Auction Finance
At auction the contract is exchanged the moment the hammer falls. You pay around 10% on the day and have 28 days to complete the balance. Auction finance is built to hit that deadline where a mortgage will not.
What is auction finance?
Auction finance is a form of bridging loan structured specifically to fund the completion balance on a property bought at auction. When the hammer falls the contract is exchanged immediately. You pay a deposit, typically around 10% of the hammer price, on the day, and you have a fixed completion window, typically 28 days from exchange, to pay the balance. Miss the deadline and you forfeit the deposit and may be pursued for any loss the vendor suffers on a resale.
A mainstream mortgage almost never moves fast enough to meet a 28-day deadline. Auction finance does. We arrange the bridge against the property you have bought, sized so the net loan covers the balance owed at completion. Because the faster bridging cases complete inside two to three weeks, the key is front-loading the work: getting a Decision in Principle and instructing the valuer and solicitors before the auction day, or immediately after the hammer falls.
Auction stock frequently includes properties that a mortgage lender will not fund: uninhabitable, short-lease, non-standard construction or commercial. Auction finance does not require the property to be immediately habitable or mortgageable, which is why it is the standard tool for the lots most likely to offer a below-market entry price.
- Residential and commercial auction lots with a 28-day completion deadline
- Properties that need work before a mortgage is available
- Repossessions and probate sales with a fixed completion date
- Below-market lots where speed of completion secured the price
- Multiple lots bought in a single auction cycle
- Pre-approval available before auction day to remove completion risk
Indicative terms
- Deposit on the daytypically around 10% of the hammer price
- Completion windowtypically 28 days from exchange
- Indicative monthly ratefrom around 0.88% per month (Bridging Trends, 2025 average)
- Typical LTVaround 60% on average against value or purchase price (indicative)
- Interestusually retained or rolled up; no monthly payments
- Typical termup to 12 months while you refurbish, sell or refinance
Indicative only. Terms vary by lender, scheme and borrower and are not an offer of finance.
Who it suits
- Investors and developers buying residential or commercial lots at property auction
- Landlords buying below-market stock that needs light refurbishment before refinancing to buy-to-let
- Anyone who has won a lot at auction and needs to complete inside 28 days
- Buyers of non-standard, uninhabitable or unmortgageable properties at auction
- Experienced bidders who want a pre-approved facility in place before auction day to bid with confidence
Discuss auction finance
A view on fundability within one working day.
How auction finance works
Arrange pre-approval before you bid
Ideally we secure a Decision in Principle and instruct the valuation before auction day. The valuer inspects the lot in advance, giving the lender a valuation report ready to rely on the moment you win. This removes the valuation from the 28-day critical path and gives you the confidence to bid at your limit, knowing the finance is in place.
Hammer falls, deposit paid
You pay around 10% of the hammer price on the day and exchange contracts. We alert the lender immediately with the hammer price and the completion date. If pre-approval is in place we move to instructing solicitors the same day. If not, we seek a Decision in Principle immediately after the auction.
Valuation (if not pre-done) and legal
The lender's valuer visits as fast as possible and produces a valuation report. Both you and the lender instruct solicitors simultaneously. The legal work on an auction purchase is typically shorter than a standard transaction because the auction legal pack, which includes the title, searches and special conditions, has already been prepared by the vendor's solicitors and should have been reviewed before bidding.
Completion inside 28 days
Once the valuation is in and the legal work is done, the lender issues a mortgage offer, the solicitors complete and the balance is paid. The net loan, after retained interest and fees are deducted from the gross facility, settles the completion balance. Front-loading the valuation and the legal work is what makes 28 days achievable rather than stressful.
Refurbish, sell or refinance
After completion you execute your plan. If the property needs work you carry out the refurbishment within the term. At the end you either sell, repaying the bridge from the proceeds, or refinance onto a buy-to-let or term mortgage. We set the term long enough that the works and the exit can complete without pressure.
Who can get auction finance?
Auction finance is available to individuals, limited companies, SPVs and experienced borrowers on residential and commercial auction lots. There is no income test on unregulated cases. Lenders assess the quality of the security and the credibility of the exit strategy. Adverse credit does not automatically disqualify a case, though it affects pricing and lender selection. First-time buyers at auction can access finance, usually at a slightly lower LTV. The property does not need to be habitable or immediately mortgageable. If there is existing debt on a property being cross-charged to provide additional security, the first lender's consent is needed.
How much can you borrow for an auction purchase?
Auction finance typically advances up to around 60% loan-to-value against the lower of hammer price and open market valuation (Bridging Trends, 2025 average). Where the hammer price is materially below market value, some lenders will work to the market value rather than the price paid. The balance above the loan is your contribution: the 10% paid on the day plus any shortfall between the net loan and the hammer price, plus fees. We model the gross-to-net before the auction so you know exactly what you need to bring.
What does auction finance cost?
The monthly interest rate on the 2025 market average is around 0.88%, though auction finance on a clean residential lot with a confirmed exit can be placed at competitive indicative terms. Beyond interest, the costs are an arrangement fee, the RICS valuation (instructed as early as possible), legal fees and any monitoring costs if a refurbishment is included. Interest is usually retained out of the gross facility so there is no monthly cash drain. The total cost is lower the faster the exit lands, which is another reason to plan the exit before bidding.
Auction finance versus a standard mortgage for an auction property
A standard mortgage takes weeks to months to process, requires the property to be habitable and mortgageable, and is not designed for a 28-day exchange-to-completion. Auction finance is built specifically for that timetable. It is more expensive per year than a mortgage rate, but the cost is borne over weeks or months rather than years, and it funds lots that a mortgage simply will not. After the auction purchase, once any works are done, refinancing onto a buy-to-let or residential mortgage at a lower long-term rate is the typical next step.
Auction Finance: common questions
How does auction finance work?
You pay around 10% on the hammer and exchange contracts immediately. Auction finance bridges the remaining balance so you can complete inside the 28-day window. The bridge is secured against the lot, interest is usually retained, and the loan is repaid when you sell or refinance the property after the auction.
What is the 10 minute rule at auction?
This is not a universal standard but some auction houses allow properties that have not sold by the end of the auction to be purchased in the room at the reserve price for a short window afterward. The same 28-day completion terms usually apply, so auction finance is still the tool to use.
Can I borrow money for an auction property?
Yes. Auction finance is specifically designed for this. It does not require the property to be habitable or mortgageable, making it suitable for the full range of auction stock, including uninhabitable, short-lease, non-standard and commercial lots.
Who typically uses auction finance?
Investors and developers buying below-market or non-standard stock, landlords buying refurbishment projects, and anyone who needs to meet a fixed 28-day completion deadline that a mortgage cannot. It is also used by buyers who need certainty of funding to bid confidently without making the completion conditional.
Can the finance really complete in 28 days?
Yes, when the groundwork is done early. The market average across all bridging is around 55 days, but auction desks routinely complete inside two to three weeks when the valuation is instructed in advance and the legal pack has been reviewed before the auction. Pre-approval is the surest way to guarantee the 28-day window is met.
What is my exit from auction finance?
Either sale of the property after any works, repaying the bridge from the sale proceeds, or refinance onto a buy-to-let or residential mortgage. We agree and evidence the exit before the auction so the lender can underwrite it alongside the purchase.
What does auction finance cost?
An arrangement fee, RICS valuation, legal costs and interest at an indicative rate from around 0.88% per month on the 2025 average, usually retained so there is no monthly payment. We model the gross-to-net before the auction so you know what you need to bring and what you will net.
Discuss auction finance
Send us your scheme and we will come back with a view on fundability and likely terms within one working day.