Mortgages
Re-Bridging Loans, What Is Re-Bridging and Bridging Extensions
Re-bridging loans: refinancing one bridge with another, how it compares with an extension, the costs, what a new lender checks and how the loan to value rises.
- Published
- 8 Oct 2026
- Last reviewed
- 8 Oct 2026
- Reading time
- 21 min
Expert advice on re-bridging loans
Speak to a Mortgage Lane adviser about your options.
In short
Re-bridging pays off a bridging loan nearing its end date with a new one, giving the sale, refinance or development meant to repay it more time. The new loan covers the full redemption figure plus its own fees and interest, so the debt and the loan to value rise. An extension from the existing lender avoids a second arrangement fee, though it usually has a fee of its own, and is worth pricing first.
What is re-bridging?
Re-bridging is refinancing an existing bridging loan with a new bridging loan, usually from a different lender, so the borrower has more time to complete the original exit when it has not happened by the end of the first loan's term. The exit is the sale, refinance or development step that was meant to repay the first loan. The new loan repays the old one in full, including any rolled-up interest, exit fee and extension or default charges, and it carries an arrangement fee, a valuation, legal costs and interest of its own. The debt grows with each refinance, and so does the loan to value (LTV). The same arrangement is also called rebridging, a re-bridge loan or a bridge to bridge refinance.
A bridge that is close to its end date can be extended by the existing lender, re-bridged, repaid from a sale or refinanced onto a term mortgage. An extension keeps the same loan for longer. A re-bridge moves the debt onto another bridging loan with a new term, usually with a new lender. Remortgaging onto a buy to let, residential or commercial mortgage is a permanent exit from bridging, and our page on remortgaging after a bridging loan covers it. A re-bridge suits a case where the planned exit is still coming but will not be ready by the end date, and the existing lender will not extend or will extend only on terms that cost more.
The new lender underwrites the case from the start. It instructs its own valuation, assesses the borrower and tests the exit strategy harder than the first lender did, because the first exit has already slipped. It wants the reason for the delay and evidence that the delay is ending. The new loan has to cover the whole figure on the existing lender's redemption statement, so the longer the overrun, the larger the new loan. Our guide to exit strategies and why bridging loans get refused sets out how lenders judge an exit.
A re-bridge on investment or development property, or to a limited company, is usually business lending outside regulation. A re-bridge to an individual on a home lived in, or to be lived in, by the borrower or a related person, such as a spouse, partner, parent or child, is normally a regulated mortgage contract, and the Financial Conduct Authority (FCA) rules in MCOB then apply to it. The regulated re-bridging section below sets out the legal test and what changes when a regulated bridge is refinanced or extended.
Mortgage Lane arranges re-bridges for developers whose works or sales have overrun, landlords whose remortgage valuation or rent test fell short, buyers whose onward sale collapsed, borrowers waiting on planning permission, a lease extension or a title correction, and borrowers whose lender will not extend. Our bridging loans and business bridging loans pages cover the underlying product, and the bridging loan guide explains interest, costs and loan to value in more detail.
Re-bridging rates
A re-bridge is priced as a new bridging loan at the new loan to value, and the lender adds to the price where it sees more risk. Bridging lenders quote a monthly rate, set by the loan to value, the type of property, the strength of the exit and the borrower's record. On a re-bridge the lender also weighs the history of the first loan: an exit that has already failed once, a loan that is past its end date, or interest and charges that have been building up on it. A case with a clear reason for the delay and an exit that is now close, such as an exchanged sale or a mortgage offer, tends to be priced nearer to an ordinary bridge than one where the exit is still uncertain.
Each re-bridge also carries a full arrangement fee on the new gross loan, a new valuation, legal costs for both sides and interest for the new term. That interest can be retained from the advance, rolled up or paid monthly, depending on the lender and on whether the borrower has income to pay it. Bridging interest is normally calculated on the gross loan, so retained interest and a fee charged as a percentage both grow with the loan they are part of. The fair comparison is the total cost to the new exit date, set against the cost of extending the existing loan to the same date. A lower monthly rate on a re-bridge can still cost more than an extension once the second fee and the legal costs are counted. Our guides to how bridging loan interest works and what a bridging loan costs explain each element.
Bridge running out before your exit? Get in touch with the redemption figure, the end date and what is delaying the exit. We price an extension, a re-bridge and a sale side by side while there is still time to use the cheapest of them.
