Refurbishment Finance
Refurbishment finance is a bridging loan built around a property improvement project. It funds the purchase and the works on a single short-term facility, covering everything from a light cosmetic refresh to a structural heavy refurbishment, then exits on a sale or a buy-to-let remortgage.
What is refurbishment finance?
Refurbishment finance is a type of bridging loan structured to fund a property purchase and the cost of improving it, whether for immediate resale (a flip) or to reach a standard that allows refinancing onto a buy-to-let or residential mortgage. The loan covers the acquisition and the works within a single facility, with interest usually retained or rolled up so there are no monthly payments during the refurbishment.
We distinguish between light refurbishment and heavy refurbishment because they are funded differently and carry different risk. Light refurbishment is cosmetic and non-structural: kitchens, bathrooms, decoration, rewiring, new windows. No planning permission is required. The loan is usually advanced in full on day one against the current value, up to an indicative ceiling of around 75% LTV on the right case (market, 2025). Heavy refurbishment involves structural change, extensions, reconfiguration or anything that requires planning consent or building regulations approval. The lender advances a purchase tranche on day one and releases the build cost in staged drawdowns against the works programme, verified by a monitoring surveyor.
Refurbishment finance is also the product behind a refurbishment buy-to-let strategy, where the borrower purchases a tired property below market value, improves it, and then refinances onto a buy-to-let mortgage at the higher post-works value, releasing most or all of the original equity.
Refurbishment finance is unregulated lending for investors and developers on investment property. We arrange it directly.
- Light refurbishment: cosmetic, non-structural works; no planning needed; higher day-one LTV
- Heavy refurbishment: structural work, extensions or reconfiguration; usually staged drawdowns
- Refurbishment to sell (flip): purchase plus works, exit on sale at post-works value
- Refurbishment to let: purchase plus works, exit on buy-to-let remortgage
- HMO creation or conversion: adding rooms or changing use with the appropriate licensing in place
- Indicative day-one LTV up to around 75% on light refurbishment (market, 2025)
Indicative terms
- Day-one LTV (light refurb)up to around 75% of current value (indicative; market, 2025)
- Heavy refurbpurchase tranche plus staged drawdowns against cost
- Indicative monthly ratefrom around 0.88% per month (Bridging Trends, 2025 average)
- Typical term6 to 12 months to cover works and exit
- Interestusually retained or rolled up; no monthly payments
- Exitsale at post-works value, or buy-to-let remortgage
Indicative only. Terms vary by lender, scheme and borrower and are not an offer of finance.
Who it suits
- Property investors buying tired stock below market value to renovate and sell
- Landlords buying properties that need work before a buy-to-let mortgage is available
- Developers carrying out heavy refurbishments, extensions or reconfiguration with planning consent
- Investors pursuing a refurbishment buy-to-let strategy, buying below value and refinancing post-works
- Anyone who has bought at auction and needs to fund the works before selling or letting
- Buyers of non-standard or unmortgageable properties who need to bring them up to mortgage standard
Discuss refurbishment finance
A view on fundability within one working day.
How refurbishment finance works
Scope of works and initial structure
We review the scope of works and classify the project as light or heavy refurbishment. For a light refurb we advance against the current value on day one. For a heavy refurb we need a cost plan from a surveyor or architect and, on larger schemes, a QS-verified build cost schedule. The structure sets the day-one purchase tranche, the total facility including the works element, and the drawdown mechanism.
Lender introduction and Decision in Principle
We introduce the case to refurbishment lenders appropriate for the scope. Lenders such as Together, Shawbrook, LendInvest, MT Finance and United Trust Bank all have active refurbishment desks, though each has its own appetite for heavy versus light, LTV and works type. A Decision in Principle sets the terms before the valuation cost is committed.
RICS valuation and legal
The lender instructs a RICS valuation on the current value of the property and, on heavy cases, a projected Gross Development Value on the assumption the works are completed. Simultaneously both parties instruct solicitors. On heavy refurbishments the monitoring surveyor also reviews the cost plan before drawdown.
Day-one draw and works drawdowns
The opening tranche funds the purchase. For light refurbishment the full works element may be available from day one; for heavy refurbishment the works budget is released in stages as each phase completes, with the monitoring surveyor verifying progress before each drawdown. Interest runs on the drawn balance only.
Exit: sale or buy-to-let refinance
On a sale the property is marketed once the works are complete and the bridge is repaid from the proceeds. On a buy-to-let exit, the property is valued post-works, let at a market rent and a buy-to-let mortgage is placed against the higher value. The buy-to-let mortgage redeems the bridge and, if the strategy has worked, releases the original equity back out.
