Remortgaging a commercial property is a popular option for those looking to cut costs and improve their profit margin, but timing can be everything so it’s important to weigh up your options, one of which is a bridging loan for remortgage.
What Is a Remortgage?
Simply put, a remortgage is when you replace your existing commercial mortgage with a new mortgage, either from the same lender or a new one.
Why do people do this exactly?
The reason is rather straightforward. The aim is usually to access more favourable terms from another mortgage, most predominantly, lower interest rates, longer repayment periods, or more flexible borrowing.
For commercial property owners specifically, this can be a strategic move to strengthen the income from the property and invest in further assets.
However, while it is a good idea, the remortgaging process is not quick and easy. Due diligence, property valuations, and lender approval can take months to complete, particularly for complex commercial assets.
This is where bridging finance becomes invaluable, as by offering a short-term loan secured against your property, a bridging lender can provide the necessary funds immediately while your commercial remortgage progresses in the background.
Once the remortgage completes, the bridging loan can be repaid in full.
For more details on the remortgaging process itself, see our dedicated page on Commercial Property Remortgage.
How Does a Bridging Loan Work When Remortgaging a Commercial Property?
A bridging loan for remortgaging acts as a financial bridge between these two funding events, more specifically in this case, your existing commercial loan and the completion of a new remortgage.
Typically, the loan is secured against the property itself that is being remortgaged and can be approved and funded within days, rather than the longer periods of time required for traditional mortgages.
Bridging loans are also beneficial when additional capital is required mid-process, for instance, to fund property improvements before a valuation.
By using a bridge to enhance the property’s condition or rental amount, borrowers are able to often achieve a higher remortgage value, improving the overall financial income.
“Can Remortgaging Save Me Money?”
Remortgaging a commercial property can deliver significant savings and financial advantages when done the right way.
By moving to a lender offering lower interest rates or more suitable terms for your investment goals, you are able to reduce monthly repayments and work towards a more profitable future.
Many commercial borrowers use remortgaging to release equity, turning a property’s increased value into a source of cash flow for other ventures.
Something that shouldn’t go overlooked however is timing, as it is crucial to avoid a delay that could mean paying unnecessary interest on an old commercial property or missing opportunities for reinvestment.
Bridging loans help you avoid these instances by providing short-term capital with speed, ensuring that your investment timelines are not disturbed.
Something else that can save you money in terms of bridging finance is the way in which it can strengthen your negotiating position with new lenders.
How? By obtaining immediate access to funds and thus, reducing the urgency to accept unfavourable offers. This allows time for thorough due diligence and better long-term terms.
Ultimately, the pairing of both reliable bridging finance and strategic remortgage can offer both flexibility and a more positive financial benefit.
Bridging Loan Providers for Commercial Property Remortgage
Selecting the right bridging loan provider is crucial in ensuring that your remortgage plans run as planned.
A specialist lender that operates in this market day in day out, like our team at MS Lending Group understands the commercial property market, balancing efficiency with sensible lending criteria that you can rely on.
Unlike traditional banks, reliable bridging lenders focus on the value of the asset itself, in this case, the commercial property, and the strength of the exit strategy, rather than just income or credit profile.
If you’re looking for a reputable lender, talk to our team at MS Lending Group today for more information on how we can offer a bridging loan for remortgage and a solution to cutting costs and increasing profits.
What People Want to Know…
Can I use a bridging loan to cover short-term costs while waiting for a commercial remortgage to complete?
Yes. This is precisely what bridging loans are designed to do. Bridging loan providers offer short-term funding while a longer-term financial solution is arranged, such as a remortgage, is being finalised.
In many commercial transactions, delays in valuation reports, legal checks, or lender approvals can create a lengthy gap between the expiry of one loan and the start of another.
Bridging finance steps in to cover this period, ensuring you have the funds required to maintain your investment goals.
For instance, if your current commercial mortgage term has ended and your new lender is still processing the remortgage, a bridging loan can repay the existing lender immediately.
It can also be used to pay contractors, cover legal fees, or complete essential property works that must be finished before the new lender releases funds.
Because bridging loans are asset-backed and typically fast-tracked, approval and drawdown can occur within days, making them ideal for borrowers needing funding without long application processes.
What interest rates and fees should I expect with a bridging loan for a commercial remortgage?
Interest rates for bridging loans are generally higher than standard commercial mortgage rates because they are designed as short-term facilities, yet they’re dependent on factors such as loan-to-value (LTV), asset type, borrower profile, and exit strategy.
However, since the duration is usually brief, the overall cost can be highly competitive compared to the risks of delays, lost opportunities, or penalty fees associated with missed repayments.
Some lenders may also charge exit fees, though many, including MS Lending Group, offer flexible repayment structures without early repayment penalties, allowing you to settle as soon as your remortgage completes.
The key advantage lies in speed and certainty, as a bridging loan ensures that your remortgage process stays on schedule, your investments remain protected, and your financial plans proceed without interruption.
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