If you’re nearing the end of your bridging loan term and things haven’t gone according to plan, you might be wondering about using another bridging loan to pay off your existing one.
The good news is this option – known as re-bridging – is possible. But there’s plenty to think about before deciding if it’s the right move for you.
Let’s look at what you need to know about using a new bridging loan to repay an existing one, including the benefits, potential pitfalls, and what lenders will want to see.
A Quick Look at Bridging Loans
Bridging loans are short-term lending solutions that help you move forward when timing is tight.
They are similar but work differently from standard mortgages – they’re quicker to arrange, very flexible but come with higher interest rates.
Most bridging loans run from 3 to 24 months.
When you take one out, you’ll need a clear plan for repayment – usually either selling a property or switching to a longer-term mortgage. Sometimes these plans don’t work out as expected, which is where re-bridging might come in handy.
Read more:
What’s Re-Bridging All About?
Re-bridging means taking out a fresh bridging loan to pay off your current one.
Think of it like remortgaging your home, but with short-term finance. You’ll go through a new application process, either with your existing lender or more likely a different one.
Here’s how it works: The new loan pays off your existing bridge, giving you a fresh term to complete your project or secure your exit route. You might even be able to borrow extra funds if you need them.
Why Consider a New Bridging Loan?
Projects don’t always go to plan.
We’ve seen many situations where borrowers need more time:
- A property developer hit unexpected building regulations that slowed down their renovation. Their original 12-month term wasn’t quite enough to finish the work and secure a sale.
- Sometimes costs run higher than expected. You might uncover additional work needed during a renovation, or materials might cost more than budgeted.
- Property market changes can affect your plans too. If house prices dip, you might need more time to achieve your target sale price rather than selling at a loss.
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Benefits of Re-Bridging
Taking out a new bridging loan isn’t just about buying time. You might find better interest rates, especially if you’ve added value to your property since the first loan.
Some of our clients have secured improved terms when their projects were near completion.
Additional funding could be available too. If your property’s worth more now, you might borrow extra to finish works or cover unexpected costs.
What to Watch Out For
Re-bridging needs careful thought.
You’ll pay new arrangement fees – typically 2% of the loan amount – plus possible exit fees on your current loan. These costs add up, and you’ll be paying interest for longer.
Some lenders won’t consider applications if you’ve had your current loan less than six months. Others might hesitate if your project’s faced significant delays.
Remember, your property remains at risk until the loan’s repaid. Each extension of borrowing means longer exposure to this risk.
Other Options Worth Considering
Before you commit to re-bridging, talk to your current lender about an extension. It might work out cheaper than setting up a new loan. There’s no guarantee that they will agree, so leave plenty of time for Plan B.
Consider whether:
- Your project’s ready for a term loan
- A quick sale at a slightly lower price might work better
- You could bring in additional security
- Your current lender might restructure your loan
There’s also other ways to raise funds, although bridging is hard to beat for speed.
- Capital raising remortgage
- Second charge loan
- Second charge bridging loan
Making Re-Bridging Work
If re-bridging looks like your best option, start preparing early.
You’ll need:
- Updated information about your current loan
- A recent property valuation
- Clear evidence of project progress
- A solid plan for repayment
Start looking at options about 1-2 months before your current loan ends. Working with a broker will help – they’ll know which lenders to approach and how to present your application effectively.
Real Example: How Re-Bridging Helped
A developer took out a 12-month bridging loan for a commercial-to-residential conversion.
They discovered structural issues that needed extra plans and permissions, pushing their timeline back. With two months left on their loan, they re-bridged successfully:
The new loan cleared their £400,000 existing borrowing, provided £100,000 extra for completion, and gave them 9 more months. They finished the project and sold all units within the new timeframe.
Nest steps
Re-bridging works best as a backup plan rather than something to rely on from the start.
Always build some extra time into your original schedule and keep your lender updated about any delays. Being upfront about challenges often leads to more options when you need them.
Want to understand your options better?
Our experienced brokers can help you find the right solution for your situation. They will look at your current position and help you decide whether re-bridging or another option might work better for you.
Frequently Asked Questions
Most re-bridging deals complete within 1-2 weeks, though some lenders can move faster if you have all documentation ready and the case is straightforward.
Read more: How quickly can you get a bridging loan?
It’s a new loan so you’ll typically pay arrangement fees (2% of loan amount), valuation fees (£500-£2,000), legal fees, and possibly exit fees on your current loan.
Related: Are bridging loans expensive?
Yes, if your property value supports it and you can demonstrate why the extra funds are needed.
Read more: What can a bridging loan be used for?
Yes, and it’s often worth comparing different lenders’ terms and rates.
While not mandatory, a broker can access more lenders and often secure better terms.
Rates depend on current market conditions and your circumstances – they might be higher or lower than your existing loan.
