Can You Get a Bridging Loan Without a Deposit?

Can you get a bridging loan without a deposit? The short answer is yes, potentially. But it depends on the property, the security available and how you intend to repay the loan.

Most property purchases require a deposit, and bridging finance is no exception. However, specialist lenders may consider funding 100% of a property’s purchase price where there is sufficient equity elsewhere or the transaction meets certain lending criteria.

For property investors, landlords and developers, this can create opportunities to purchase properties without tying up large amounts of cash.

At GPS Financial, we arrange bridging loans for borrowers across the UK, including specialist funding arrangements where a traditional cash deposit may not be required.

Let’s look at how no-deposit bridging finance works, who might qualify and what you need to consider before applying.

Is It Possible to Get a Bridging Loan Without a Deposit?

Yes. Some specialist lenders will consider a bridging loan without a cash deposit, provided there is sufficient security to support the borrowing.

Ordinarily, a bridging lender will advance a percentage of the property’s value, commonly up to around 70% to 75%, although criteria vary.

For example, if you’re purchasing a property for £200,000 and a lender offers 75% of the purchase price, you would ordinarily need to contribute £50,000 towards the purchase, plus any associated costs.

However, there are circumstances where a lender may consider funding the entire £200,000 purchase price.

These include:

• Using equity in another property as additional security.

• Purchasing a property significantly below its independently assessed market value.

• Certain transactions involving gifted equity or concessionary purchases.

• Providing other acceptable security, subject to the lender’s criteria.

The important distinction is that borrowing 100% of the purchase price does not necessarily mean borrowing 100% of the property’s market value.

Lenders still need sufficient security, a suitable repayment strategy and confidence that the loan can be repaid.

How Can You Get a Bridging Loan Without a Deposit?

There are several ways a no-deposit bridging loan might be structured.

1. Using Another Property as Additional Security

One of the most established ways to arrange bridging finance without a cash deposit is to use another property as additional security.

If you already own a property with available equity, a specialist lender may be willing to secure the loan against both properties.

For example:

• You want to purchase a property for £200,000.

• You own another property worth £350,000.

• Your existing property has an outstanding mortgage of £50,000.

• You have £300,000 in equity in that property.

A lender may consider the combined value of both properties when deciding how much to advance.

In this example, the total property value would be £550,000, with total secured borrowing of £250,000 if a £200,000 bridging loan were agreed.

That represents approximately 45.5% of the combined property values.

Although the bridging loan would cover the full purchase price, the overall security position could be attractive to a lender.

Of course, the existing mortgage, charge arrangements, valuations and lender criteria would all need to be assessed.

We’ve covered this approach in more detail in our article Using Additional Property Security to Fund a Purchase.

You can also explore our dedicated 100% LTV bridging loans service.

2. Buying a Property Below Market Value

Another potential route to a bridging loan without a deposit is purchasing a property at a significant discount.

This is sometimes referred to as a below-market-value purchase.

For example, imagine a property has an independently assessed market value of £200,000, but you’ve negotiated a purchase price of £140,000.

If a lender is prepared to lend against the £200,000 valuation rather than the £140,000 purchase price, a loan of £140,000 would represent 70% of the market value.

That could potentially fund the full purchase price without a cash deposit.

However, not every lender will lend against the open-market valuation when it exceeds the purchase price.

Some lenders use the lower of the purchase price or valuation, particularly where the property has recently changed hands or the transaction involves connected parties.

Others may consider the higher valuation where the discount is genuine, independently supported and acceptable under their lending criteria.

The reason for the discount, the seller’s circumstances and the property’s condition can all influence the decision.

3. Gifted Equity and Concessionary Purchases

In certain circumstances, a property may be sold for less than its market value by a family member or another connected party.

The difference between the purchase price and market value is sometimes described as gifted equity.

For example, a property worth £250,000 might be sold to a family member for £175,000.

Depending on the lender, the £75,000 difference may be considered when assessing the security available.

However, these transactions can involve additional legal, tax and lending considerations.

Lenders may require evidence of the relationship between buyer and seller, confirmation of the property’s value and an explanation of the transaction.

Some lenders will not accept this type of arrangement at all.

Gifted equity should therefore never be assumed to replace a cash deposit without checking the proposed lender’s criteria.

Does a 100% Bridging Loan Mean You Need No Money Upfront?

Not necessarily.

This is one of the most important things to understand when considering a bridging loan without a deposit.

Funding 100% of the purchase price does not automatically mean that every cost associated with the purchase will be covered.