Re-bridging criteria
The table sets out what a re-bridging lender checks. The regulation row rests on articles 61 and 61A of the Regulated Activities Order, as at October 2026. The other rows describe how lenders assess a re-bridge. Each lender sets its own maximum loan to value, term and conduct rules, and its underwriting decides each case, so the table gives no figures for them.
Re-bridging criteria
| Criterion | What the lender looks at |
|---|---|
| Purpose | Repaying an existing bridging loan on the same property in full, with time to complete a defined exit |
| Amount | The full redemption figure (capital, rolled-up or unpaid interest, exit fee, extension or default charges) plus the new lender's fees, costs and any retained interest |
| Loan to value | Within the new lender's maximum on its own valuation, measured on the larger debt; the maximum varies by lender, property type and exit |
| Exit | Evidenced and nearer than at the first bridge: a sale agreed or exchanged, planning granted, works complete, a tenancy in place or a remortgage application under way |
| Reason for the delay | Explained, with evidence that it is resolved or resolving |
| Term | Set by the lender to fit the remaining exit; a shorter term adds less interest to the loan |
| Conduct of the existing loan | Interest and charges paid or rolled up as agreed and contact kept with the lender; fewer lenders consider a loan already past its end date or in default |
| Valuation | A new valuation instructed by the new lender; a lower figure raises the loan to value |
| Borrower | Individuals, limited companies and SPVs; experience, assets and liabilities reviewed, and some lenders ask company directors for a personal guarantee |
| Regulation | Regulated where an individual borrows against a property at least 40% used or intended to be used as a dwelling, unless an exclusion such as an investment property loan applies; loans to companies are outside the definition |
| Nations | Lenders differ on where they lend; Scotland uses the standard security and Northern Ireland its own registers, so the legal work differs |
Why borrowers re-bridge, and how each case is assessed
Each reason for a delay calls for different evidence, and the new lender reads the reason before anything else.
Works or sales have overrun
A refurbishment or development has taken longer than planned, or the finished units are selling more slowly than forecast. The new lender wants to see the works complete or close to complete, the remaining budget funded and sales evidence such as reservations or agreed sales. Where a monitoring surveyor has been reporting on the works, its latest report carries weight. A finished scheme that is selling may suit development exit finance, which refinances a development loan at the sales stage, as our page on development exit loans explains.
The remortgage fell short
The term lender's valuation came in low, the rent failed its interest cover test, or the borrower had not owned the property for the term lender's minimum period, often called the six-month rule. A re-bridge buys time to pass the ownership period, let the property or evidence the value with comparable sales. The new lender wants the term lender's decision in writing and a reason to believe the next application will pass, such as an agreement in principle or a signed tenancy. Where the planned exit is a buy to let mortgage, our bridge to let page covers the move from one to the other.
The sale fell through
A buyer withdrew or the chain collapsed after the property was marketed at a price the first lender relied on. A re-bridge suits a property that will resell at a price the evidence supports. The new lender looks at the marketing history, the offers received and the agent's advice on price and timescale. Some lenders use a value that assumes a restricted marketing period, which can sit below the open market value. A homeowner who bought before selling and whose sale has fallen through is in the regulated position described further down this page.
Planning, title or lease delays
The exit depends on planning permission, a lease extension, a title correction or a licence that is taking longer than expected. The new lender wants evidence of progress: a validated application with a decision date, a solicitor's update or the landlord's response to a lease claim. In England a council has 8 weeks to decide most planning applications and 13 weeks for major development (gov.uk: determining a planning application). In Scotland the period is two months, or four months for major development, from the date the application is validated (Scottish development management regulations, regulation 26). Wales and Northern Ireland set their own periods. Where the exit depends on a permission, the lender may also value the property without it, in case it is refused.
The existing lender will not extend
Some lenders do not extend a loan, and others extend only for a fee and a rate that make a re-bridge cheaper over the remaining time. A re-bridge can also release more money where the value has risen, for example to finish works, within the new lender's maximum loan to value. The extra borrowing adds to the debt, so it needs an exit that repays it, such as a higher sale price backed by evidence or a larger term mortgage.
