Updated: April 05, 2022

100% Bridging Loans

Need a 100% LTV bridging loan? It can be done! Find out exactly what your options are and how to get one in our expert guide.

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: April 05, 2022

At face value, a 100% bridging loan sounds like a dream come true for property buyers. It’s a loan for 100% of the property value, with a shorter application process than a conventional mortgage. 

Of course, it’s not quite as simple as that. 100% bridging loans are only available in very specific circumstances. You’ll usually need to secure the loan on another property and you must have a concrete plan to repay it on time. Read on to find out more, including how they work, alternatives to consider and how a broker can help you get the best deal.

The topics we’ll cover are…

Can you get a 100% bridging loan?

Yes. A 100% bridging loan is one with a loan to value (LTV) ratio of 100% that allows you to borrow enough funds to cover the entire value of the property you’re buying. This means that you won’t need to contribute any cash yourself – the lender provides all of it. Instead, you’ll usually provide security in the form of other assets, such as other properties you own.

Another way to get a 100% bridging loan is to buy a property at below market value. If the property is valued at £200,000 but you’ve negotiated to buy it at £150,000, you’ll find it relatively easy to get approval on a loan for that amount.

As standard, bridging loans are usually available up to a 75% LTV, meaning you can borrow 75% of the value of the property you are buying.

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Availability

Naturally, 100% bridging loans are much rarer than 75% bridging loans, or even 90% bridging loans. Most lenders are wary of loans for the total property value because they will struggle to recoup all their money if you fail to repay it. They will also be concerned that you don’t have any capital to contribute yourself.

A select few lenders offer 100% bridging loans. They understand that certain investors have all their wealth tied up in assets, so don’t necessarily have the liquidity to raise a cash deposit. However, they don’t usually advertise these deals and they don’t usually take direct applications. You’ll need to work with a broker to reach them.

How a broker can help

To find a 100% bridging loan, you’ll need to work with a broker who has whole-of-market access. Those who only offer products from specific lenders may not be able to find such a specialised deal for you.

Your bridging finance broker won’t only help by finding the right lender. They will also:

  • Offer advice. They will be honest and realistic with you about whether a lender will accept your assets as collateral for the loan, so you don’t waste time on applications with a low chance of success.
  • Suggest alternatives. Bridging loans aren’t the only type of financing that is available to invest in property, so a broker might be able to suggest an alternative you haven’t thought of.
  • Prepare your case. They’ll help you highlight your relevant experience and create a realistic exit strategy to pay off the loan that will convince the lender you’re not a high risk.
  • Negotiate with the lender: bridging loans are a bespoke type of finance and applications are usually assessed on a case-by-case basis. This means there is more scope to negotiate a favourable deal, and your broker will take the lead on this.

Eligibility

There are no set eligibility criteria for 100% bridging loans as they’re only offered in rare circumstances. However, it will certainly help your application if:

  • You can secure the loan on a high-quality property. Ideally, it will be a property the lender would find easy to sell if repossessed. Value, location, and property type will all be factors.
  • You have a good credit history. Some lenders will look past certain credit issues, but you’ll likely have access to better deals if your history is spotless.
  • You have experience in property. You’ll be seen as a lower risk if you’ve completed similar projects successfully in the past.
  • You have a strong exit strategy. You won’t get any kind of bridging loan without this, let alone a 100%. The exit would usually be a remortgage or the sale of the property.

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Things to be aware of

100% bridging loans have some risks and downsides you should carefully consider. The most significant risk is that, if you can’t make your repayments, the property or assets you’ve used as security could be repossessed.

Plus, the set-up costs for your loan could be higher than other bridging loans as they will include valuation fees for any property and assets you’re using as collateral.

Another downside is the low chance of approval. You will have a greater chance of success if you have even a small deposit, as 90% LTV bridging loans are available from more lenders. This helps to demonstrate to lenders that you’re capable of raising capital when necessary.

You can, however, minimise these risks by working with a broker who specialises in arranging 100% LTV bridging finance deals.

Alternatives

All property financing types have advantages and disadvantages. As well as considering bridging loans, you could consider:

Remortgaging another property

If there is another property in your portfolio that you currently own a significant amount of equity in, you could increase your borrowing against it by remortgaging. This might provide the capital you need to complete a new property purchase.

Development finance

If you’re investing in a development project, then development finance could be a good alternative to a bridging loan. Some lenders will fund 100% of the project in the right circumstances.

Unsecured loans

Could be an option if you already have some capital but need top-up funds of £25,000 or less or if the amount you need to borrow to achieve your plans is relatively small.

Getting matched with a bridging finance specialist

Whether you’re ready to apply for a 100% bridging loan, you’d like to know more about the advantages and disadvantages, or you’re still comparing different financing methods, the next step is to speak to an expert bridging finance broker.

Someone who has experience with 100% bridging loans and other types of specialist financing for property investors will be able to answer all your questions. They’ll also understand the speed you need to move at and will handle your queries efficiently and thoroughly.

We work with a number of brokers with this specialist experience, who you can reach through our free broker-matching service. To talk to someone today, simply call 0808 189 0463 or make an enquiry online.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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