For Borrowers
Property Finance FAQs
Most people arriving here have already worked out that a high street mortgage will not do the job. What they have not worked out is which of the alternatives they need, what it will actually cost, and whether they will qualify.
That is what this page is for. These are the property finance questions we get asked most often on the phone, answered the way we would answer them on the phone. Where a question needs more room than a paragraph, we have linked to the page that covers it properly.
A quick word on who is answering. Clever Lending is a specialist property finance broker, not a lender. We have been placing bridging, commercial, development and buy to let cases for over 25 years, and our team came into this from valuations, banking and lending rather than from sales. So when we tell you a deal will not work, that is not us being unhelpful. It is us saving you a valuation fee.
If you would rather just talk it through, send us the outline of your case and we will come back with a realistic view. No cost for that, and no obligation.
Which type of finance do I need?
This is the question underneath most of the others, and getting it wrong is expensive. The differences below decide which lenders will even look at your case.
A bridging loan is a single lump sum secured against a property you already own or are buying, repaid from a sale or a refinance, usually within 12 to 18 months. Development finance is released in stages as building work progresses, with each drawdown signed off by a monitoring surveyor before the money leaves the lender.
The dividing line is the scale of the works. Light refurbishment, a new kitchen and bathroom, redecoration, a small extension, usually sits with a bridge. Ground-up construction, conversions, change of use and heavy structural work need development finance, because the lender is underwriting a build programme rather than a property.
There is a middle ground, and it is where a lot of cases get placed badly. A refurbishment bridge with a works tranche can cover projects that look too big for a standard bridge but too small for full development funding.
More detail: bridging finance and development finance.
Auction finance is a bridging loan, structured to meet an auction deadline. The product mechanics are the same. What changes is the timetable and the preparation.
You normally have 28 days from the fall of the hammer to complete, and your 10% deposit is already committed. That means the valuation, the legals and the lender decision have to run in parallel rather than in sequence. The practical consequence is that auction finance needs arranging before you bid, not after you win.
More detail: auction finance.
It depends on what the property is, not on what you plan to do with it. A wholly residential property let to tenants is a buy to let. A property with any commercial element, a shop with a flat above, a pub with accommodation, an office converted to part-residential, is semi-commercial and usually needs a commercial or semi-commercial mortgage.
The grey area is size and complexity. Large HMOs and multi-unit blocks sit with buy to let lenders at some lenders and commercial lenders at others, and the lender you pick changes the loan you can raise, because one sizes on rental cover and the other on the investment value of the block.
If you are buying premises to trade from yourself, that is an owner-occupier commercial mortgage, assessed on your business accounts rather than on rent.
More detail: commercial mortgages and buy to let mortgages.
Bridge when the timing is the problem. Wait when the property is the problem.
If the property is mortgageable today and you simply need to move faster than a mortgage lender will move, a bridge buys you the time and you refinance out of it. If the property is not mortgageable, no kitchen, no bathroom, structurally unsound, short lease, then a mortgage lender will decline it whatever your timescale, and a bridge is the only route in. You fix the property, then refinance.
The cost of bridging is real, so the test is straightforward. Does the deal still work once you have added a month of interest, an arrangement fee and two sets of legals? If it only works at the mortgage rate, it was never a bridging case.
More detail: alternatives to bridging loans.
For anything beyond light works, development finance is usually cheaper overall, even though the headline rate can look similar.
The reason is how interest is charged. On development finance you pay interest on the money you have actually drawn down, so a build that draws in stages accrues far less interest than a single lump sum sitting in your account from day one. Add the cost of arranging two facilities instead of one, two valuations and two sets of legals, and the bridge-then-refinance route often loses.
Where bridging wins is speed and simplicity. If you need to secure the site now and the scheme is not yet ready for a lender to underwrite, a bridge to buy the land followed by development finance is a normal and sensible structure.
What specialist property finance costs
Rates are the part everyone asks about and the part that matters least. The fee stack is where deals get expensive. You can put your own numbers through our bridging loan calculator.
Because the loans are short. A bridge running for seven months is not usefully described by an annual rate, so the market quotes monthly and you multiply up.
The conversion is straightforward. A rate of 0.75% per month is roughly 9% a year, before compounding. Watch the compounding, though. On a rolled-up facility the interest is added to the balance each month and then earns interest itself, so the true annual cost sits above the simple multiplication.
As a guide at the time of writing in August 2026, bridging typically runs from around 0.55% to 1.25% per month depending on the charge, the asset and the complexity, and development finance from around 0.65% to 1.10% per month. Those are market ranges, not quotes. Your rate depends on your gearing, your experience and the exit.