A trading property
A hotel, pub or other trading business bridged while its trade recovers is valued on that trade as well as on the building, usually through a going concern valuation. A re-bridge then turns on the latest accounts, the occupancy and the progress towards the trading figures a term lender will accept. Our hotel bridging loans page covers how those cases are valued and refinanced, and the hotel mortgages page covers the term loan that follows.
A loan already past its end date
A bridge that has passed its end date may be accruing default interest and charges under the loan agreement, and the lender can take steps to enforce its security. A re-bridge can stop the charges building up, but fewer lenders take on a loan that is already in default, the redemption figure is larger, and the new lender will ask why the loan was not repaid or extended in time. A regulated bridge past its end date has protections under MCOB, set out in the regulated section below.
An English council has 8 weeks to decide most planning applications and 13 weeks for major development, and a re-bridging lender waiting on a permission may also value the property without it in case it is refused.
How a re-bridge works
The existing lender issues a redemption statement: the full amount needed to repay the loan on a given date, often with a daily amount to add for each later day. It includes the capital, the interest rolled up or still unpaid, any exit fee, any extension or default charges, and the lender's own costs of redemption. Where interest was retained at the start, the statement shows whether any unused part is credited back, which depends on the loan agreement.
The new lender sizes its offer on that figure. Its gross loan has to cover the redemption amount, the costs it adds to the loan, its arrangement fee and any interest it retains for the new term. The net loan, the cash the new lender releases, goes almost entirely to the old lender. A re-bridge therefore raises the debt without putting new money in the borrower's hands, unless the value supports extra borrowing.
Solicitors then do the legal work. The new lender's solicitor checks the title, the existing charge and any other charges registered against the property, and the borrower's solicitor obtains the final redemption figure and arranges repayment on completion. Some bridging lenders let one firm act for both sides; our guide on whether you need a solicitor for a bridging loan explains the options.
On completion the old lender is repaid, its charge is discharged and the new lender registers its own. In England and Wales the old charge is removed from the register by a discharge on form DS1, lodged with HM Land Registry with the application to remove it, or by an e-DS1 or electronic discharge sent by the lender (HM Land Registry practice guide 31). In Scotland a security over land for a debt has to be a standard security (Conveyancing and Feudal Reform (Scotland) Act 1970, section 9), and the new lender's standard security gives it a real right in security over the property once it is registered (section 11). In Northern Ireland, Land & Property Services keeps the Land Registry, where the folio for each registered title records the mortgages affecting it, and the Registry of Deeds for unregistered land (nidirect: property and land information). The borrower then has the new term to complete the exit that was delayed.
Extension or re-bridge?
An extension avoids a second arrangement fee and needs less legal work, so for a short, evidenced delay it is often the cheaper route. A re-bridge is the route when the existing lender will not extend on acceptable terms, or when more time or more money is needed than an extension would give. The table compares the four ways out of a bridge that is reaching its end date.
Extension, re-bridge, sale or remortgage
| Point of comparison | Extension with the existing lender | Re-bridge with a new lender | Sale | Term remortgage |
|---|---|---|---|---|
| New valuation | Sometimes, at the lender's discretion | Yes | The market sets the price | Yes |
| Fees | An extension fee where the lender charges one | A full new arrangement fee | The agent's fee | The term lender's fees |
| Legal costs | Usually limited to documenting the extension | Solicitors for the new lender and the borrower | Conveyancing | Conveyancing for the remortgage |
| Speed | Usually the fastest | Weeks, for the valuation and legal work | Depends on the buyer and the chain | Weeks |
| Extra funds | Rarely | Possible where the value supports it | Releases the equity | Possible within the term lender's limits |
| Regulated loans | Affordability assessed as if it were a new loan or, where interest rolls up, the effect on remaining equity discussed; the borrower must positively choose to extend (MCOB 11.6.55R) | A new regulated contract: affordability under MCOB 11.6.2R unless interest rolls up, and a credible repayment strategy (MCOB 11.6.41R) | No new borrowing | Assessed under MCOB where the new mortgage is regulated |
| Suits | A short, evidenced delay | A lender that will not extend, or a longer delay | An exit that is not coming | A property that now meets the term lender's criteria |
For a regulated bridge, MCOB sets rules for an extension. Rule 11.6.55R requires the lender to assess affordability as if the extension were a new loan or, where the loan is an interest roll-up mortgage and that test does not apply, to discuss with the borrower what the extension does to their remaining equity before they commit. The lender must not extend unless the borrower has made a positive choice to do so (FCA Handbook: MCOB 11.6). On an unregulated bridge the extension is a matter of contract between the borrower and the lender. Asking before the end date leaves time to compare the extension terms with a re-bridge before any default charges apply. In the worked example further down, the re-bridge adds a £6,700 arrangement fee and £3,000 of valuation and legal costs. An extension would avoid the fee and some or all of those costs, set against whatever extension fee and rate the existing lender quotes and any valuation it requires.
