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Last updated on June 11th, 2025 at 03:19 pm
The typical deposit you need for a bridging loan is 25% of the property’s value, based on borrowing a maximum loan-to-value (LTV) of 75%, with some bridging lenders willing to offer 80% or 85% LTV and therefore will accept a deposit of 15% or 20% of the property’s asking price.
Example: if you are looking to purchase a property for £500,000 at 75% LTV, you will need to put down a deposit of 25% which is £125,000 and the lender may be able to lend you the remaining 75% at £375,000.
Importantly, your deposit may consist of a cash deposit, investment or existing property value – so if you own a property with equity, this equity can be used as a deposit.
Bridging finance is popular for property developers and investors that may not have access to immediate cash and have their capital tied up in existing properties. With small deposits and the option to use existing equity in other properties, bridging offers a scalable way to grow a portfolio.
What is The Minimum Deposit Needed For a Bridging Loan?
The minimum deposit for a bridging loan is usually 25%-40% of the property’s value, but this can vary between lenders.
| Type of Bridging Loan | Typical LTV | Minimum Deposit / Equity Required |
| Residential bridging loans | Up to 75% | 25% |
| Commercial bridging loans | 60% – 70% | 30% – 40% |
| Second charge bridging loans | 60% – 65% | 35% – 40%+ |
What Are The Minimum Deposits For a Residential Bridging Loan?
Borrowing against flats and homes where people live is considered less risky because there is a strong market and demand for these properties. A minimum deposit of 25% is usually required, but you may require a deposit of 30% or 40% depending on your project and the proposed risks.
What Are The Minimum Deposits For a Commercial Bridging Loan?
The minimum deposit for a commercial bridging loan is 30%-40% because these are typically seen as riskier than residential properties. Commercial properties such as offices, warehouses and shops are often harder to sell than residential properties and some lenders argue that there is less demand and a smaller market for these kinds of properties – hence a higher deposit is required to manage the risk for the lender.
What Is The Minimum Deposit For Second Charge Bridging Loan?
The minimum deposit for a second charge bridging loan is usually around 35%-40% of the property’s value depending on various factors including affordability, project growth, the borrower’s background and more.
This type of loan is the second priority in terms of payments against a property and often sits behind an existing mortgage. Being further down the chain, there must be enough equity in the property to be eligible for a second charge and therefore the equity or deposit must be around 35%-40% of the property’s value.
What Factors Impact The Deposit For a Bridging Loan?
There are numerous factors that impact the deposit required for a bridging loan to be approved and funded, including:
The lender’s criteria – Some lenders will have a different criteria and risk appetite, especially when the market is confident or declining. When working with a bridging loan broker, it is common to receive different terms and offers, since each lender has a different risk profile.
Borrower’s background – A seasoned and regular borrower with an excellent track record with developing property may get preferential rates and loan-to-value options, compared to someone with less experienced or a negative track record. Other factors such as the size of their company, credit score and a strong exit strategy.
Project and asset value – The complexity of the project and the potential growth opportunity of the property will be considered by the lender when offering loan terms and minimum deposit amounts. Equally, having equity in another property can be used as a deposit. Hence, the value of this equity and its current status may be a contributing factor.
Loan terms – Your proposed loan terms by the lender will also influence deposit amounts. Some lower deposits may be offered but come with higher monthly fees. Loan duration may also play a role in determining the deposit amount. Mezzanine finance and senior stretch loans may allow you to borrow large sums and make a lower deposit, giving up some equity in the project.
Security – Some lenders will accept additional security for any other assets or properties you own, which could help you get a bridging loan with a low deposit.
Can I Get a Bridging Loan With No Deposit?
No, typically, bridging loans will require you to make a deposit, usually starting from 25%.
However, in some circumstances, you may be able to get a bridging loan with no deposit if:
- You have equity in other properties that can be used towards a new bridging loan
- You offer multiple properties as collateral to cover the full loan amount
- You have a strong exit strategy and an experienced track record
See also: Do you need to have a salary to get a bridging loan in the UK?
What is The Maximum LTV I Can Borrow For a Bridging Loan?
The maximum LTV you can borrow for a bridging loan is typically 70%-75% for residential properties.
Some lenders may accept 80%, 85% or 90% in particular circumstances, including using our properties to cross charge or add security, having a strong track record or using an added layer of finance such as mezzanine finance.
