Refurb-to-let finance gives landlords and property investors a seamless path from purchase to rental income. This specialist mortgage product combines a short-term bridging loan with a guaranteed buy-to-let mortgage exit, both underwritten and approved at the start of your project.
Unlike traditional bridging loans where your exit strategy remains uncertain, refurb-to-let provides two mortgage offers upfront—giving you complete certainty and competitive rates throughout your refurbishment journey.
How Refurb-to-Let Works
1. Application & Dual Offers
Submit your application with a detailed schedule of works. Your lender underwrites both the bridging loan and the buy-to-let exit mortgage simultaneously, issuing two offers at the outset. The bridging offer is typically valid for 3 months, while the BTL exit offer remains valid for 6 months from the initial valuation.
2. Initial Valuation
A surveyor assesses the property’s current condition and projected post-refurbishment value. This determines your bridging loan amount (typically up to 75% LTV of current value) and your exit BTL mortgage (typically up to 80% LTV of the uplifted value).
3. Bridging Finance Completes
Funds are released and refurbishment works begin. No monthly mortgage payments are required during this phase—interest is rolled up into the loan. You have the validity period of the BTL offer (usually 6 months) to complete all works.
4. Refurbishment Phase
Carry out the improvement works according to your submitted schedule. This could include new kitchens, bathrooms, addressing EPC requirements, or light structural improvements that don’t require extensive planning permission.
5. Reinspection
Once works are complete, the property is reinspected to confirm the refurbishment matches your original plans and achieves the expected valuation. For standard refurbishments, no additional inspection fees typically apply.
6. Exit to Buy-to-Let
If the valuation meets expectations and your circumstances haven’t changed, you automatically transition onto your pre-approved buy-to-let mortgage. The bridging loan is repaid from the BTL funds, and you can start generating rental income or move on to your next project.
What Types of Refurbishment Qualify?
Refurb-to-let finance is designed for light to medium refurbishment projects.
Eligible works typically include:
Standard Refurbishments
- New kitchens and bathrooms
- Replacing carpets, flooring, and windows
- Internal redecorating and modernisation
- Addressing damp issues or structural repairs
- Converting loft spaces or garages into habitable rooms
Energy Efficiency Improvements
- Boiler replacements to meet minimum EPC requirements
- Insulation upgrades
- Double glazing installation
- Properties currently rated EPC F or G that need upgrading to meet legal letting standards (minimum EPC E, with many lenders favouring EPC C+)
Light Conversions
- Converting residential properties to small HMOs (up to 6 lettable rooms)
- Changing property use from commercial to residential or vice versa
- Properties purchased at auction requiring work to become mortgageable
What’s Not Included
Refurb-to-let is not suitable for heavy structural works requiring extensive planning permission, ground-up developments, or projects taking longer than 6-12 months.
For these scenarios, consider development finance or heavy refurbishment bridging instead.
Real-World Examples of Refurb Mortgages in Action
Example 1: Auction Purchase Transformation
The Scenario: Sarah spotted a three-bedroom terraced house at auction for £100,000. The property had an EPC rating of F and needed a new kitchen, bathroom, and rewiring before it could be let.
The Solution:
- Bridging loan: £75,000 (75% LTV) at 0.67% per month
- Refurbishment budget: £20,000 from personal funds
- Works completed: Within 4 months
- Post-refurbishment value: £160,000
- BTL exit mortgage: £120,000 (75% LTV) at 5.44% fixed for 5 years
- Rental income: £700 per month
The Result: Sarah repaid the bridging loan, released £45,000 in equity, and now generates steady rental income while planning her next project.
Example 2: Portfolio Expansion with Light Works
The Scenario: David, an experienced landlord, found a two-bedroom flat for £180,000 that needed cosmetic updates to maximise rental yield.
The Solution:
- Bridging loan: £135,000 (75% LTV) at 0.64% per month
- Works: New kitchen, bathroom, flooring, fresh paint
- Timeline: 3 months
- Post-refurbishment value: £220,000
- BTL exit mortgage: £165,000 (75% LTV) at 5.64%
- Rental income: £950 per month
The Result: David increased the property value by £40,000, secured a competitive BTL rate, and added another high-yielding asset to his portfolio.
