Key facts
- A bridging loan extension fee is typically 1–2% of the loan, and the lender may also change the rate for the extra months.
- Default interest on a bridging loan that runs past term is often over 2% a month.
- Lenders on Capito's panel will re-bridge loans that are past term or in default, up to 75–80% LTV.
- Most bridging exits fail because the LTV is too high, so it pays to review your exit at least 3 months before the term ends.
- Capito is a UK Commercial Finance Broker, not a lender. Bridging loans start from £50,000.
Extension or re-bridge: what's the difference?
An extension keeps the loan with your current lender and gives you more time, while a re-bridge replaces it with a new bridging loan from a different lender that repays the old one in full. The table sets out how they usually compare.
Extension with your current lender
Re-bridge with a new lender
Who decides
Your existing lender, who already knows the property and your history
A new lender, starting from scratch
Fees
Extension fee, typically 1–2%, plus legal costs if the facility letter is varied
Arrangement fee, valuation, legal fees on both sides and any exit fee on the old loan
Rate
The lender may keep, raise or reprice the rate for the extra term
Set by the new lender on the new loan
Time
Often quicker, as the security is already in place and a new valuation is often waived
A valuation and legal work are needed; a standard valuation typically takes 2–5 days
What's checked
Why you need more time, the updated exit and how the loan has run
The full case: valuation, exit evidence, redemption statement and loan history
What does each option cost, and how should you compare them?
Compare the total cost of the extra time, not the headline fee. An extension's cost is the extension fee multiplied by the loan balance, plus the interest for the extra months, plus any legal or valuation fees your lender charges to vary the loan. A re-bridge's cost is the new arrangement fee, plus the valuation, plus legal fees for you and the new lender, plus any exit fee on your old loan, plus interest on the new loan for as long as you need it.
Watch for LTV creep
If interest is rolled up, the balance grows each month, so your LTV rises even if the property value stays the same. Any new loan has to repay the full redemption figure, so the creep can take you past what a new lender will offer.
As an illustration only: a £500,000 loan on a £750,000 property starts at about 67% LTV. If rolled-up interest and fees add £60,000 by the end of the term, the balance is £560,000 and the LTV is close to 75%, which leaves very little room for a re-bridge at the top of the range.
For a fuller breakdown of fees, see bridging loan costs.
When should you act?
Start at least 3 months before the term ends, so there's time to line up a re-bridge if your lender says no. A rough timeline:
- 3 months before term end: check your redemption figure, review the exit and ask your lender about an extension.
- 6–8 weeks before: if the extension looks unlikely or expensive, approach other lenders and instruct the valuation and lawyers. With full searches, completion typically takes around 3–4 weeks; with title insurance it can be within about a week.
- After term end: the loan is overdue. Depending on the lender, default interest can apply from the day after the term ends, and it eats into your equity.
What will a new lender look at?
A new lender will want to understand why the original exit slipped and see good evidence that the new one will work. Expect questions on:
- Why the exit slipped. A sale that fell through or a planning delay is common; a clear, honest explanation helps.
- The new exit, with evidence. That might be a sale agreed through an agent, a mortgage agreement in principle, or a refinance onto a longer-term loan.
- The valuation. The lender will instruct its own, which can be an automated valuation on some cases.
- The redemption statement from your current lender, showing the full amount owed including interest, fees and any default charges.
- How the loan has been run. Missed payments, broken covenants or poor communication with the current lender all count against you.
Can you re-bridge with adverse credit?
Some lenders will, because bridging lenders focus more on the property and the exit than the credit file, though recent arrears narrow the choice and may lower the LTV.
What if the loan is already past term or in default?
You can often still re-bridge, but it costs more and the LTV limit is lower. Lenders on Capito's panel will re-bridge loans that are past term or in default up to 75–80% LTV, so the first step is getting an up-to-date redemption figure and checking how much equity is left.
Default interest is often over 2% a month, and it's usually charged instead of the normal rate rather than on top of it. Keep talking to your current lender even if you plan to leave, since a clear plan with dates goes further than silence.
If your lender has appointed a receiver, the position is different and the timings tighten. Our guide to refinancing a property in LPA receivership covers that case, and you should take independent legal advice.
What if neither an extension nor a re-bridge works?
If the LTV is too high or no lender will back the exit, you may need to sell or reduce the loan. A part repayment from another source can bring the LTV down far enough for a re-bridge, and a sale that clears the debt can cost less than months of default interest. Your current lender may give you time to complete a sale if you can show it's progressing, so keep them updated in writing.
Are you living in the property?
If you or a close family member live in the property, or will live in it, the new loan is likely to be a regulated bridging loan. Capito doesn't arrange regulated lending, so we pass these enquiries to an FCA-authorised firm. Our guide on regulated vs unregulated bridging explains the difference.
From the desk
In Ashley's experience, the choice comes down to your LTV, how believable your exit is and how you've run the loan so far. Borrowers who've kept to the terms and have a sensible LTV can often negotiate an extension. While anyone whose record or numbers are weaker will need a much stronger exit case to persuade a new lender.
The two reasons Ashley sees most often for an extension being refused are an LTV that has grown too high and an account that hasn't been run well, such as missed payments or terms that weren't kept.
Common questions
Can I extend my bridging loan?
Often, yes. Most bridging lenders will consider an extension if the loan has been run well, the LTV is reasonable and you can show a credible exit, though they don't have to agree.
How much is a bridging loan extension fee?
Extension fees are typically 1–2% of the loan, and the lender may also change the rate for the extra term. Ask for the full cost in writing, including legal fees.
What happens if you can't repay a bridging loan on time?
The loan goes past term and default interest, often over 2% a month, may start to apply. If it isn't resolved, the lender can enforce its security, which can include appointing a receiver or taking possession.
How many times can you re-bridge?
There's no fixed limit, but each re-bridge needs a credible exit and enough equity. Each one adds fees and makes lenders more cautious.
Can I re-bridge with the same lender?
Not usually. Your current lender will normally only offer an extension, unless something about the case changes, such as you adding extra security. Otherwise, a re-bridge means moving to a new lender.
Can I re-bridge a loan that's past term?
Yes, some lenders will. Lenders on Capito's panel will re-bridge past-term or defaulted loans up to 75–80% LTV, and they'll want to know why the original exit didn't happen.