Refinance a Bridging Loan: Your Three Options Explained

Most refinances happen because the original exit strategy has slipped. A sale that was due to complete before the term ended has not gone through, a chain further along has stalled, or a residential mortgage application is taking longer than expected. Rather than let the bridging loan run past its agreed term, which can trigger default rates and more serious action from the lender, refinancing replaces it with a facility suited to where the deal actually stands now.

Some refinances are planned rather than reactive. A developer who always intended to move a completed scheme onto cheaper long term finance, or a landlord who bridged to secure a property quickly and always meant to remortgage once refurbishment finished, are refinancing on schedule rather than under pressure.

The honest answer is earlier than feels necessary. Most bridging loan refinances take several weeks from application to completion once you include a valuation, underwriting and legal work, so waiting until the final month of the term leaves little room if anything goes wrong. Reviewing your exit strategy two to three months before the term ends, and speaking to us as soon as you suspect it might slip, keeps every option on the table rather than only the fastest, and often most expensive, one.

There are only three genuine routes.

• Rebridging. A new bridging facility replaces the existing one, buying more time when a sale or remortgage has been delayed rather than abandoned. It suits a short, clearly defined delay.
• Remortgage. A standard residential or buy to let mortgage repays the bridge in full. It suits a borrower keeping the property long term, and moves you from short term to mainstream borrowing.
• Development exit finance. For a completed, or nearly completed, development, this refinances the original development loan onto lower cost terms while the units sell or let.

Which one fits depends on whether the property is being kept, sold, or is a finished development, and on how much of the term is genuinely left to work with.

This split applies to every refinance we arrange. A bridging loan secured on a property that you or an immediate family member occupies, or will occupy, is a regulated mortgage contract, and refinancing it must involve a firm directly authorised by the Financial Conduct Authority, who carries out the regulated activity and gives any advice you need. We introduce the case to that firm; we do not advise on it ourselves.

A bridging loan secured on commercial, investment, buy to let or refurbishment property is unregulated commercial lending, and we arrange that refinance directly. Knowing which applies to your case before you start comparing options saves time later.

The process runs broadly the same whichever route suits your case.

• You tell us the current position: the outstanding balance, the term remaining, and why the original exit has changed.
• We identify whether rebridging, a remortgage or development exit finance fits, and, on a regulated case, introduce you to our authorised partner firm.
• A valuation is instructed and the new lender's underwriting begins, alongside legal work to discharge the existing charge and register the new one.
• Funds are drawn down and used to repay the original bridging loan in full, and the new facility, and its own exit strategy, takes over from there.

Sometimes, if your existing lender agrees, but it is usually only a short term fix rather than a genuine solution. An extension keeps the same lender's terms, which may not be competitive, and typically only pushes the deadline back by a matter of months. Refinancing opens the case to a wide lender panel and resets the terms properly, which is usually the stronger option if the underlying exit strategy has changed rather than merely slipped by a few weeks.

Cost depends on the loan amount, the property, the loan to value and how the new lender prices your specific case, so we never quote a rate without seeing the details, and we would never suggest a figure for something like a 200,000 pound loan without knowing the property and the exit behind it. What we can say is that refinancing itself typically involves monthly interest on the new facility, an arrangement fee, a fresh valuation, and legal costs to discharge the old charge and register the new one. We set out every cost in writing before you commit to anything.