Revolving Credit Mortgage, Property Revolving Credit Facility

What is a revolving credit mortgage?

A revolving credit mortgage, or revolving credit facility for property, is a secured credit limit, approved once, that the borrower draws against, repays and draws again during the life of the facility. A developer, auction buyer or portfolio owner can then fund a series of purchases or projects without a fresh application each time. It works like an overdraft secured on property: funds are available on request up to the agreed limit, and every repayment frees that part of the limit again. A term mortgage is advanced once and repaid on a schedule, while a revolving facility is reviewed and renewed at intervals instead of being paid down.

Lenders offer the structure within two kinds of lending. Bridging lenders offer revolving bridging facilities to repeat purchasers, where each drawing funds a short-term purchase or refurbishment and is repaid when that property is sold or refinanced. Some commercial lenders and private banks offer longer facilities against buy to let portfolios and income-producing property, alongside or in place of commercial mortgages. In our experience those facilities commonly start at £500,000, although some products are available for smaller limits.

In corporate finance a revolving credit facility (RCF) is often unsecured working capital for a large company. In property finance it is secured, by a charge over each property funded, over a pool of properties or over the borrower's existing portfolio, and every drawing is tested against the lender's loan to value and eligibility rules. The facility agreement sets the limit, the term, the security and the conditions for each drawing, along with the interest, the fees and the events that let the lender stop further drawings.

We arrange revolving facilities for developers running several refurbishments a year, auction buyers who want funds committed before they bid, trading businesses that own their premises, portfolio landlords recycling capital between purchases, and company groups and family offices with a pipeline of commercial purchases. Bridging and commercial lenders set different facility terms, drawing rules and security structures, so the pattern of your deals decides which kind of lender fits.

Revolving facilities to companies, partnerships and investors are business lending. A regulated mortgage contract is credit to an individual or to trustees secured on land, at least 40% of which is used or intended to be used as a dwelling (Regulated Activities Order, article 61), so a facility to a company falls outside the definition. A facility to an individual for a property business is excluded as an investment property loan where less than 40% of the land is used, or intended to be used, as a dwelling by the borrower or a related person (article 61A). A related person includes a spouse, partner, parent, child or sibling. Credit over £25,000 taken wholly or mainly for the borrower's business is also exempt from the consumer credit rules (article 60C). A drawing secured on a home the borrower or a related person lives in, or will live in, would usually be a regulated mortgage contract, arranged and lent under the Financial Conduct Authority's MCOB rules. The exception in article 61A is a second charge for more than £25,000 taken wholly or mainly for the borrower's business, as our page on a remortgage for business purposes explains. For an owner-occupied home, the nearest equivalent is an offset mortgage, a regulated residential mortgage that sets savings against the balance and, on some products, lets overpayments be drawn back.

Revolving credit mortgage rates

A revolving facility is priced in two parts: a rate on the funds drawn, and fees on the facility itself. On commercial and private bank facilities the rate on drawn funds is set as a margin over a reference rate, such as Bank Rate or SONIA (the Bank of England's overnight sterling benchmark), or as a fixed rate. Revolving bridging is priced as bridging, as a monthly rate on each drawing. The fees sit on the limit and the security. An arrangement fee is charged on the limit at set-up, and on some facilities again at renewal. A non-utilisation fee (also called a commitment fee) runs on the part of the limit left undrawn, and valuation and legal costs fall on each property, repeated when the lender revalues. On private banking facilities, pricing is set on the whole relationship.

Revolving facilities can price above a term loan on the same security, because the lender commits capital it may not earn interest on. The comparison to run is the cost at the level of use you expect. A low rate on drawn funds with a high fee on the undrawn limit is expensive for a borrower who draws rarely, and a borrower who stays fully drawn pays interest on the whole limit as well as the facility's fees. The worked example further down this page runs that comparison on four purchases a year, and the bridging loan guide sets out how single bridging loans are priced.

