Bridge-to-let
Use a bridging loan to buy and improve a property quickly, then switch onto a buy-to-let mortgage once it is ready to let.
How bridge-to-let works
- Buy with a short-term bridge, often a property a mortgage lender won't touch yet, or one you need to complete on quickly.
- Improve and let: carry out the works and put a tenant in.
- Refinance onto a buy-to-let mortgage based on the new value, repaying the bridge.
Some lenders offer both stages as one package, with the buy-to-let terms agreed up front, which takes away much of the risk of the exit.
Why the exit has to work on day one
A bridge is only as good as its exit. Before you start, check that the property will pass the buy-to-let lender's rent test at the loan you need, typically rent covering the interest by 125% for limited companies and basic-rate taxpayers, or 145% for higher-rate taxpayers, at a stressed rate. If the rent won't support the refinance, you may have to leave money in or sell.
Timing the refinance
Some buy-to-let lenders will refinance within six months of purchase, on the new valuation, once works are done; others want you to wait. Knowing which lender you will exit to before you buy avoids paying bridging interest for longer than you need.
Costs to plan for
- Bridging interest and fees for the months you are on the bridge. Model them in the bridging loan calculator.
- The buy-to-let arrangement fee, valuation and legal costs at refinance.
- Stamp duty at purchase. See the stamp duty calculator.
Frequently asked questions
What is bridge to let?
A bridging loan used to buy or refurbish a property, followed by a refinance onto a buy-to-let mortgage once the property is ready to let.
Can I remortgage a bridged property within six months?
Some buy-to-let lenders will refinance within six months on the new valuation, especially after works. Others want you to wait.
What rent do I need for the buy-to-let exit?
Enough to pass the lender's rent test, typically 125% or 145% interest cover at a stressed rate, at the loan you need to repay the bridge.
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.