What the new lender looks for
A re-bridging lender is lending to a borrower whose first exit has not happened, so it starts with the reason. It wants to know what delayed the exit and why it will now complete, with documents to show it: the agent's sales memorandum, the planning authority's record of the application, the term lender's decision or the monitoring surveyor's report. It then looks for an exit that is nearer than it was at the first bridge, such as a sale agreed, works signed off, planning granted, a mortgage offer or application, or a tenancy in place.
After the larger debt and the new fees, the loan to value has to sit within the lender's maximum with some room to spare, because interest added during the term pushes it up again. A down valuation from the new lender's valuer can close that room on its own. The term needs to be long enough for the exit and short enough that the interest does not use up the equity. Lenders also look at how the borrower handled the first bridge: whether interest was paid or rolled up as agreed, whether the borrower kept the first lender informed, and whether any default was recorded. Company borrowers are assessed through their directors and shareholders, and some lenders ask the directors for a personal guarantee.
Our guide to loan to value on a bridging loan explains how bridging lenders measure it, and our declined mortgages page covers the routes back after a refusal.
What a re-bridge costs
A re-bridge costs whatever the old loan charges to close, plus the full set-up costs and interest of the new one. On the old loan that means the interest accrued to the redemption date, any exit fee, and any extension or default charges. On the new loan it means the arrangement fee, the valuation, legal costs for the lender and the borrower, and interest for the new term, which may be retained at the start, rolled up or serviced monthly.
What a re-bridge costs
| Cost | On the old loan | On the new loan |
|---|---|---|
| Interest | Accrued or rolled up to the redemption date | Retained, rolled up or paid monthly for the new term |
| Exit fee | Where the old agreement has one | Where the new agreement has one, payable at the next exit |
| Extension or default charges | Where incurred under the old agreement | None at the start |
| Arrangement fee | None | Charged on the new gross loan and often added to it |
| Valuation | None | The new lender's valuation |
| Legal costs | The redemption | The new lender's and the borrower's solicitors |
Some lenders refund or credit retained interest that is unused when a loan is repaid early and others do not; the loan agreement and the redemption statement show which applies. A minimum interest period in the old agreement can also mean paying for months the loan did not run. For a regulated loan, MCOB requires an early repayment charge to be a cash amount and a reasonable pre-estimate of the lender's costs (MCOB 12.3.1R). It also limits charges for a payment shortfall to a reasonable calculation of the extra administration cost (MCOB 12.4.1R) and prohibits excessive charges (MCOB 12.5.1R). An unregulated agreement is governed by its own terms, and a solicitor can say whether a charge in it can be challenged. Where these costs are added to the new loan, each re-bridge raises the debt against the same property, as the worked example below shows.
Regulated re-bridging
A re-bridge is a regulated mortgage contract when an individual borrows against a property of which at least 40% is used, or intended to be used, as or in connection with a dwelling, unless an exclusion applies (Regulated Activities Order, article 61). The test turns on the borrower and the land. A loan to a limited company is outside it, because the borrower has to be an individual or trustees. A loan to an individual is excluded as an investment property loan where less than 40% of the property is used as a dwelling by the borrower or a related person, and the loan is taken wholly or mainly for business purposes (article 61A). A related person is a spouse, civil partner or partner, or a parent, brother, sister, child, grandparent or grandchild. In practice, a re-bridge on a home the borrower or a related person lives in, or will live in, is normally regulated. One regulated case is a homeowner who bought a new home before selling the old one and whose sale has been delayed; our guide to regulated bridging loans for homeowners covers the first bridge.