Running more than one deal a year? Get in touch with your pipeline, your track record and the properties or portfolio available as security. How often you draw, and how much, decides whether a facility costs less than arranging each deal separately.

Revolving credit mortgage criteria

Lenders look at the same points on every revolving facility, and each sets its own terms for them. Three rows are Mortgage Lane's experience on the cases we arrange, as at October 2026, and are not a rule for the whole market. They are the minimum facility (commonly £500,000, with some products for smaller limits), the limit (sometimes up to 75% loan to value) and the availability period (up to five years). The regulation row rests on the Regulated Activities Order and the buy to let standards row on the Prudential Regulation Authority's SS13/16. The other rows describe how lenders differ on the security, the borrower and their own underwriting.

Types of revolving facility, and who each is for

Revolving credit against property comes in five forms, sorted by who lends it, what secures it and what the borrower is doing with it.

Portfolio revolving credit facility for buy to let

A limit is agreed against a landlord's portfolio, with several buy to let properties cross-collateralised under one facility. It is drawn to buy the next property, refurbish an existing one or bridge a purchase before a term refinance, and repaid from refinances, sales or rental surplus. The lender sizes the limit against the portfolio's value at its loan to value, tests rental coverage across the whole portfolio, and reviews the facility at intervals set in the facility agreement. Portfolio landlords (borrowers with four or more mortgaged buy to let properties, as the PRA's SS13/16 defines them) are the natural borrowers, and the facility sits alongside or in place of the portfolio term lending covered on portfolio mortgages and portfolio remortgages.

Get in touch with the portfolio schedule (properties, values, rents and existing charges) for a portfolio facility.

Commercial property revolving facility

A facility secured on commercial or semi-commercial property, such as an investment block or a trading business's premises, used by property companies and trading businesses for acquisitions, works and working capital. The lender underwrites the security's investment or trading value and the borrower's income cover as it would on a commercial mortgage, and the revolving structure adds availability period, commitment fee and review terms. The section on revolving commercial mortgage facilities below covers who uses one and how it is underwritten.

Private banking revolving facility

Private banks offer revolving facilities to high net worth clients against property, investment portfolios or both, priced and sized on the whole relationship (assets under management, income structure and the client's wider borrowing) instead of a product's published criteria. The routes are covered on private bank mortgages and high net worth mortgages.

Get in touch for a private banking facility against property and wider assets.

Revolving bridging facility

Bridging lenders give repeat purchasers a pre-agreed limit, drawn for each purchase and restored when it is repaid. Speed and certainty of funds at auction are the main reason to have one, and the section on revolving bridging facilities below covers how the drawings work, with the auction use on auction property loans.

Development and trading business facilities

Developers running a programme, and trading businesses with property assets, use revolving facilities for working capital and site acquisition ahead of scheme-specific development finance. The facility sits at company level, secured on the company's assets, with development funding drawn per scheme. A one-off need for short-term business funds suits a single business bridging loan.

Ask us about a company-level facility alongside development finance.

Offset and flexible mortgages: the residential equivalent

Revolving credit facilities are business lending. On an owner-occupied home an offset mortgage gives the closest flexibility: savings held with the lender are set against the mortgage balance, reducing the interest charged while remaining accessible, and some offset and flexible products allow overpayments to be drawn back. Offset mortgages are regulated residential lending under MCOB, assessed on the borrower's income, and can suit borrowers with variable income or cash they may need later, such as the self-employed and contractors. Savings that are offset earn no interest, which is the trade-off.

Get in touch about an offset or flexible mortgage on your home.

Revolving bridging facilities

A revolving bridging facility is a pre-approved bridging limit that funds a sequence of short-term purchases, each secured on its own property and each repaid when that property is sold or refinanced. Our bridging guides have short notes on using a revolving facility with a bridging loan and on where revolving facilities fit in bridging finance.

