Loan to value limits
Lenders set a maximum loan to value for each type of property and charge. As a rough guide:
- Standard residential, first charge: commonly up to 70% to 75%
- Commercial and semi-commercial: often lower, around 60% to 70%
- Land without planning: often around 50% to 60%
- Second charge: lower combined limits across both charges
These are typical market ranges, not offers. Our guide to LTV and LTGDV covers the detail.
Gross loan and net advance
The maximum usually applies to the gross loan, which includes retained interest and any fees added to the loan. On a £500,000 property at 75%, the gross loan is £375,000. If £27,000 of interest is retained and a £7,500 fee is added, you receive about £340,500, or 68% of value.
On a purchase, lenders use the lower of the price and the valuation. If the valuation comes in low, the loan falls with it. Lenders that allow interest to be serviced, or measure loan to value on the net advance, can leave you with more cash.
Borrowing more with additional security
If you own other property with equity, a lender may take a charge over it too. The loan is then measured against the combined value, which can allow you to borrow 100% of a purchase price, and sometimes costs, without new cash. This is common in chain breaks and auction purchases.
Every charged property is at risk if the loan is not repaid, and both titles need legal work, so costs and timing increase slightly.
Works funding and value after works
On refurbishment projects, some lenders add a works facility on top of the day-one advance, released in stages. A few size the whole facility against the value after the works, so the total can be larger than a standard bridge. The day-one advance is still limited by today's value. See light vs heavy refurbishment.
Minimum and maximum loan sizes
Most lenders have a minimum loan, often somewhere between £25,000 and £100,000, and maximums from a few million pounds to well above £10 million for the largest lenders. Very large loans attract more scrutiny and bespoke terms; see large bridging loans.
Your credit, experience and the exit can also limit the amount, even if the property would support more. To see indicative maximums from lenders on our panel, use Instant Quotes or the calculators.
A worked example
Take an illustrative purchase at £400,000, with the valuation agreeing the price, and a lender offering 75% on the gross loan with 12 months' interest retained at 0.8% a month and a 2% arrangement fee added.
- Maximum gross loan: £300,000
- Retained interest: £300,000 × 0.8% × 12 = £28,800
- Arrangement fee: £6,000
- Net advance: about £265,200, or around 66% of the price
If the same lender allowed interest to be serviced, the net advance would be about £294,000, but you would pay around £2,400 a month. If the valuation came in at £380,000, every figure would fall by about 5%. These numbers are illustrative only, but they show why the net advance, not the headline loan to value, decides how much of your own money you need.
Common questions
Can I get a 100% bridging loan?
Not against one property, but with additional security over other property you own, lenders can sometimes fund the full purchase price.
What is the maximum LTV on a bridging loan?
Commonly up to about 70% to 75% on first charge residential property, with lower limits for land, commercial property and second charges.
Does the LTV include interest and fees?
For most lenders, yes. The maximum applies to the gross loan, so the cash you receive is lower.
This guide is for general information only and should not be treated as legal, tax or financial advice. Lender requirements depend on the property and your circumstances.
