A commercial mortgage is usually cheaper over the long run when the property is already let or trading and you can wait for full underwriting. A bridging loan is faster and will lend on property a mortgage lender won't touch yet. Many investors bridge first, then refinance onto a commercial mortgage once the property qualifies.
8 min read · Updated October 2026 · Reviewed by Ashley Thomas, Director
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They solve different problems. A bridge buys time and speed against the property's value, while a commercial mortgage gives long-term funding against the income the property or business produces.
A bridge makes sense when the deadline or the state of the property rules out a mortgage for now. You're paying for speed and flexibility, so it works best when there's a clear plan to repay within the term.
Auction purchases usually need to complete within a set period after the hammer falls, and that's often too short for a commercial mortgage lender to underwrite in time. A bridge can fit that window, and with title insurance completion can be within about a week, or around 3–4 weeks with full searches (typical, not promised). See auction finance for how that works in practice.
Most commercial mortgage lenders want a property they can value on its income, so an empty shop, an office with no tenant or a building without a working kitchen or bathroom often won't qualify. A bridging lender can lend on the property as it stands and some will fund the works too. For bigger projects, see light vs heavy refurbishment and bridging vs development finance.
A commercial mortgage fits when the property already produces income, or houses a trading business with accounts to show for it, and you can wait for full underwriting.
For a let property, the lender's main test is the interest cover ratio (ICR). It compares the annual rent with the annual interest, calculated at a stress rate set by the lender rather than the rate you'll actually pay. A common requirement is rent of at least 125% of the stressed interest. So if the stressed interest came to £40,000 a year, the lender would want to see rent of at least £50,000 (illustration only). Where the rent falls short, the loan usually shrinks until the numbers work.
If your own business trades from the property, the lender looks at the business accounts rather than a rent roll. The usual measure is the debt service coverage ratio (DSCR), which compares the business's profits available to pay debt with the loan repayments, often requiring cover of at least 100% at a stressed rate. Expect to provide two or three years of accounts. Some owners hold the building in a separate property company that leases it to the trading company (often called opco/propco). Lenders then look at both companies and the lease between them. That structure has tax and legal consequences, so speak to your accountant before setting it up.
Both lenders care about the property, but they value it differently, and that difference is where most refinance problems start.
Valuation type. A bridging lender may accept an automated valuation (AVM) or desktop valuation on a straightforward case, while a commercial mortgage lender almost always instructs a full RICS valuation with an inspection.
Vacant possession vs investment value. A building can be valued on what it would sell for empty (vacant possession value) or on what an investor would pay for its income (investment value). For a let commercial property the investment value depends heavily on the rent, the tenant and the lease, so two valuations of the same building can differ a lot.
Lease length. Lenders usually want the remaining lease to run well into the mortgage term, and short or break-heavy leases can reduce the loan or rule the property out.
Accounts. Owner-occupiers need trading accounts, while investors are judged on their experience, assets and the tenant's covenant strength.
Per month, usually yes, but the fair comparison is over the same period, fees included. Comparing 20 years of mortgage interest with a 9-month bridge is misleading, since the bridge total only looks small because it's short. Imagine borrowing £500,000 for nine months on a property that a mortgage lender would accept (illustration only):
If you plan to hold for years, the mortgage will normally win once the set-up costs are spread out. If you'll sell or refinance within the year, or the mortgage can't be arranged in time, the bridge can be the cheaper outcome because it gets the deal done. See bridging loan costs.
Yes, and investors often do. The bridge buys and improves the property, and once it's let or trading, a commercial mortgage repays the bridge.
Some lenders offer both stages under one roof, sometimes called bridge-to-term or bridge-to-let. You agree both stages at the start, which can mean one set of legal work. Check whether the switch carries a trigger or product fee, what early repayment charges apply on the term loan, and whether the lender can change the terms if the property or rent comes in below plan.
Seasoning is how long you've owned the property before a lender will lend on its new value rather than what you paid. Many people talk about a "6-month rule", but there's no single rule for commercial property. In practice, plan on six months of ownership before a lender will use the new value, even where you can evidence the works. If your plan relies on a higher value soon after buying, check the mortgage lender's position first.
The trap is the refinance not happening on time. The valuation comes in low or the rent roll isn't there to pass ICR while the bridge term runs out. That usually leads to an extension (typically 1–2% fee) or a re-bridge, and default interest, often over 2% a month, can apply if the loan runs past term without an agreement. Exits fail mostly because LTV is too high. Industry data suggests most bridges are repaid by selling the property, with only a minority refinanced onto a commercial mortgage, so a refinance exit deserves extra checking.
The single most useful step is to get indicative terms from the commercial mortgage lender before you draw the bridge. That tells you what they'll lend, on what valuation basis and with what rent or trading evidence, so you can size the bridge to fit the exit rather than hoping the exit fits the bridge. After that, review your exit at least 3 months before the term ends. See bridging exit, refinance a bridging loan and extend or re-bridge.
If you or a close family member live in the property, or will live in it, the loan is likely to be regulated, and that includes a residential part of a mixed-use building that you'll occupy. Capito doesn't arrange regulated lending, so we pass those enquiries to an FCA-authorised firm. See regulated vs unregulated bridging.
In Ashley's experience, what most often stops a bridge refinancing onto a commercial mortgage is a high LTV, where the debt has grown with rolled-up interest while the mortgage lender's valuation comes in lower than hoped.
Yes. Bridging lenders fund shops, offices, industrial units and mixed-use buildings, though maximum LTV is usually lower than on residential property; on Capito's panel it's up to 75%.
Several weeks is common, depending on the valuation and how quickly you supply documents. No lender will promise a date.
Yes, once the property meets the mortgage lender's criteria, usually let or trading with a valuation that supports the loan. Get indicative mortgage terms before you draw the bridge.
It's a common name for seasoning: some lenders won't lend on a property's new value until you've owned it for about six months. Plan on six months of ownership, as evidence of works doesn't usually shorten it.
A product where one lender provides the bridge and then a longer-term loan on the same property once it's let, usually with terms agreed at the start.
Often 125% at the lender's stress rate, meaning the rent must cover the stressed interest by 1.25 times.
Buying or refinancing commercial property? Tell us about the property and your plans, and a specialist will compare a bridge with a commercial mortgage.
Compare my optionsCapito is a Commercial Finance Broker, not a lender. Capito Finance Limited is not authorised or regulated by the Financial Conduct Authority and does not arrange regulated mortgages. If you or a family member live in the property, or will, the loan is likely to be regulated and we refer you to an authorised partner firm.
Finance is subject to the lender's assessment. Your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
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