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Could rising mortgage rates derail property investors’ bridging loan exits?

ended 07. September 2026

Coventry Building Society has announced increases across its fixed residential and buy-to-let mortgage range as swap rates and wholesale funding costs rise.

Bridging Loan Directory is examining whether changing term-mortgage pricing is already affecting property investors who intend to exit a bridging loan through refinancing.

We would like to hear from mortgage and bridging brokers, lenders, underwriters and property investors with recent first-hand experience.

  • Has a planned refinance become more expensive, required additional equity or become unavailable?
  • Are lenders stress-testing exits at higher rates or lower LTVs?
  • Have borrowers needed to extend their bridging loan, sell instead of refinance or find another exit?
  • Which borrowers or property types appear most exposed?
  • How early should the refinance exit be reviewed?

Recent anonymised examples are welcome. Please include the property type, approximate loan size, intended exit, what changed and how the issue was resolved.

Around 100–200 words by Monday at 2pm, please.

8 responses from the Newspage community

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Tony Sanchez
Founder at Bridging Loan Directory
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Evren Ergin
Founder And Developer at ValuQ
A bridging loan is only as safe as its exit, and rising rates put pressure on both of the usual exits at once. The refinance route tightens first. A higher mortgage rate means rental income has to stretch further to pass a lender's stress test, so the same property now supports a smaller loan. Investors who planned to refinance at a tight loan-to-value can find they need more equity, or cannot clear the bridge in full.

The sale route is no easier. Higher rates cool buyer demand, and demand is already weak: the RICS residential survey put new buyer enquiries at a net balance of minus 28% in July. Selling to exit therefore takes longer and may need a price reduction.

The most exposed are investors who borrowed at a high loan-to-value against a single, hard-to-value asset and left themselves one exit rather than two. A refinance exit should be reviewed well before the bridge matures, not as the deadline approaches.
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Adam Stiles
Managing Director at Helix Financial Partners
Bridging always requires a Plan A, B and C when it comes to exits.

Higher rates will always put pressure on leverage, however the BTL market is awash with options. Let's not forget that many lenders have lower rates but higher arrangement fees. Whilst this means the piper still needs paying, it does allow options for those with weaker rents and yields. It does however mean you may be praying for capital growth if you end up at a toppy LTV - you don't want to then be prisoner to one lender because the arrangement fee you added was too lumpy and put you in a dicey LTV position.

Bridging lenders are checking people's homework and have done so on an industrial scale since the Truss / Kwasi budget of October 2022. Ultimately borrowers need to be realistic with their exit strategy, and advisers need to be confident they can assist their clients.
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Jamie Elvin
Director at Strive Mortgages
Rising mortgage rates are putting renewed pressure on property investors who planned to exit bridging finance through a straightforward refinance. Even relatively modest increases in fixed-rate pricing can change affordability calculations, reduce the amount available at refinance and, in some cases, require borrowers to inject additional equity.

The key issue is whether an exit that looked viable when the bridging loan was arranged still works under today’s lending criteria and pricing. Brokers and borrowers should be reviewing refinance options well before the bridge reaches maturity, particularly where the original exit depended on a specific loan-to-value or rental stress calculation.

This does not necessarily mean refinancing will become unavailable, but it does make early planning increasingly important. Where the numbers no longer work, borrowers may need to consider alternative lenders, extending the bridge or ultimately selling the property, so identifying any potential shor
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Tracey Dixon
Buy-to-Let Mortgage Specialist & Owner at Pure Mortgage and Protection
Rising mortgage rates can derail a bridging exit, particularly where the planned refinance relies on high leverage or tight rental stress testing. Even if the property’s value and rent remain unchanged, higher rates can reduce the amount available from a term lender.

This may leave borrowers needing additional equity, a more expensive specialist product, an extension to the bridge or, in some cases, a sale. Refurbishment projects are particularly exposed where delays push the refinance into a different rate or criteria environment.

Exit plans should therefore be reviewed throughout the project, not just when the bridge is arranged.

A bridging exit is not a one-time calculation; it needs continual stress-testing.
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Iain Thompson
Director at Evolve Finance
Rising swap rates and the subsequent hike in BTL pricing will create a severe refinance bottleneck for bridging exits. The biggest exposure isn’t mortgage availability; it is the sudden failure of Interest Coverage Ratio (ICR) stress tests under newly inflated term rates.

We envisage seeing cases where an investor utilised short-term bridging capital to refurbish a property, expecting a smooth exit onto long-term debt. However, because lenders are stress-testing exits at higher margins, the achieved rental yield can no longer support the original loan size on paper.

To bridge this capital gap, landlords will inflate their projected asking rents simply to satisfy the underwriter's criteria. This refinance bottleneck doesn’t just trap investor capital—it directly drives up rental prices across the wider consumer market. It is why exit strategies must be holistically stress-tested at day one of the bridge.
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Mark Alexander
Founder at Property118.com
The refinance exit should be treated as part of the bridging decision, not something arranged when the refurbishment is nearly finished. Even a modest rise in term rates can weaken rental cover, reduce the available advance and create an unexpected equity gap. Highly geared borrowers are most exposed, so the exit should be stress-tested before taking the bridge and reviewed whenever rates, costs, rent or valuation assumptions change.
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Nouran Moustafa
Practice Principal & IFA at Roxton Wealth
A bridging exit can fail quietly when a higher refinance rate reduces the maximum loan under the lender’s interest cover calculation even if the rent, valuation and LTV remain unchanged.

Take a property producing £24,000 annual rent. At 125% ICR and a 5.5% stress rate, it supports around £349,000. At 6%, that falls to £320,000: a £29,000 equity gap created by 50 basis points.

The most exposed are highly leveraged investors, low yield properties and HMOs or conversions where licensing, planning, rental evidence or valuation methodology remains uncertain. Extending the bridge may buy time, but additional interest and fees can turn delay into damage.

The refinance should be stress-tested when the bridge is arranged, reviewed after works or cost changes, and revisited three to six months before expiry. Every case needs multiple refinancing routes and a credible sale fallback. If the exit works only at today’s cheapest rate and maximum LTV, it is not an exit strategy; it is hope.