Who can get refurbishment finance?
Refurbishment finance is available to individuals, limited companies and SPVs investing in or developing property. There is no minimum income test on unregulated cases. Lenders assess the security, the scope of works and the exit. Adverse credit does not automatically disqualify a case. For light refurbishment, experience is helpful but not required. For heavy refurbishment and structural projects, lenders want to see a qualified contractor, a realistic cost plan and ideally some track record in similar projects. The property does not need to be habitable on day one, which is one of the key advantages of refurbishment finance over a buy-to-let mortgage.
How much can you borrow for a refurbishment?
On light refurbishment the day-one LTV can reach an indicative ceiling around 75% of the current market value (market, 2025). Some lenders will additionally advance a portion of the light works cost on day one where it is self-contained. On heavy refurbishment the day-one purchase tranche sits at a lower LTV, typically around 60% to 65% of the current value, and the works budget is released in stages. On a refurbishment buy-to-let exit some lenders will look at the loan-to-value against the projected post-works value as well as the current value, which can increase the total facility available. We model both the gross-to-net and the post-works exit to make sure the strategy stacks before we approach a lender.
What does refurbishment finance cost?
Interest runs at an indicative rate from around 0.88% per month on the 2025 average. On light refurbishment cases with strong security and a clear exit the rate can be competitive; on heavier, more complex schemes the rate reflects the additional risk. Interest is normally retained or rolled up, so no monthly payments are made during the works. Additional costs include an arrangement fee, a RICS valuation, legal fees and, on heavy refurbishments, monitoring surveyor fees per drawdown visit. We provide a full cost schedule including the gross-to-net calculation so you know what reaches you on day one and what the total cost looks like across the expected term.
Refurbishment finance compared to a buy-to-let mortgage
A buy-to-let mortgage requires the property to be habitable, tenantable and in a standard condition the lender is comfortable with. A property that needs a new kitchen, bathroom, rewire or structural repair will not pass a mortgage survey. Refurbishment finance funds the property as it stands and then funds the works that make it mortgageable. Once the works are done and the property is let, the buy-to-let mortgage replaces the bridge at a lower long-term rate. The bridge is more expensive per year, but it is the tool that makes the buy-to-let mortgage possible in the first place.
Refurbishment Finance: common questions
What is refurb finance?
Refurbishment finance is a bridging loan that funds the purchase and improvement of a property in a single short-term facility. Interest is normally retained or rolled up so there are no monthly payments during the works. The loan is repaid on sale or by refinancing onto a buy-to-let or residential mortgage after the refurbishment.
What is the best way to finance a renovation?
For an investment property, refurbishment bridging finance is usually the most flexible and fastest route. It does not require the property to be habitable on day one, covers the purchase and works in one facility, and exits cleanly on a sale or remortgage. Personal loans and credit cards are unsuitable for the scale of most refurbishment projects.
Can I get a loan to refurbish my house?
If the property is your own home, it falls under regulated mortgage rules and we refer that case to an FCA-authorised firm. If it is an investment property, we can arrange refurbishment finance directly. The distinction matters because the rules, the process and the products are different.
What is the 40% loan scheme?
The 40% scheme is a government Help to Buy equity loan scheme for new-build homes in London, not a refurbishment product. It is unrelated to private refurbishment finance. If you are looking to fund the renovation of an existing property rather than buy a new build, refurbishment bridging finance is the relevant product.
What is the difference between light and heavy refurbishment?
Light refurbishment is cosmetic and non-structural: kitchens, bathrooms, decoration, rewiring, windows. No planning consent is required. Heavy refurbishment involves structural change, extensions or reconfiguration and usually requires planning or building regulations approval, a qualified contractor and staged drawdowns with monitoring.
What is refurbishment buy-to-let?
A strategy where you buy a property below market value using refurbishment finance, improve it, then refinance onto a buy-to-let mortgage at the higher post-works value. If the strategy works you recover most or all of your original equity from the remortgage and own the property as a rental with little or no money left in.
What is the maximum LTV for refurbishment finance?
Typically around 75% of the current value on light refurbishment cases (market, 2025). Heavy refurbishment is usually funded at a lower day-one LTV against the current value, rising as the works are completed and the value increases. The 75% figure is indicative, not a guarantee.
Discuss refurbishment finance
Send us your scheme and we will come back with a view on fundability and likely terms within one working day.