More than most people budget for. On a typical bridging or development case:
- Arrangement fee, usually 1% to 2% of the gross loan, taken on completion
- Valuation fee, paid upfront, higher on commercial and development
- Lender’s legal fees, which you pay on top of your own
- Your own solicitor’s fees
- Exit fee, 0% to 1% depending on the lender, and plenty no longer charge one
- Monitoring surveyor fees on development finance, charged at each drawdown
- Broker fee
We are also paid commission by the lender. The actual amount is confirmed to you in writing on your illustration.
The number worth comparing between quotes is the all-in cost over your realistic term, not the monthly rate. A cheaper rate with a 2% arrangement fee and a 1% exit fee frequently costs more than a slightly higher rate with neither.
More detail: the cost of a bridging loan and development finance costs explained.
Three ways of paying the same interest, at three different points in time.
- Retained: the lender holds back the full term’s interest from the loan on day one. You receive less money, and you make no monthly payments.
- Rolled up: interest is added to the balance each month and settled in full when you repay. Again, no monthly payments, but the balance grows.
- Serviced: you pay the interest monthly from your own income, and the loan balance stays flat.
Retained and rolled up protect your cash flow, which is why most developers and investors use them. They also reduce the net amount you receive, so you need to size the facility with that in mind. Serviced interest gives you the largest net advance, but the lender will want evidence you can afford the payments.
It varies by product, and by which cap bites first.
On bridging, lenders generally cap at 70% to 75% of value, so expect to fund 25% to 30% yourself. On commercial mortgages, deposits typically run 25% to 40%, with owner-occupiers reaching higher loan to values than investors. On development finance, two caps apply at once, loan to cost and loan to gross development value, and the lower of the two governs. In practice most developers fund 15% to 25% of total project costs from equity.
There is one route that changes the maths. If you own another property with equity in it, a lender can take an additional charge over it and lend against the combined security, which can reduce or occasionally remove the cash deposit entirely.
How long each type of finance takes
Timescales are where specialist finance is oversold hardest. Here is the realistic position.
| Finance type | Realistic timescale from full submission |
|---|---|
| Bridging, clean case | 10 to 14 working days |
| Bridging with title issues, second charge or commercial elements | 4 to 6 weeks |
| Auction finance | Tight, and dictated by your 28-day deadline. Arrange it before you bid |
| Commercial mortgage | 4 to 12 weeks depending on complexity |
| Development finance | 6 to 10 weeks from enquiry to first drawdown |
| Buy to let mortgage | 3 to 6 weeks |
Faster than the bottom of those ranges is possible, and we have done it. It requires a clean title, an unencumbered or straightforward security, a solicitor who has done this before, and every document ready on day one.
Almost never the lender. In our experience the recurring culprits are these:
- Solicitors who do not do bridging. A conveyancer who handles residential sales will add a week to a bridging file simply by not knowing what to expect. This is the single biggest avoidable delay.
- Title problems found late. Missing rights of way, absent landlords, unregistered land, restrictive covenants.
- Documents arriving in instalments. Every gap in the pack restarts the underwriter’s clock.
- Valuations that come in short, which forces a re-run of the numbers and sometimes a change of lender.
- Exit evidence that was assumed rather than obtained. If your exit is a refinance, the lender wants to see an agreement in principle, not an intention.
Yes, more than most borrowers expect. Instruct a firm that handles short-term property finance routinely, and instruct them before terms are issued rather than after. We will tell you honestly if the firm you have chosen is likely to slow the case down.
Whether you will qualify
Less than you would think for a first view. To tell you whether something is placeable and roughly on what terms, we need the property type and address, what you are buying it for or what you own it for, the amount you need, the timescale, and your exit. Anything unusual about the case, tell us that too. The quirks are what decide the lender, so hiding them only wastes your time.
Full documentation follows once the route is clear. We would rather give you a straight answer in a day on partial information than a perfect answer in a week.
Usually, yes, though it narrows the lender panel rather than closing it. What matters is the type, the size and the age of the adverse, and which product you are applying for.
On bridging and development finance, the security and the exit carry the application. Income and credit history still matter, but they carry less weight than they would on a residential mortgage, and a borrower with defaults and a strong evidenced exit can secure better terms than a clean borrower with a vague plan. On buy to let and commercial mortgages, adverse has more effect, because the lender is underwriting a longer relationship.
What we will not do is tell you every case is placeable. Some are not. We will tell you which side of the line yours falls on, and why.
More detail: specialist and complex income mortgages.
We arrange finance across the range from straightforward single-property cases up to large loans and high net worth lending. If your case is too small or too large for us to place well, we will say so at the first conversation rather than at the third.
More detail: large loans and high net worth mortgages.
What is regulated, and what is not
This is the question almost nobody asks and everybody should.
Not all of them, and the distinction changes what protection you have.
Broadly, a loan secured against a property that you or an immediate family member live in is a regulated mortgage contract, and comes with the full suite of FCA consumer protections, including access to the Financial Ombudsman Service. A loan secured against an investment property, taken for business purposes, generally is not.