In MCOB a bridging loan is a regulated mortgage contract with a term of 12 months or less (FCA Glossary: bridging loan). A regulated re-bridge is a new contract, so the new lender must assess affordability under MCOB 11.6.2R before lending, unless the interest is rolled up for the whole term: MCOB 11.6.57R takes interest roll-up mortgages out of that test, and MCOB 11.6.58R allows them for bridging loans. A bridge is normally interest only, with the capital repaid at the end, so the lender needs evidence of a clearly understood and credible repayment strategy (MCOB 11.6.41R). Where that strategy is a move to a mainstream mortgage, FCA guidance says the lender should not accept it unless it is reasonably satisfied that a mainstream lender will lend, and suggests an agreement in principle or a guaranteed offer as evidence (MCOB 11.6.54G). Relying on the borrower's credit record improving during the bridge, without a guaranteed longer-term offer, may tend to show a breach of the rule (MCOB 11.6.53E).
A new regulated loan with a fixed term over 12 months falls outside the MCOB definition of a bridging loan, so the provisions written for bridging loans, including the permission to roll up interest in MCOB 11.6.58R, do not apply to it. An extension by the existing lender is assessed for affordability as if it were a new loan, unless the interest is rolled up, in which case the lender must instead discuss with the borrower what the extension does to their remaining equity before they commit (MCOB 11.6.55R). The lender has to keep a record of the borrower's positive choice, the reasons for the extension and the evidence of the repayment strategy and its cost (MCOB 11.6.60R).
If a regulated bridge runs past its end date with a balance outstanding, the lender must deal with the borrower fairly and must not take repossession action unless all other reasonable attempts to resolve the position have failed (MCOB 13.3.8AR, in force since 22 July 2025). Before arranging a second bridge on a home, we check whether a price reduction, a residential mortgage, a sale of part of the property or an extension would leave the borrower in a better position. Mortgage Lane does not give legal or debt advice; a solicitor can advise on the loan agreement, and GOV.UK's guide to options for dealing with your debts points to free debt advice through MoneyHelper.
MCOB treats a regulated bridge as one with a term of 12 months or less, so a regulated re-bridge fixed for longer becomes an ordinary regulated mortgage and loses the bridging permission to roll up interest.
How a re-bridge is arranged
- Early review. Ideally two to three months before the existing term ends: the redemption estimate, the end date, the reason for the delay and the evidence that the exit is coming.
- Options priced. Extension terms requested from the existing lender, re-bridge terms from new lenders, and the sale and term remortgage routes checked, each costed to the same exit date.
- Terms and valuation. The chosen lender issues terms, instructs its valuation and confirms the gross loan, the net advance and the term.
- Legal work and redemption. Solicitors check the title, obtain the final redemption figure and complete before the existing end date where possible, so that default charges do not start.
- The exit. The delayed sale, refinance or development step completed within the new term, with progress reported to the new lender along the way.
If your bridge is close to its end date, get in touch with the redemption statement, the loan agreement and the latest evidence on the exit. The lender makes the final decision on the terms. Developers who expect to bridge one project after another can also look at a revolving credit facility, which lets them draw and repay against one limit.
Loan to value creep: the arithmetic of a re-bridge
Each re-bridge adds its own costs to the debt while the value of the property stays where it was or falls, so the margin between the loan and the lender's limit narrows each time.
Step 1. The existing bridge at its end date
An illustrative property worth £500,000 was bought with a 12-month bridge of £280,000, a 56% loan to value. Interest at an illustrative 0.75% a month was rolled up without compounding: £2,100 a month, £25,200 over the term. The redemption figure at the end date is £305,200, 61.0% of the value, before any exit fee or extension charges, which would be added to it. Where the agreement compounds the rolled-up interest monthly, the figure is £306,266.
Illustrative arithmetic on hypothetical figures, not lender terms. Not an offer of finance.
Step 1 figures
| Item | Figure |
|---|---|
| Property value | £500,000 |
| Bridge at the start (56% loan to value) | £280,000 |
| Interest rolled up, 12 months at 0.75% a month, not compounded | £25,200 |
| Exit fee and charges (none in this example) | £0 |
| Redemption figure at the end date | £305,200 |
| Loan to value at the end date | 61.0% |
Step 2. The new gross loan
The new lender's loan has to cover the redemption figure and its own costs. In this illustration it adds £3,000 of valuation and legal costs to the loan, charges an arrangement fee of 2% of the gross loan and retains interest for an 8-month term at 0.75% a month, which is 6% of the gross loan. Because the fee and the interest are both percentages of the loan they belong to, the gross loan is the redemption figure plus the costs, divided by what is left after those percentages. Here that is £308,200 divided by 0.92 (1 less 0.02 for the fee and 0.06 for the interest), which is £335,000.