The borrower's credit, experience and legal structure are approved once, so each drawing needs only the property's valuation, a title review and a charge, and the facility documents agreed at the start shorten the legal work on each purchase. An auction buyer can bid knowing the funds are committed, subject to the lot meeting the facility's property rules. At auctions of property in England and Wales run on the RICS Common Auction Conditions, completion falls 20 business days after the contract date unless the special conditions set another date. With the funds approved in advance, the valuation and legal work on the lot itself are the steps left to fit into that period. Interest on each drawing is retained, rolled up or serviced, as on a single bridge.

The exit of each drawing is still assessed, usually the sale of the refurbished property or a refinance onto a buy to let or commercial mortgage, because a drawing that cannot exit ties up that part of the limit. Our pages on remortgaging after a bridging loan and exit strategies cover what a refinance lender looks for. A drawing that overruns its term has to be extended by the lender, or the property sold or refinanced. Refinancing it onto a bridge with another lender is re-bridging.

Revolving bridging suits developers and refurbishers with several light or medium refurbishments a year, recycling the limit as each project sells or refinances. It also suits auction buyers drawing against a standing limit, portfolio landlords buying below market value stock, refurbishing it and refinancing onto buy to let, and HMO converters funding the purchase and works before an HMO mortgage is available.

Send us your last 12 months of deals and the next 12 months' pipeline for a revolving bridging facility.

Revolving commercial mortgage facilities

A revolving commercial facility is a longer-term secured credit line, backed by commercial or mixed-use property the borrower already owns, which the borrower can draw, repay and redraw for working capital, acquisitions or capital expenditure. It sits alongside, or instead of, an amortising commercial mortgage on the same property.

Owner-occupier businesses whose premises hold substantial equity and whose cash flow is uneven, such as seasonal trades and contractors paid in stages, draw against the property in lean months and repay in strong ones. Investors holding let commercial property use a facility to keep capital available for the next deposit without remortgaging each time. Owners of mixed-use portfolios can pool the properties as security for one facility, and semi-commercial mortgages explains how lenders treat mixed-use security. For trading property such as hotels and care homes, the lender sizes the facility on a going concern valuation and sets covenants on operating profit. In our experience hotel lending stops at 75% loan to value. Short-term finance on a hotel is covered on hotel bridging loans.

The lender values the security and sets the limit at a loan to value across the pool, then applies an interest cover or debt service cover covenant: the rent or trading profit must cover the interest, or the interest and capital, at the lender's stated ratio. Some lenders test that cover on the full limit, so that the facility stays affordable if it is fully drawn, and others on the expected drawn balance. Accounts, rent schedules, valuations and any personal guarantees are reviewed at the intervals the facility agreement sets, and some facilities reduce the limit on a schedule to build in repayment. Where a facility rests on one or two directors, key person insurance can give the business the money to repay it if a director dies or, where the policy covers it, becomes seriously ill. Commercial property held in a pension scheme is financed within the scheme's own borrowing limits, covered on SSAS and SIPP mortgages, and the scheme administrator confirms what the scheme can borrow.

For a commercial revolving facility, send us the property schedule, the rents or trading accounts and what the funds are for.

What a revolving credit facility costs

A revolving facility has four cost lines, and the facility that costs least is the one whose fees match how much of the limit you use. Interest runs on the drawn balance. The arrangement fee runs on the limit, the non-utilisation fee on the part left undrawn, and valuation and legal costs on each property funded.

Renewal fees, exit fees and monitoring surveyor fees on funded works appear on some facilities. A borrower who keeps the facility largely drawn pays mainly interest, and one who keeps it as a standby pays mainly arrangement and non-utilisation fees for the certainty of having funds on call.

Revolving credit facility, term loan or single bridge?

A single loan suits one deal, and a revolving facility suits a pattern of deals or a recurring need for capital secured on property the borrower already owns. A term mortgage can cost less per pound borrowed and is fixed in structure. A second charge mortgage raises capital once against equity without disturbing the first charge. A bridging loan funds a single purchase at speed for a defined period, and a revolving facility funds repeated activity on call, at a premium for the flexibility. Some owners hold both kinds: a term mortgage on their core property and a revolving facility for acquisitions or working capital.

