Bridging loans are designed to be short-term, but what happens when you need more time?
Whether your property sale is taking longer than expected, your renovation project has hit delays, or market conditions have shifted, extending your bridging loan might be necessary.
This guide explains your options, outlines the costs, and helps you decide whether an extension is right for your situation.
Bridging Loan Extensions
The short answer is yes – bridging loans can be extended but it’s not guaranteed.
Each request is assessed individually and you’ll need good reasons for more time.
Most lenders will consider extensions of 1-6 months as long as you’ve kept up payments and your exit strategy is still viable. It’s like extending a fixed term contract – possible with the right circumstances and agreement from both parties.
Related reading: How Long Can You Have a Bridging Loan For?
Why Do You Need to Extend?
When you set out your initial exit strategy you should build in contingencies for unforeseen delays. But it’s not possible to account for every situation.
When approaching a lender you’ll need to put forward a convincing case for needing an extension, and a revised exit strategy.
Property sales take longer than expected.
Your buyer’s mortgage application might be delayed or the local market might be slow. In the current UK market the average property sale takes 4-6 months so timing is a guess.
Planning permission takes longer than expected.
UK local authorities aim to process applications within 8-13 weeks but complex projects need additional consultation periods or amendments.
Construction and renovation projects hit unexpected problems.
Supply chain issues, contractor availability or structural issues might delay completion dates. Weather can also impact outdoor work.
Market conditions might affect your exit strategy.
You might need to wait for better selling conditions or for your property to value match your financial plans.
How to Request a Bridging Loan Extension
Early communication is key when asking for an extension.
Contact your lender as soon as you see delays – and preferably at least a month before your loan is due to end.
Your lender will want to know why you need more time and see evidence your project is still on track. This might be updates on your property sale, planning application or construction timeline. Supporting documentation helps your case.
We would recommend that your broker assists with this, as they can speak directly to the loan underwriters and explain what’s happened.
Get access to expert brokers and specialist bridging lenders
Additional Costs
Extension costs can add up fast.
You will need to pay an extension fee of 1-2% of the loan amount. Many lenders will require a new property valuation and possibly additional legal work.
Invariably the interest charged on the extra time will be higher than the initial term.
Other Options to Consider
There are a few different ways of approaching this problem and your options may well be affected by how much time is available.
Development exit finance
If the original purpose of the loan was for property development then development exit finance is an option for projects near to completion. These loans can have lower interest rates and longer terms than some bridging loans.
Refinance to a new lender
If you have enough time, a new re-bridging loan with a different lender might be better than extending your current one. This means new arrangement fees and legal costs but you will probably get better interest rates.
Second charges
Second charge lending can give you extra funds if that’s your main issue. This option allows you to keep your existing bridging loan and get extra finance. You can borrow against the same property, or another one depending on the levels of equity.
Don’t do this
Don’t ignore the problem and either leave dealing with it until the last moment, or rely on the lender giving you more time.
There is always a chance that a lender will refuse a request to extend, if this happens you need to allow time to seek out a replacement.
The interest rates charged for the extension period are normally more expensive. A loan that simply runs beyond it’s set end date will be charged punitive default interest charges.
How to Avoid Extending
Good planning reduces extension risk.
Double your estimated timeline when planning your exit strategy – if you think it will take 3 months to sell, plan for 6. This buffer gives you room for unexpected delays.
Keep your lender informed and they’ll trust you more. They’ll be more likely to support you if issues arise when you’ve been communicating throughout.
Good project management helps you identify delays early. Address small issues before they become big problems that affect your loan term.
Help With Your Bridging Loan
Professional advice saves you money and stress in the long run. A specialist broker knows which lenders are more flexible and can help you prepare your case for an extension.
They’ll also suggest alternatives if extending isn’t the best option.
Whether you need advice on extending your current bridging loan or new finance we can help. Our team work with many specialist lenders to find a solution for you.
Get in touch today to talk about your bridging loan needs. We’ll help you understand your options and find the way forward, whether that’s an extension or an alternative.
Remember, extensions are a useful safety net but shouldn’t be part of your original plan. Proper planning, lender communication and expert advice will ensure your bridging finance delivers what you need.
Frequently Asked Questions
Your interest rate might increase when extending your bridging loan. Lenders often review rates during extension requests, and any changes in your circumstances or the market could result in adjusted terms.
If your extension request is refused, your main options are: refinance with a different bridging lender, raise the cash using another method or property. This could be another bridge or a second charge bridge.
While not required, a broker can help to negotiate better extension terms and suggest alternatives you might not know about. They understand which lenders offer the most flexible extension policies and can help prepare a strong application.
Lenders do allow early repayment during extensions, often without extra penalties. Check your extension agreement for any early repayment charges. Some lenders might reduce extension fees if you repay earlier than the agreed extended term.
Your exit strategy needs updating when extending. You’ll need to show why the original timeline failed and provide evidence that the one is achievable. Lenders want detailed plans, whether it’s a property sale, refinance, or other repayment method.
An extension keeps your existing loan and lender with modified terms, while refinancing means taking a new loan (with a different lender) to repay the current one. Refinancing will involve further setup costs but might offer better interest rates.