Step 2 figures
| Item | Figure |
|---|---|
| Redemption of the existing bridge | £305,200 |
| Valuation and legal costs added to the loan | £3,000 |
| Arrangement fee, 2% of the gross loan | £6,700 |
| Interest retained, 8 months at 0.75% a month on the gross loan | £20,100 |
| New gross loan | £335,000 |
| Loan to value on £500,000 | 67.0% |
The debt rises by £29,800 and the loan to value by 6 percentage points, from 61.0% to 67.0%, without any new money reaching the borrower. Against the £280,000 first advance, the debt is £55,000 higher and the loan to value 11 points higher. With an illustrative 70% maximum, the most the new lender would lend on £500,000 is £350,000, which leaves £15,000 of headroom.
Step 3. When the valuation falls
If the new lender's valuer puts the property at £460,000, the same 70% maximum allows £322,000, which is £13,000 short of the £335,000 needed, and the loan to value would be 72.8%. The borrower can pay part of the debt in cash, shorten the term or sell. Because the fee and the retained interest shrink with the loan, a cash payment of £11,960 is enough: £308,200 less £11,960 is £296,240, and £296,240 divided by 0.92 is exactly £322,000. Shortening the term works only at 3 months or less, which gives a gross loan of £321,880 at 3 months and leaves little time for the exit. The lowest valuation at which the £335,000 loan fits the 70% maximum is £478,572.
Step 4. A second re-bridge
If the exit slips again, the debt at the end of the 8 months is the £335,000 gross loan, because the retained interest has paid for the term. A second re-bridge on the same illustrative terms needs £338,000 (the £335,000 debt plus £3,000 of costs) divided by 0.92, which rounds up to £367,392, a 73.5% loan to value on the unchanged £500,000. That is above the 70% maximum even with no fall in value, so the borrower would need to pay down part of the loan. Over two re-bridges the debt would have grown by £87,392 from the first advance.
Step 4 figures: the debt across two re-bridges
| Stage | Debt | Loan to value on £500,000 |
|---|---|---|
| First bridge at the start | £280,000 | 56.0% |
| First bridge at its end date | £305,200 | 61.0% |
| After the first re-bridge | £335,000 | 67.0% |
| After a second re-bridge on the same terms | £367,392 | 73.5% |
Illustrative figures before any exit fees, extension charges or default interest. Rates, fees, terms and maximum loan to value vary by lender.
What decides the case
Starting the review well before the end date keeps an extension available and avoids default charges. Setting the new term to the time the exit needs, and no longer, keeps the retained interest and the loan to value down.
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Re-bridging calculator
The calculator works out the redemption figure on an existing bridge, the gross loan a re-bridge needs once the new lender's costs, fee and retained interest are added, and the loan to value before and after. The starting figures are the illustration on this page: a £500,000 property, a £280,000 bridge with 12 months of interest rolled up, and an 8-month re-bridge at an illustrative 0.75% a month with a 2% fee and a 70% maximum. Enter the figures from your redemption statement and the new lender's terms, and move the term to see how it changes the loan.
Frequently asked questions about re-bridging loans
What is re-bridging?
Re-bridging is refinancing an existing bridging loan with a new bridging loan on the same property, usually from a different lender, to give the borrower more time to complete the original exit, such as a sale, a remortgage or the end of a development. The new loan repays the old one in full, including any rolled-up interest, exit fee and extension or default charges, and starts a new term with its own fees and interest. Because those costs are added to the debt, the loan to value rises with each re-bridge. It differs from an extension, which keeps the same loan with the same lender for longer, and from remortgaging, which moves the debt onto a term mortgage.
How does a re-bridge work?
A re-bridge starts with a redemption statement from the existing lender, showing the full amount needed to repay the loan on a given date. A new bridging lender values the property, reviews why the exit was delayed and the evidence that it will now complete, and offers a gross loan large enough to cover the redemption figure plus its own fees, costs and any retained interest. Solicitors check the title and the existing charge. On completion the new lender pays off the old loan, the old charge is removed and the new lender registers its own, and the borrower has the new term to complete the exit.
Can I refinance a bridging loan with another bridging loan?
