A refurbishment bridging loan funds property improvement works where the scope, timeline, or current condition of the property makes a conventional mortgage either unavailable or impractical. Bridging lenders divide refurbishment into two categories, light and heavy, and those categories determine the LTV limit, the rate, and which lenders you can reach. Our light and heavy refurbishment bridging loans cover both, and the refurbishment finance guide walks through a full buy, refurbish and exit plan.

This article explains what each category covers, how they are priced, what lenders need to see before they proceed, and how staged release (draws) works on larger projects.

Light Refurbishment vs Heavy Refurbishment: Where the Line Is Drawn

In bridging finance, the light/heavy distinction turns on structural change, planning permission and change of use, rather than on cost or effort.

Case study: a Northern Quarter mill refurbishment.

Light refurbishment

Internal works that do not require planning permission or building regulations sign-off
Typical scope: kitchen and bathroom replacements, redecoration, flooring, damp treatment, minor electrics and plumbing
The property is habitable (or marginally uninhabitable) throughout
Exit: sale at improved value, or refinance onto a buy-to-let or commercial mortgage
Lender appetite: most mainstream bridging lenders; competitive pricing

Heavy refurbishment

Works that require planning permission, building regulations approval, or involve structural changes
Typical scope: extensions, loft conversions with dormer or hip-to-gable, change of use (commercial to residential, HMO conversion), basement excavation, structural wall removal, complete roof replacement
The property is typically uninhabitable during works
Exit: sale at GDV (common), or refinance once works are certified and the property is mortgageable
Lender appetite: a narrower pool of specialist lenders; higher rate premium; staged draws common

The practical rule: if you are adding square footage, changing the roof structure, converting a floor plate, or moving structural walls, you are in heavy refurbishment regardless of what the builder quotes. Lenders confirm this with their valuer, not from the borrower’s description of the works.

Refurbishment Bridging Rates: What to Expect in 2026

Refurbishment bridging is priced at a premium over standard residential bridging because the exit depends on works completing: the security is not in standard condition, and the lender carries additional risk while works are in progress. Valuation is also more involved: most lenders instruct both an as-is value and a GDV (gross development value) report.

Type	LTV (as-is)	Indicative rate range
Light refurbishment	up to 70–75%	0.60–0.80% a month
Heavy refurbishment	up to 65–70%	0.75–1.00% a month

LTV for refurbishment bridging is typically calculated on the as-is value (the property in its current state), not the GDV. Some lenders, particularly on larger heavy-refurb cases, will lend against a blended as-is/GDV figure once the valuation is in hand. This is case-specific and requires a formal GDV report instructed by the lender.

At 70%+ LTV on heavy refurb cases, the choice of lenders narrows significantly. Above 75% as-is LTV on any refurb case, specialist lenders only.

For live rates including refurbishment products: rates page.

What Lenders Need for a Refurbishment Bridge

For light refurbishment

A clear schedule of works confirming the scope. It need not be a building regs application, just enough detail for the lender’s valuer to confirm the works are cosmetic
A realistic timeline: light refurb works should complete within 3–6 months; lenders are cautious about light refurb bridges extending beyond 6 months because scope tends to drift
An exit plan based on the property at its improved value, most commonly a BTL remortgage or a sale; comparables at the improved value help

For heavy refurbishment

Planning permission granted (some lenders will proceed on a conditional basis pending planning; confirm before instructing, as this narrows the choice of lenders significantly)
Building regulations sign-off plan; the lender’s valuer checks against approved drawings
A fixed-price or schedule-of-works contract with a named, insured contractor. Lenders are significantly more comfortable with a contracted and insured main contractor than a borrower managing individual trades
A realistic construction timeline that fits the term: bridging terms are most commonly 12 to 24 months; some lenders go to 36 months
A GDV report from the lender’s RICS surveyor, which is the reference value for the exit arithmetic
A confirmed exit: sale requires comparables at or near GDV; refinance requires an Agreement in Principle from a named receiving lender at a rate the borrower can sustain

For the four tests lenders apply to every exit (including refurb exits): bridging loan exit strategies.

Staged Release (Draws): How It Works and What It Means for Your Project

Some heavy-refurb lenders release the finance in stages rather than as a single advance: an initial draw at loan start, then further tranches released on surveyor sign-off at agreed build milestones (typically “structure complete”, “first fix”, “second fix and ready for occupation”).

Why lenders use draws

Releasing the full loan on day one against an uninhabitable property means the lender’s security is at its weakest at the point of maximum exposure. Draws tie the loan balance to the build progress, so the property value, and with it the lender’s cover, rises in step with the loan.

What it means for the borrower

You cannot draw the next tranche until the surveyor has inspected and signed off the previous stage, which typically takes 5–10 working days per milestone
You need to fund works between tranches from your own resources or a bridging facility that allows interim draws
Contractor payment terms must align with your draw schedule. A contractor on monthly payments while you are on milestone draws creates a cash-flow gap

For speed-critical projects: confirm upfront whether the lender releases as a single advance or in draws. Single-advance lenders exist but carry higher rates (they are accepting the full day-one exposure). A lender’s draw schedule is not always negotiable, so agree it before instructing.

What a Refurbishment Bridge Costs

The calculator will run the full numbers for your case. The worked example below shows how the costs stack up.

Worked example

£500,000 refurbishment bridge, 9-month term, interest rolled up at 0.76% a month, the average published rate for light refurbishment across 16 lenders, as at 25 October 2026.

Cost item	Basis	Amount
Interest (0.76% a month, rolled up, 9 months)	0.76% × £500,000 × 9	£34,200
Arrangement fee (1%; lender fees typically 1–2%)	1% × £500,000	£5,000
Valuation	Estimate	£2,500
Legal costs (both sides)	Estimate	£4,000
Our fee (1%)	Generally 1% of the gross loan, paid on completion	£5,000
Total cost of borrowing		£50,700

On this example the total cost of borrowing is about 10% of the loan over 9 months. Set that against the value the works will add: the finance cost should sit comfortably inside the margin, provided the project stays on timeline. A 3-month overrun at 0.76% a month on £500,000 adds £11,400 in additional interest alone.

For the full cost mechanics (retained vs rolled, arrangement fee vs exit fee): bridging loan costs explained.

Planning Your Refurbishment Finance

Pin down your schedule of works first, as it decides whether you are light or heavy. Then check pricing for both products on the rates page, run the loan size, LTV and term through the calculator, and arrange a call to talk through the project.

Refurbishment Bridging Loans: Light, Heavy and Everything in Between