Below market value (BMV) bridging: borrow up to 90% of the price
Bought below value? Most lenders ignore the discount. Some specialist bridging lenders lend on the open-market value, up to 90% of what you pay.
Below market value: how much can you borrow?
Illustrative day-one advance · not a quote or offer
What is a below market value purchase?
A below market value (BMV) purchase is buying a property for less than an independent valuer says it is worth on the open market: a motivated seller, a probate or repossession sale, a quick-sale discount, an auction lot or a portfolio sold in one go. The discount is equity you've created on day one.
Why most lenders ignore the discount
Most mortgage lenders lend against the lower of the purchase price and the valuation. Buy a £400,000 house for £300,000 and a 75% lender offers £225,000, so you still put in £75,000 of your own money, and the discount does nothing for your cash.
Lenders that lend up to 90% of the price
Some specialist bridging lenders we introduce to look at the open-market value instead. They will advance the lower of:
- 90% of the purchase price, or
- 75% of the open-market value in London, the South East, the South West and the East of England, and 70% elsewhere in England and Wales.
On a big enough discount, that means borrowing 90% of what you pay and finding only 10% plus costs. The calculator above shows which limit applies to your deal. The valuer has to support the market value, and every case is subject to the lender's full underwriting.
A worked example
| Typical lender | Value-based lender | |
|---|---|---|
| Purchase price | £300,000 | £300,000 |
| Open-market value | £400,000 | £400,000 |
| Lends against | 75% of the price | Lower of 90% of price or 75% of value |
| Day-one advance | £225,000 | £270,000 |
| Your cash towards the price | £75,000 | £30,000 |
Fees, stamp duty and legal costs come on top in both cases. Run the full cost in the bridging loan calculator and the stamp duty in the stamp duty calculator.
Then refinance on the value
A BMV bridge is usually short. Once you own the property, and after any works, you refinance onto a buy-to-let or commercial mortgage based on its value rather than the price you paid, often pulling most of your money back out. See bridge-to-let and refurbishment bridging.
What lenders want to see
- An explanation of why the price is below value, and the sales history.
- A valuation from the lender's panel that supports the open-market value.
- Where the rest of the money comes from, and a clear exit.
- An arm's-length transaction, or full disclosure if you are buying from family or a connected company.
Frequently asked questions
Can I get a bridging loan for a below market value property?
Yes. Some specialist bridging lenders lend on the open-market value rather than the price, up to the lower of 90% of the purchase price or 70–75% of the value.
Will a lender lend 90% of the purchase price?
Some will, where the property is bought sufficiently below value. The advance is capped at the lower of 90% of the price or 70–75% of the open-market value, depending on the region.
Why do most mortgage lenders only lend on the purchase price?
Most lend against the lower of the price and the valuation, so a discount doesn't reduce the cash you need. Value-based bridging lenders are the exception.
How do I prove the property is below market value?
The lender's panel valuer has to support the open-market value, and you'll need to explain why the seller is accepting less.
Can I refinance a BMV purchase on the higher value?
Usually, yes. Once you own it, and after any works, a buy-to-let or commercial refinance can be based on the valuation rather than the price paid, subject to the lender.
Got a deal in front of you?
Get indicative bridging terms on your case in a few minutes, or tell us about it and a specialist will come back to you.
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All finance is subject to the lender's assessment, case by case. Criteria, loan amounts, works funding and terms vary by lender and change without notice. DasLend is an introducer only. We pass enquiries to specialist lenders and FCA-regulated firms; we do not lend, advise or arrange finance. All figures are illustrative, not a quote or an offer. Property used as security may be repossessed if you do not keep up repayments.