You may still need money for:

• Stamp Duty Land Tax or Land Transaction Tax in Wales.

• Legal fees and disbursements.

• Property valuation fees.

• Lender arrangement fees.

• Broker fees, where applicable.

• Refurbishment or improvement works.

• Interest and other finance costs.

Some lenders may allow certain costs to be added to the facility, provided the overall security and lending criteria permit it.

However, retained interest and fees can reduce the net amount available to complete the purchase.

For example, a £200,000 gross bridging facility does not necessarily mean £200,000 will be released to your solicitor.

The lender may deduct interest and fees before releasing the funds.

This is why it’s essential to understand the net loan amount, not just the headline borrowing figure.

At GPS Financial, we assess the full funding requirement before recommending a suitable arrangement.

Can First-Time Property Investors Get a Bridging Loan Without a Deposit?

Potentially, although it may be more difficult.

Some specialist lenders prefer borrowers with experience of property investment, refurbishment or development, particularly where the proposed borrowing represents a high percentage of the purchase price.

An experienced investor may be able to demonstrate a successful track record, established assets and a reliable repayment strategy.

However, being a first-time investor doesn’t automatically prevent you from obtaining bridging finance.

Lenders may consider factors such as:

• The value and type of property being purchased.

• The amount and quality of security available.

• Your financial circumstances.

• Your experience managing property or building projects.

• The proposed refurbishment works, if applicable.

• How the bridging loan will be repaid.

If you’re new to property investment, having a realistic business plan and a well-supported exit strategy becomes particularly important.

Can You Get a No-Deposit Bridging Loan for an Auction Property?

Yes, in some circumstances.

Property auctions can present opportunities to purchase properties at attractive prices, but they also come with strict deadlines.

Many auction contracts require a deposit when the hammer falls, with the remaining balance payable within a specified completion period.

This creates an important distinction.

Even if a bridging lender agrees to fund 100% of the purchase price, you may still need money available to pay the auction deposit immediately.

The bridging loan may not complete until later, and reimbursement of any deposit already paid depends on the lender’s criteria and the structure of the transaction.

If you’re considering buying at auction without substantial cash reserves, it’s important to arrange your funding strategy before bidding.

You should also establish whether the property is acceptable security and whether the lender can realistically meet the auction completion deadline.

Can You Get a Bridging Loan Without a Deposit for an Unmortgageable Property?

Potentially, yes.

Properties requiring substantial renovation may not qualify for a conventional mortgage in their current condition.

Examples include properties with missing kitchens or bathrooms, structural problems or significant disrepair.

Specialist bridging lenders may be willing to consider these properties where there is sufficient security and a credible plan to complete the necessary works.

If the property is being purchased at a substantial discount, or you have additional property security available, it may be possible to reduce the cash deposit required.

However, lenders will consider the property’s current condition, valuation, cost of works and expected value after refurbishment.

Our article Can You Get a Bridging Loan on an Unmortgageable Property? explains this in more detail.

You can also explore our bridging finance for refurbishment options.

How Much Does a Bridging Loan Without a Deposit Cost?

The cost of bridging finance depends on the lender, loan amount, security available, property type and proposed loan term.

A typical bridging loan may involve:

• Monthly interest.

• A lender arrangement fee.

• Valuation fees.

• Legal fees.

• Broker fees, where applicable.

• Exit fees or early repayment charges, where applicable.

Higher-leverage transactions may carry additional risk for the lender, which can affect pricing and availability.

At GPS Financial, our bridging broker fee is capped at £995, and in some circumstances we may waive it.

We’ll explain the costs involved so you understand what you’ll need to pay and how much funding will actually be available.

For a worked example, read How Much Does a £200,000 Bridging Loan Actually Cost?

How Do You Repay a Bridging Loan Without a Deposit?

Whether or not you contribute a cash deposit, lenders will still expect a clear and credible repayment strategy.

This is commonly referred to as the exit strategy.

Refinancing onto a long-term mortgage

Property investors may purchase a property using bridging finance, complete any necessary refurbishment and then refinance onto a longer-term mortgage.

For rental properties, this could involve arranging a buy-to-let mortgage once the property meets the lender’s criteria.

However, refinancing is not guaranteed. The property’s valuation, rental income, borrower circumstances and lending criteria at the time will all affect the amount available.

Selling the property

Some investors use bridging finance to purchase and renovate a property before selling it.

The sale proceeds are then used to repay the bridging loan.

This strategy depends on realistic assumptions about the property’s resale value, market conditions and the time required to complete a sale.

