Bridging Loan Refinance for an 8-Bed HMO Conversion

Positive Commercial Finance specialises in arranging Bridging Loan Refinance for landlords, property investors and developers across the UK. This case study shows how we helped an experienced landlord refinance an existing bridging loan after planning delays threatened to derail an HMO conversion project.

The Challenge

Our client had recently purchased a residential property using a bridging loan and had already started refurbishment works.

As the project progressed, they recognised an opportunity to increase the property’s value by converting the loft and creating an 8-bedroom HMO. To do this, they needed planning permission before construction could continue.

The client already had experience owning HMO properties and had successfully completed refurbishment and conversion projects, so they were confident the revised scheme would deliver a much stronger return.

However, waiting for the planning decision delayed the contractor’s programme. By the time planning permission was granted and works could restart, the original bridging loan no longer provided enough time to complete the project.

Unfortunately, the existing lender’s policy only allowed a one-month extension, which wasn’t sufficient.

The client needed a funding solution that would:

• Refinance the existing bridging loan
• Provide enough time to complete the refurbishment
• Keep borrowing costs as low as possible
• Complete quickly so the project could continue without interruption

Our Solution

Positive Commercial Finance sourced a new specialist lender offering a Bridging Loan Refinance tailored to the project’s revised timescales.

The new facility gave the client the additional time needed to complete the loft conversion and finish the property to a high standard.

Even better, the refinance reduced the overall cost of borrowing. The client secured a highly competitive interest rate of 0.6% per month, which was lower than the rate charged by the original lender.

Because we understood both the project and the lender’s requirements, the refinance was completed quickly, allowing the contractor to return to site without unnecessary delays.

Deal Structure

• Loan to Value (LTV): 43%
• Interest Rate: 0.6% per month (interest retained)
• Arrangement Fee: 2%
• Exit Fee: None
• Term: 12 months

The Outcome

The client successfully refinanced their existing bridging loan, giving them the time needed to complete the refurbishment and transform the property into an 8-bedroom HMO.

By switching to a new lender, they not only avoided unnecessary pressure to finish the works but also benefited from a lower interest rate than their original facility.

The completed project delivered a significantly higher-value asset, demonstrating how the right Bridging Loan Refinance can help experienced landlords adapt to changing circumstances without compromising on their investment strategy.