a minimum income is typically not a central underwriting requirement for a mezzanine development loan.
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We assist our clients with mezzanine development finance in England, Wales, Scotland and Northern Ireland.
Mezzanine finance is a type of loan that helps fill a funding gap in a property development or business deal, when you don’t have quite enough money and your main lender won’t give you any more. Think of it like a top-up loan that sits between your main mortgage (senior debt) and your own cash or equity.
Mezzanine finance in property is a form of secondary funding that helps developers bridge the gap between their equity contribution and what their senior lender is willing to offer.
Some are. A bridging loan is regulated by the FCA when it is secured on a property that is, or will become, the borrower's main residence: in law, where at least 40% of the property is used, or is intended to be used, as a dwelling by the borrower or a close family member. Bridging loans for buy-to-let, investment, commercial property or land are usually unregulated.
Yes, you can get a bridging loan without a job because UK bridging finance is asset-led, not income-led. Lenders focus on the property security, loan-to-value, and a credible exit strategy such as sale or refinance. Income is usually only assessed if the exit relies on a residential mortgage.
Yes, consultations can be provided remotely. Remote consultations allow clients to receive advice and case management without attending in person, using phone or video calls. This approach offers flexibility, speed, and full access to specialist support regardless of location within the UK.
Bridging finance typically costs more than a mortgage and is priced monthly, not annually. Expect interest of around 0.6% to 1.5% per month, plus arrangement fees (often 1-2%), valuation fees, and legal costs. Total cost depends on loan length, risk, and structure.
A non-status bridging loan is a short-term, property-backed loan approved on the value of the security and a clear exit strategy, not on income or employment. It is often used for auctions, refurbishments and time-critical transactions where a traditional mortgage affordability assessment is not suitable.
A regulated bridging loan is secured on a borrower’s main residence or intended main home and is FCA-regulated with affordability and consumer protections. An unregulated bridging loan is used for investment, buy-to-let, commercial property, or land, and is assessed mainly on the property and exit strategy.
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