Yes, refinancing a bridging loan with another bridging loan is called re-bridging, and lenders consider it where the property's value supports the larger debt, the reason the first exit was delayed is explained and there is evidence that the new exit will complete within the new term. The new loan has to cover the full redemption figure on the old one plus its own arrangement fee, valuation, legal costs and interest, so it is larger than the loan it replaces. An extension from the existing lender avoids a second arrangement fee and needs less legal work, though it usually carries an extension fee, so it is worth asking for extension terms before applying elsewhere.
How much does re-bridging cost?
Re-bridging costs whatever the existing loan charges to close, such as an exit fee and any extension or default charges, plus the new loan's arrangement fee, valuation, legal costs for both sides and interest for the new term. These costs are often added to the new loan, so the debt rises. In an illustration with a £305,200 redemption figure, a 2% fee, £3,000 of valuation and legal costs and 8 months of interest retained at 0.75% a month, the new gross loan is £335,000, which is £29,800 more than the debt it repays. The figures are illustrative, and each lender sets its own rate and fees.
Does re-bridging increase the loan-to-value?
Yes, re-bridging increases the loan to value, because the new loan has to repay the old redemption figure, including rolled-up interest and any charges, and add the new lender's fees, costs and retained interest, while the property's value usually stays where it was. A lower valuation from the new lender raises the loan to value further. In an illustration on a £500,000 property, a bridge that started at 56% reaches 61% at its end date and 67% after a re-bridge, with no new money released. A second re-bridge on the same terms would take it to 73.5%.
What is the difference between a bridging extension and re-bridging?
A bridging extension keeps the existing loan with the same lender for a longer term, usually for an extension fee and sometimes at a different rate, while re-bridging replaces the loan with a new bridging loan, typically from another lender, with a full new arrangement fee, a new valuation and legal costs. An extension is usually quicker, and for a short, evidenced delay it is often cheaper. A re-bridge suits a case where the existing lender will not extend, its terms cost more, or more time or money is needed. For a regulated bridge, the FCA's rules require the lender to assess an extension as if it were a new loan or, where the interest rolls up, to discuss its effect on the borrower's remaining equity.
Can you extend a bridge loan?
Yes, a bridging loan can be extended if the lender agrees, though some lenders do not extend at all. Lenders look for an exit that is still credible, such as a delayed sale or a refinance under way, and an extension usually carries a fee and further interest. Asking before the end date matters, because once the term has passed the loan agreement may allow default interest and charges. For a regulated bridging loan on a home, the lender must assess affordability as if the extension were a new loan or, where the interest is rolled up, discuss with the borrower what the extension does to their remaining equity, and the borrower must make a positive choice to extend (FCA Handbook, MCOB 11.6.55R).
What happens if my bridging loan expires?
If a bridging loan reaches its end date without being repaid, the loan agreement may allow the lender to charge default interest and other charges, and the lender can take steps to enforce its security, which can end in the sale of the property. Contacting the lender before the end date to ask for an extension, or arranging a re-bridge or a sale in time, stops those costs building up. For a regulated bridging loan on a home, the FCA's rules require the lender to deal with the borrower fairly and not to take repossession action unless all other reasonable attempts to resolve the position have failed (FCA Handbook, MCOB 13.3.8AR).
Why do people need to re-bridge?
People re-bridge when the planned exit from a bridging loan has not happened by the end of the term. Common reasons are works or sales that have overrun, a remortgage that fell short on valuation, rent or the term lender's minimum ownership period, a sale that fell through, planning, title or lease issues that are taking longer than expected, and an existing lender that will not extend on acceptable terms. A re-bridge works where the delay has a clear cause and an end in sight, and the new lender looks at that reason before anything else.
Can I re-bridge if my remortgage fell through?
You can re-bridge after a failed remortgage if the reason is clear and fixable, such as a term lender's minimum ownership period that has not yet passed, a tenancy not yet in place or a value that has not yet been evidenced. The new bridging lender wants to see the term lender's decision and a reason to believe the next application will succeed within the new term, such as an agreement in principle. Where the bridge is regulated, FCA guidance says a lender should not accept a planned move to a mainstream mortgage unless it is reasonably satisfied that a mainstream lender will lend.
Can I re-bridge while waiting for planning permission?
