What is a self-build bridging loan?

A self-build bridging loan is a type of loan that is designed to help individuals or companies who are looking to construct a property but do not have the necessary funds to complete the project. It is essentially a short-term loan that can be used to cover the costs associated with building a property. In this article, we will explore self-build bridging loans in more detail, including how they work, the benefits and drawbacks of using them, and how to apply for one.

How self-build bridging loans work

Self-build bridging loans work in a similar way to other types of bridging loans. They are typically short-term loans, usually lasting between 12 and 24 months, which are secured against the property being built. This means that the loan provider has a legal charge over the property until the loan is repaid in full.

The loan is usually paid out in stages or drawdowns, with the borrower receiving funds as each stage of the construction is completed. This is known as stage payments, and it is a key feature of self-build bridging loans. The borrower will typically need to provide evidence that each stage has been completed before the next payment is released, generally via a site visit or a building control sign-off.

What are the benefits of using self-build bridging loans?

There are several benefits to using a self-build bridging loan. The most obvious benefit is that it provides the funds needed to complete a construction project. This is particularly useful for individuals or companies who do not have the necessary funds upfront, but who are confident that they can complete the project within a short timeframe.

Another benefit of using a self-build bridging loan is that it can be a flexible form of finance. Unlike traditional mortgages, which are typically fixed-term loans with set repayment schedules, self-build bridging loans can be tailored to suit the borrower's individual needs. This means that borrowers can choose the repayment schedule that works best for them. When you are building a property for yourself you are in control of the costs such as materials and labour.

What are the drawbacks of using self-build bridging loans?

There is a higher risk involved with self-build bridging loans. This is because the loan is secured against the property being built, which means that if the borrower is unable to complete the project, theuld lose their investment.

It is important to carefully consider the risks involved before applying for a self-build bridging loan.

How do I apply for a self-build bridging loan?

If you are considering applying for a self-build bridging loan, there are several steps that you will need to take. Firstly, you will need to find a lender who offers self-build bridging loans. This can be done by researching online or speaking to a financial advisor.

Once you have found a lender, you will need to provide them with details of your construction project, including the development appraisal, schedule of works, and any other relevant information. The lender will then assess your application and decide whether or not to approve the loan.

If the loan is approved, you will need to sign a legal agreement with the lender, which will outline the terms and conditions of the loan. You will also need to provide evidence of the progress of the construction project in order to receive the stage payments.

Are you looking to build your next property? Our sister partners could help you finance it. Call our freephone number above to talk with one of our experts today.

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Our flexible approach


We are proud to be a lender who can deliver loans at a fast approach, to consumers. We make this possible by carrying out our own legal checks, in house for loans under 100k, within hours. We can offer automated valuations, which are available to produce financial solutions in an instant.

Mercantile Trust regularly help their customers carry out renovations with heavy refurbishment loans, by providing finance fast.

No minimum income

At Mercantile Trust, we put our customers at the forefront of what we do.

We offer top slicing, where we can use your personal income when carrying out affordability calculations. If your rental income does not cover your mortgage repayments, we will top up the remaining amount that you cannot cover so you are able to get the loan you require.

No Exit Fees

We want you to be in control of your finance.
With no early repayment or exit fees, Mercantile Trust will strive to find a loan to meet your financial requirements.

Our bridging loan criteria

We aim to help absolutely everyone, however there are certain criteria that must be met in order to make a successful application:

  • Unregulated bridging applications only
  • Rates from 0.99%
  • Up to 75% loan to value
  • Most property constructions accepted
  • No personal income requirement
  • No exit fees
  • Minimum property value £75k
  • Minimum advance £25k max £500k
  • Confirmation of exit required
  • Minimum of one buy to let or residential property required
  • Serviced and rolled interest available
  • No ERC (Early Repayment Charge)
  • First and second charge available