How a revolving credit facility is arranged

1. Pipeline, security and strategy. The track record, the pipeline of deals, the portfolio or asset schedule (properties, values, rents, existing charges), the borrowing entity's accounts and the intended use of funds are set out, and the facility type (bridging lender, commercial lender or private bank) and size are matched to the scale.
2. Indicative terms. The limit, availability period, loan to value on each drawing, interest basis, fees, covenants and review cycle are agreed in principle with lenders whose appetite for facilities fits the case.
3. Underwriting and valuation. The lender reviews the borrower's credit, accounts and guarantees and values the security. For portfolios each property is inspected or given a desktop valuation, as the lender requires.
4. Legal work and security. The facility agreement is signed and the security put in place. In England and Wales that is a legal charge over each property, which, over registered land, operates at law only once it is registered at HM Land Registry (Land Registration Act 2002, section 27). In Scotland it is a standard security, the form any security over land for a debt must take (Conveyancing and Feudal Reform (Scotland) Act 1970, section 9), and in Northern Ireland the charge is registered with Land and Property Services, which keeps the Land Registry (nidirect: searching the Land Registry). A debenture over the borrowing company and any personal guarantees the lender requires are added, and a charge created by a company is delivered to Companies House for registration within 21 days, beginning with the day after it is created (Companies Act 2006, section 859A). The cross-collateralisation and release provisions, which set how a property comes out of the security when it is sold, are documented at this stage. Your solicitor reviews the facility agreement, the security documents and the release terms before you sign.
5. First drawing. The first property is valued and charged, and the funds are released.
6. Drawings, review and renewal. Further drawings follow on request within the limit, and exits repay them and restore the limit. The lender reviews the facility against its covenants and revalues the security periodically, and before the availability period ends the facility is renewed, resized or repaid.

Revolving credit mortgage explained: how the facility works

A revolving facility separates approval from funding: the lender approves the borrower and the limit once, then funds each deal as a drawing within it. Five mechanisms in the facility agreement make it work differently from a term loan, and each is worth negotiating.

1. The limit and how it is sized. The lender sets the limit against the security's value at its loan to value for the asset class, less any existing charges. Illustratively, a portfolio valued at £2,000,000 with a lender loan to value of 75% supports a £1,500,000 gross limit; with £700,000 of existing term mortgages ranking ahead, the available facility is £800,000. (Illustrative arithmetic. In our experience revolving facilities sometimes reach 75% loan to value; the band is set lender by lender and asset by asset, and can sit lower.) For portfolio landlords the limit is also tested on rental coverage across the whole portfolio. Banks and building societies apply the PRA's SS13/16 underwriting standards to buy to let mortgage contracts, with an interest coverage test and a specialist approach to portfolio landlords. The statement excludes corporate lending through a bank's corporate or commercial banking division and contracts of 12 months or less, and facilities outside it are tested on the lender's own coverage rules. The buy to let mortgage guide describes the portfolio-wide assessment.

2. Draw, repay, redraw. For each purchase the borrower sends a drawing request, and the lender values the property, checks it against its eligibility and loan to value rules and releases funds against a charge over it, with no new credit application. The notice period and any minimum drawing depend on the facility terms, and any repayment restores the availability. A property bought with a drawing can be refinanced onto a term mortgage and the drawing repaid, ready for the next purchase. A refurbishment can be funded, the property refinanced at its improved value, and the facility restored. Used this way, the facility is the working capital of a property business.