Selling another property

A borrower may arrange bridging finance to complete a purchase while waiting for another property to sell.

Once that sale completes, the proceeds can be used to repay the bridging loan.

This is particularly relevant to homeowners dealing with a delayed property chain.

Our article Buying a House Before Selling Yours: How Chain Break Bridging Works explores this situation.

Whatever your intended exit, it’s important to consider what happens if the repayment takes longer than expected.

We’ve also covered this in What Happens When a Bridging Loan Reaches Its Repayment Date?

What Are the Risks of a Bridging Loan Without a Deposit?

Although no-deposit bridging finance can be useful, it isn’t suitable for every borrower or transaction.

The risks can be significant, particularly where additional properties are used as security.

Your property could be repossessed

Bridging loans are secured borrowing.

If you cannot repay the loan, the lender may take enforcement action against the property or properties used as security.

Where your home is involved, the consequences can be particularly serious.

Costs can increase if your exit is delayed

Bridging loans are designed for short-term borrowing.

If a property sale takes longer than expected or refinancing is delayed, additional interest and charges may become payable.

Property values can change

A lower-than-expected valuation may reduce the amount available to borrow or refinance.

This is especially relevant where the original purchase was funded using a discounted valuation or expected refurbishment uplift.

Multiple properties may be at risk

Where additional security is used, the lender may have legal charges over more than one property.

This means a problem with one transaction could affect other properties you own.

A bridging loan without a deposit should only be considered where the overall borrowing is affordable, the security is appropriate and the repayment strategy is realistic.

How GPS Financial Can Help With No-Deposit Bridging Finance

At GPS Financial, we understand that having wealth tied up in property doesn’t necessarily mean you have cash readily available for your next purchase.

You might be an experienced landlord expanding your portfolio, a developer purchasing a refurbishment project or a homeowner trying to complete a purchase before another property sells.

Every situation is different.

As a whole-of-market specialist property finance broker, we can explore suitable lending options and assess whether your circumstances could support a bridging loan without a traditional cash deposit.

We can help with:

• Bridging loans using additional property security.

• Potential 100% purchase price funding.

• Below-market-value property purchases.

• Auction purchases.

• Refurbishment and unmortgageable properties.

• First and second charge bridging arrangements.

• Longer-term refinancing and exit strategies.

With access to over 200 lenders across our wider lending panel, we can look beyond standard high-street lending criteria to explore suitable specialist finance solutions.

We also know that these transactions can involve several moving parts, particularly where multiple properties, lenders and solicitors are involved.

Our team will explain your options clearly, keep you updated throughout the process and work closely with the relevant parties to help your transaction progress.

Most importantly, we’ll tell you what’s realistic from the outset, including whether a cash deposit will actually be needed.

Frequently Asked Questions About Bridging Loans Without a Deposit

Can I borrow 100% of the purchase price with a bridging loan?

Potentially, yes. Some specialist lenders consider 100% purchase price funding where there is sufficient additional security or a substantial, acceptable discount against the property’s market value.

Can I get a bridging loan without owning another property?

Possibly. Some lenders may consider below-market-value purchases or other acceptable arrangements. However, without additional security or sufficient equity within the transaction, obtaining full purchase price funding is likely to be more difficult.

Do I need a deposit if I have equity in another property?

Not necessarily. A lender may consider taking additional security over an existing property, potentially allowing you to fund the full purchase price without contributing a cash deposit.

Can I get a bridging loan without a deposit if I have bad credit?

It may be possible, depending on the nature of the credit issues, the security available and the proposed repayment strategy. Lenders will assess each application individually.

Can I use a bridging loan without a deposit to buy a rental property?

Potentially, yes. Property investors may use specialist bridging finance to purchase rental properties, with the intention of refinancing onto a buy-to-let mortgage once the property meets the relevant criteria.

Does a no-deposit bridging loan cover legal fees and stamp duty?

Not automatically. Some lenders may allow certain costs to be included within the facility, subject to sufficient security and their lending criteria. You should establish the full cash requirement before proceeding.

Looking for a Bridging Loan Without a Deposit?

You may have more options than you think, particularly if you already own property or have identified a purchase with substantial equity built into the transaction.

Whether you’re buying an investment property, purchasing at auction or funding a refurbishment project, GPS Financial can help you understand what’s possible.

We’ll assess the purchase, the security available and your intended repayment strategy before exploring suitable lenders.

Call GPS Financial on 029 2267 7707 or contact our specialist bridging finance team to discuss your requirements.