In practice that means commercial mortgages, and some buy to let and bridging loans, are not FCA regulated products. Regulated bridging exists and we arrange it, for example where someone is breaking a chain on the home they live in. Unregulated bridging covers investment and business cases.
BB Mortgages Limited, trading as Clever Lending, is authorised and regulated by the Financial Conduct Authority under register number 795789. We will tell you at the outset which side of the line your case falls on.
Less, and you should go in knowing it. Unregulated lending assumes you are borrowing for business purposes and treats you as a commercial party rather than a consumer. There is no FCA affordability assessment in the form applied to residential mortgages, and the Financial Ombudsman route is generally not available.
That is not a reason to avoid unregulated finance. It is the basis on which most property investment is funded. It is a reason to read the terms properly, understand what happens if your exit is late, and check the default rate before you sign rather than after.
No. We are a credit broker, not a lender. We do not lend our own money and we have no product to push. Our job is to work out which lender on our panel will do your deal on the best terms and to present the case so that they say yes.
What has changed in 2026
The market has moved this year in ways that affect real cases. Three changes come up constantly.
Section 21 was abolished on 1 May 2026. All assured tenancies in England are now periodic, fixed terms have gone, and landlords need a valid ground under Section 8 to recover possession.
For lending, the effect is indirect but real. Lenders are looking harder at how long it might take to regain possession, and at tenant profile and property type as a result. Where it bites most is on cases that were already at the edge of appetite, HMOs, supported living, properties with difficult tenant profiles. Well-run standard lets are largely unaffected on criteria, though some lenders have tightened around the margins.
If you are buying or refinancing now, the practical points are to have your tenancy documentation in order and to expect more questions about it than you would have had this time last year.
Not today. Rental properties in England and Wales must currently reach EPC E to be let legally, and that has not changed.
What has changed is how lenders are pricing the future. The government has stated its intention to require EPC C for private rented homes by 1 October 2030, subject to legislation. It is not law yet. But lenders are already factoring it in, with better pricing appearing on A to C rated stock and more questions being asked about upgrade plans on D and E properties.
The practical read for a landlord refinancing on a five-year fix in 2026 is that the fix runs past the proposed deadline. Worth costing the upgrade now rather than discovering it in 2030.
You are in a large group. Around 1.8 million fixed rate mortgages end during 2026, including roughly £49.7 billion of buy to let lending, much of it fixed when the base rate was near zero.
The stress test, not the headline rate, is usually what caps the loan. Lenders test whether rent covers the interest at a stressed rate by a set margin, commonly 125% for basic rate taxpayers and limited company borrowers and 145% for higher rate taxpayers holding in their own name.
Realistic routes when the rent no longer stretches:
- A product transfer with your existing lender, which usually avoids a fresh affordability assessment but keeps you with one lender’s pricing
- A five-year fix, which many lenders stress at a lower rate than a two-year, and which can move a marginal case over the line
- Reducing the loan with a capital payment at refinance
- Top-slicing, where a lender allows surplus personal income to support the shortfall
- Restructuring the ownership, which has tax consequences and needs an accountant, not a broker
More detail: how buy to let lending is calculated.
Usually because the lender could not model your income or your property, not because you cannot afford the loan.
The common patterns are a company director being assessed on salary and dividends while retained profits sit in the business, a contractor’s day rate being annualised wrongly, a property with a commercial element that fell outside a residential lender’s policy, or a build type the automated system rejected without a human seeing it.
Specialist lenders underwrite these manually. That is the whole difference. The case that failed a computer often passes a person, provided it is presented in the format that lender expects.
Working with us
For a straightforward residential mortgage, direct is often fine. For specialist property finance, it rarely is, for two reasons.
First, a large part of this market does not deal with the public at all. Many bridging, development and commercial lenders distribute only through intermediaries, so those products are not available to you directly whatever you do.
Second, placement is the job. There is no comparison site for a semi-commercial purchase with a short lease and a limited company borrower. Knowing which three lenders out of a large panel will look at that, and which of the three will actually complete, is what a specialist broker is for. Every declined application also leaves a search footprint, so guessing is not free.
We start with a same-day sense check. You give us the outline, we tell you whether it is placeable, roughly on what terms, and what would stop it. If it does not work, you find out that day.
If it does work, we tell you exactly which documents that particular lender needs, in the order they want them. Then decision in principle, valuation, offer, legals and completion, with someone here who knows your case by name the whole way through.
Nothing. The initial conversation and any quotations are free, and you are under no obligation to proceed. A fee becomes chargeable only if you choose to go ahead.
Still not sure which product you need?
Send us the outline. Property type, what you are trying to do, the amount, and your timescale. We will come back with a straight view on what is realistic, what is not, and exactly why.
Get in touch or call 0800 316 2224.