A re-bridge can give time while a planning decision is made, where the exit depends on the permission. The new lender looks for evidence of progress, such as a validated application and a decision date, and may value the property both with and without the permission in case it is refused. In England a council has 8 weeks to decide most applications and 13 weeks for major development (gov.uk: determining a planning application), and Scotland, Wales and Northern Ireland set their own periods. The new term needs to cover the decision and the steps after it, such as the sale or the development finance.
Can I re-bridge if my sale fell through?
A re-bridge can buy time to resell a property after a sale falls through, where the property will sell at a price the evidence supports. The new lender reviews the marketing history, the offers received and the agent's advice on price and timescale before lending, and some lenders use a value that assumes a restricted marketing period. A lower asking price can make the resale quicker but has to leave enough to repay the larger debt. Where the property is a home the borrower bought before selling their old one, the re-bridge is normally a regulated loan.
Can I re-bridge a bridging loan that is already in default?
Some lenders will re-bridge a bridging loan that has passed its end date or is in default, though fewer than for a loan in good standing. The redemption figure will include any default interest and charges, so the new loan is larger, and the new lender will want to know why the loan was not repaid or extended in time and how the new exit will complete. Acting before the end date keeps more lenders available and stops default costs building up. For a regulated loan, the lender holding it must deal with the borrower fairly and treat repossession as a last resort.
Will a lender re-bridge my loan?
A lender will consider a re-bridge where its own valuation supports the larger loan within its maximum loan to value, the reason for the delay is explained and resolving, the new exit is nearer and better evidenced than the first, and the borrower handled the existing loan as agreed. Each lender sets its own limits, so a case one lender declines may suit another. A second re-bridge on the same property is harder to place, because the debt has grown twice while the value usually has not.
How long can a re-bridge last?
The term of a re-bridge is set by the lender to fit the exit, and it can be shorter than the original bridge, because a longer term means more interest added to the loan and a higher loan to value. Lenders prefer a term long enough to complete the exit with some margin, and a term longer than the exit needs only adds cost. For a regulated re-bridge on a home, a fixed term over 12 months takes the loan outside the FCA's definition of a bridging loan, so it is treated as an ordinary regulated mortgage and the bridging provisions, including the permission to roll up interest, no longer apply to it.
Can a re-bridge release extra money?
A re-bridge can release extra money where the property's value has risen enough to support a larger loan within the new lender's maximum loan to value, for example to finish works or pay for a planning application. The extra funds add to the debt and to the interest charged on it, so the lender will want an exit that repays the larger amount, such as a higher sale price backed by evidence or a larger term mortgage. Where the value has not risen, the new loan only repays the old one and its own costs.
Is re-bridging regulated?
Re-bridging on investment or development property, or to a limited company, is usually outside regulation. A re-bridge is a regulated mortgage contract where an individual borrows against a property of which at least 40% is used, or intended to be used, as a dwelling, unless an exclusion applies (Regulated Activities Order, article 61). One exclusion is an investment property loan, where less than 40% is used as a dwelling by the borrower or a related person and the loan is wholly or mainly for business purposes (article 61A). A regulated re-bridge is covered by the FCA's MCOB rules on responsible lending, repayment strategy and charges.
Is re-bridging a bad sign?
A single re-bridge to a well-evidenced exit need not be a bad sign, because planning, building works and sales can take longer than planned. Lenders and borrowers read repeated re-bridging on the same property without progress towards the exit as a warning sign, because each refinance adds fees and interest to the debt while the property's value stays much the same. The test is whether the reason for the delay is clear and the exit is now nearer than it was.
When should I start arranging a re-bridge?
Start arranging a re-bridge two to three months before the existing bridging loan's end date, so there is time to ask for extension terms, obtain terms from new lenders, complete the valuation and legal work and refinance before any default interest or charges apply. A late start narrows the choice of lenders and can leave the borrower paying default charges while the new loan is arranged. The redemption statement, the loan agreement and the evidence on the exit are the documents to gather first.
Is unused retained interest refunded when I re-bridge?
Some bridging lenders refund or credit retained interest that has not been used when a loan is repaid early, and others do not, depending on the loan agreement. Some agreements also set a minimum interest period, so a loan repaid early can still pay interest for that period. The existing lender's redemption statement shows the position, and it changes the amount the re-bridge has to cover. For a regulated loan, the FCA requires any early repayment charge to be a cash amount and a reasonable pre-estimate of the lender's costs (FCA Handbook, MCOB 12.3.1R).
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