Updated: December 15, 2021

Bridge-to-Let Mortgages

Looking for a bridging loan to buy a rental property? Our in-depth guide will tell you everything you need to know.

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: December 15, 2021

Bridge-to-let mortgages can be complex loans to get to grips with, due to the different interest rates and the two-in-one product you’re often agreeing to, but there are circumstances when they can be a good option for buying an investment property.

By following this guide you’ll have a far better understanding about how this type of finance works, why they might be suitable and how you can get one.

What is a bridge to let mortgage?

A bridge-to-let mortgage is a ‘two-in-one’ arrangement where a bridging loan can be used as a quick, short-term funding option for purchasing a buy-to-let property before refinancing onto a long-term home loan.

All bridging loans require an exit strategy. In the case of a bridge-to-let mortgage, a lender usually won’t complete on the bridging element until at least an agreement in principle has been reached on a buy-to-let mortgage that will follow on from it.

Some lenders may insist on agreeing both the short-term bridge and the subsequent mortgage simultaneously but this doesn’t always have to be the case. You’re allowed to use one lender for the bridging loan and another for the buy-to-let mortgage, if a better deal is available.

When would you use a bridge-to-let mortgage?

This type of loan is typically used to bridge a gap in financing (hence the name) and can be used in a number of situations.

They include:

  • Buying an investment property at auction where a 28 day limit is in place for completion (bridging finance can usually be finalised within two weeks)
  • Property renovation where the intention is to remortgage after the works have been done but at the higher, post refurbishment value.
  • Buying a property currently considered ‘unmortgageable’ (due to the poor state of repair) but will be habitable once the refurbishment has been completed
  • Remortgage of an existing rental property or portfolio but more time is needed before agreeing a new long-term mortgage deal
  • If a suitable investment property becomes available before the sale of an existing property and new mortgage finance can’t be arranged in time

Whilst it’s fairly common to take a bridging loan and follow up mortgage with the same lender, because so much happens in a short space of time, it can be a good idea to seek advice from a broker with experience in bridging finance for buy-to-let properties before anything is agreed.

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How to get a bridge-to-let mortgage

If you’re in need of a bridging loan to move quickly on the purchase of a rental property, there’s a few simple steps you can take to make the process more straightforward (and swifter). Here’s how we’d recommend you do it…

Step 1. Get your documents ready and prepare your exit strategy

Having all your paperwork prepared and ready to hand in advance, particularly when time is of the essence, is a good first move. Bank statements, proof of income and address will be required.

You can find a full list of the paperwork you’ll need in our complete guide to mortgage applications.

In addition, it’s important to have a clear exit strategy in mind for the property you’re looking to buy. In the case of a bridge-to-let mortgage it’s pretty much always going to mean refinancing onto a buy-to-let mortgage.

Step 2. Speak to an experienced bridge-to-let mortgage broker

This type of finance isn’t readily available through the more well-known high street lenders you’re used to speaking with. That’s generally because the additional risks and expertise required leaves them very much in the domain of a specialist lender.

Rather than trying to find the right lender by yourself, the smart move is to speak with a broker who has experience with bridging loans and can work on your behalf, finding the right lender to deal with your particular requirements.

Your broker will be able to guide you through the whole process and manage your application, from start to finish, as quickly as they’re able so you don’t miss the opportunity to buy the property you’re looking for.

If you get in touch we can arrange for an advisor we work with, who’s best placed to help in this area, to contact you straight away.

Step 3. Download your credit reports.

Finally, reviewing your credit reports before you apply for any type of large finance is good financial practice. Bridging lenders for buy-to-let properties will tend to focus on other factors, such as the rental opportunity and exit strategy but your credit history will also be checked.

You can download your credit reports through our dedicated credit reports hub. Doing this in advance will give you the opportunity to remove any inaccurate or outdated information which could be to the detriment of your application.

What should your exit strategy be?

For all types of bridging loans, an exit strategy must be in place for the loan to be agreed. There’s actually no ‘hard and fast’ rules on exactly how you exit the bridge part of the financing, but there must be a plan to allow you to repay the initial short-term loan and move forward with your property.

Generally, the two main options available for a bridge-to-let mortgage would be:

Bullet Tick Move your bridging loan across to a buy-to-let mortgage with the same provider
Bullet Tick Choose one provider for your short-term bridging finance then use a different one, with a better deal, for your long-term finance

For some property investors, this type of finance also allows them to remortgage an entire portfolio at the same time where the purchase dates or remortgage dates are all different, with the exit strategy being a mass remortgage but all on the same date and product.

Are there limits on how much I can borrow?

Yes, they can be. Most lenders will only lend you up to a maximum of 75% of the value of the property, although that percentage could be lower at around 65% or even 50%. In some cases it will be the value of the property post-renovation (if that’s relevant) while in others, the limit might relate to the original state and purchase price.

In terms of absolute limits, this will also vary between lenders and depends on the type of property you buy and your planned exit from the bridging loan. Typically, bridge to let arrangements will hit an upper limit at the £750,000- £1 million mark, but some lenders could go higher if required.

Once you exit the short-term bridging part of the loan different limits will apply, in line with the buy to let mortgage you choose.

Due to the complex nature of this kind of home loan and the requirement for a verified exit strategy from the bridging element, it’s important to understand exactly what those limits are and how they will apply to your overall financing agreement before it’s in place.

Remember, you don’t have to agree to both elements of the financing arrangement with the same lender. You can look elsewhere and see if better terms are available through a different provider.

Get matched with a bridge to let mortgage broker

If you’re considering buying an investment property that requires specialist finance such as a bridge to let mortgage, then speaking with an advisor who has experience in this area is the right place to start.

They can guide you through the process – swiftly – and make sure your application has all the details and documentation required to get the quick response you need from the right lender.

Call 0808 189 0463 or make an enquiry and we can arrange a free, no-obligation call with a mortgage broker who has the right experience in this type of finance today.

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We can help! We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in Buy-To-Let mortgages. Ask us a question and we'll get the best expert to help.

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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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