3. Interest on the drawn balance, a fee on the rest. Interest runs only on what is drawn. Illustratively, on a £1,000,000 limit where the average drawn balance across the year is £400,000, interest at the illustrative 5.2% rate used across our guides is £20,800 against £52,000 on a fully drawn £1,000,000 term loan: a £31,200 difference before the commitment fee the lender charges on the £600,000 undrawn. (Illustrative; 5.2% is not a product rate and the commitment fee is set by the lender.) The comparison to run is that difference against the fee and any higher margin the revolving facility carries.

4. Review, revaluation and the limit. Revolving facilities are reviewed at intervals set in the facility agreement, against covenants on rental coverage and loan to value, and the security is revalued periodically. A fall in values or rents can reduce the limit or trigger a repayment; a rise can support an increase. The lender can also refuse a drawing on a property outside its criteria. An event of default, such as a covenant breach, a missed payment or a material adverse change, lets it stop further drawings, and the facility agreement can also let it cancel the facility and demand early repayment of the drawings outstanding. The availability period is finite (up to five years on the facilities we see), and at expiry the facility is renewed, resized or repaid. A term loan does not carry that renewal risk.

5. Security and release. Portfolio facilities cross-collateralise: every property in the facility secures the whole limit, and a property is released from the security only on terms, usually repayment of an agreed release amount. Selling one property therefore involves the facility, and the release provisions are negotiated at the outset.

Revolving credit mortgage pros and cons

The trade is flexibility for cost and conditions, and it pays where the borrower's activity is repeated and the capital would otherwise sit idle or be re-underwritten each time.

Revolving credit suits portfolio landlords buying and refinancing repeatedly, auction and refurbishment investors, property companies with working-capital needs, and high net worth borrowers managing liquidity against assets. It does not suit a single purchase, a borrower who will stay fully drawn for years, or a smaller portfolio below the minimum; for them a term mortgage, a second charge or a single bridging loan is usually cheaper and simpler.

The commercial mortgage guide covers the commercial security a facility sits on. BMV mortgages explains how mortgage lenders treat a discounted purchase refinanced off a bridge.

Four purchases, one facility: the arithmetic

A revolving facility saves money where the costs it removes, repeated arrangement fees and repeated set-up, are larger than the costs it adds, chiefly the fee on the part of the limit left unused. The arithmetic below uses hypothetical costs to show how the comparison works; a real one uses the quotes for both routes.

Step 1. The pipeline

An illustrative developer buys four properties a year, each needing a £200,000 bridge for three months, with never more than two drawn at once. Four drawings of three months each add up to 12 months of one £200,000 drawing, so the average drawn balance across the year is £200,000. A £400,000 limit covers two drawings at once, and on average £200,000 of it is undrawn.

Step 2. Four separate bridges

Each separate bridge carries its own set-up costs: an arrangement fee, the borrower's legal costs on a new loan and a valuation. The figures in the table are hypothetical, chosen to show the arithmetic, and are not any lender's fees or our panel terms.

Step 3. One £400,000 facility

The facility is set up once, with one arrangement fee on the limit and one set of facility documents, and each drawing then needs a valuation and shorter legal work. The non-utilisation fee runs on the average £200,000 left undrawn. Interest is left out of both routes because it accrues on the same drawn balances, assuming the same rate; a higher margin on the facility would add to its cost.

Step 4. Where it breaks even

On four deals the facility costs £20,000 against £27,000 for separate bridges, a saving of £7,000. With fewer deals the facility's fixed costs stay the same and more of the limit sits unused, so the non-utilisation fee rises in proportion to the undrawn balance. On two deals a year the average drawn balance is £100,000, the undrawn balance £300,000 and the fee £3,000, so the facility costs £18,000 against £13,500 for two separate bridges, £4,500 more. On these figures the facility starts to save money at the third deal of the year.

What decides the case

Count the deals, estimate how much of the limit will be drawn on average, and price both routes on the same pipeline before committing. The calculator on this page works out the undrawn balance and the commitment fee for any limit and average drawing. The facility's fees also buy committed funds and faster drawings, which a buyer competing on completion time, at auction for example, may value more than any difference in cost.