Example 3: HMO Conversion
The Scenario: Emma purchased a large Victorian house for £200,000 with plans to convert it into a 5-bedroom HMO.
The Solution:
- Bridging loan: £150,000 (75% LTV) at 0.67% per month
- Works: Created 5 en-suite bedrooms, fire safety installations, communal kitchen upgrades
- Timeline: 5 months
- Post-refurbishment value: £280,000
- HMO BTL exit: £210,000 (75% LTV)
- Rental income: £2,400 per month (5 rooms at £480 each)
The Result: Emma transformed an underutilised property into a profitable HMO, significantly increasing both property value and rental yield.
Key Benefits
Certainty from Day One
Both your bridging finance and BTL exit mortgage are approved upfront, eliminating uncertainty about your refinancing strategy and locking in your long-term interest rate before works begin.
Maximise Borrowing Potential
Your exit BTL mortgage is based on the property's projected post-refurbishment value, not its current condition—allowing you to access more capital than standard bridging or BTL products alone.
Competitive Rates
Bridging rates start from as low as 0.64% per month, with BTL exit rates from 5.44%. These combined products often offer better overall terms than arranging separate bridging and BTL deals.
No Monthly Payments
Interest on the bridging loan is typically rolled up, meaning no monthly payments are due during the refurbishment phase—preserving your cash flow for the works themselves.
Streamlined Process
One application, one lender, one set of legal fees, and potentially just one valuation—saving you time, admin, and money compared to arranging bridging and BTL separately.
Flexible Property Types
Available for single dwellings, HMOs (up to 6 rooms), and multi-unit freehold blocks (MUFBs), in personal ownership or through limited companies.
Typical Costs & Terms
Bridging Phase:
- Interest rates: From 0.64% per month
- LTV: Up to 75-80% of current property value
- Arrangement fees: Typically 1.5-2% of loan amount
- Term: Usually 3-6 months (though works must complete within BTL offer validity)
BTL Exit Phase:
- Interest rates: From 5.44% per annum
- LTV: Up to 75-80% of post-refurbishment value
- Arrangement fees: Typically 2% of loan amount
- Term: Standard 25-year mortgages available
Other Potential Costs:
- Valuation fees (initial and reinspection, though some lenders waive reinspection fees)*
- Legal fees (one set covering both phases)*
- Building insurance during works
- Broker fees*
* Fees lower than a bridge – remortgage would normally be.
Who Is Refurb-to-Let For?
Refurb-to-let finance suits:
- Experienced landlords expanding their portfolios with unlettable properties
- Property investors pursuing the “refurb, rent, refinance” strategy
- First-time landlords with a clear plan and refurbishment budget (lender criteria vary)
- Developers working on light residential projects
- Auction buyers purchasing properties below market value
- Portfolio landlords seeking to add value through strategic improvements
Eligibility Considerations
Lenders typically assess:
- Your experience: Some lenders require previous landlord or refurbishment experience; others consider first-timers on a case-by-case basis
- The property condition: Current state and extent of works needed
- Schedule of works: Detailed, costed plan showing what will be done and when
- Projected timelines: Realistic completion dates within the offer validity period
- Post-refurbishment value: Surveyors must agree with your projected uplifted value
- Rental yield: Expected rental income must meet BTL affordability requirements
- Credit history: Standard credit checks apply
- Deposit/equity: Typically need 20-25% of the purchase price or current value
Why Choose Acorn.finance
At Acorn.finance, we specialise in complex property finance scenarios and have access to specialist lenders offering refurb-to-let products with competitive terms. Our expert brokers:
- Match you to the right lender based on your project specifics and experience level
- Streamline your application by ensuring all documentation is complete and compelling
- Negotiate the best rates using our relationships with specialist lenders
- Guide you through the process from initial enquiry to BTL completion
- Provide strategic advice on maximising your property’s value and rental potential
Whether you’re a seasoned developer or a first-time landlord with a vision, we’ll help you secure the finance you need to transform unlettable properties into profitable rental assets.
Get Started Today
Ready to unlock the potential of your next refurbishment project? Contact Acorn Finance for a free, no-obligation consultation. Our team will assess your plans, explain your options, and connect you with the right lender to make your property investment goals a reality.
Call us today or complete our online enquiry form to discuss your refurb-to-let requirements.