Bridge to Let Calculator
Model bridge-to-let exit strategies. Calculate capital recycling, refinance options, and cash-on-cash returns when transitioning from bridge to BTL mortgage.
Property Details
Enter purchase, target values, and expected rental income
Value-Add Strategy Tips:
- • Aim to add 20-30% value through refurbishment
- • Target rent that achieves 145%+ ICR for lending
- • If current value = purchase price, leave it the same
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About the Bridge to Let Calculator
What it does and how it helps you
The Bridge to Let Calculator helps UK property investors model bridge-to-let exit strategies. Calculate capital recycling, refinance options, and ongoing cashflow when transitioning from bridging finance to a buy-to-let mortgage after refurbishment.
How It Works
Understanding the calculation method
Understanding Bridge to Let Strategy
Bridge to let is a two-phase financing strategy designed to maximise capital efficiency in property investment. Rather than using cash or a standard mortgage to purchase and hold, you use short-term bridging finance during the value-add phase, then refinance onto a long-term BTL mortgage.
How This Calculator Works
Our Bridge to Let Calculator models both phases of the strategy:
Phase 1: Bridging Finance Enter your purchase price, current market value (for LTV calculation), refurbishment budget, and target post-works value. The calculator models your bridging loan at your chosen LTV, calculates all fees and interest over the refurb period, and shows your total bridging costs.
Phase 2: BTL Refinance Configure your BTL exit: the LTV available against the improved value, interest rate, and lender fees. The calculator checks ICR compliance against your expected rent and chosen stress test percentage.
Capital Recycling Analysis The key output: how much of your original investment comes back on refinance. If the BTL mortgage is larger than the bridge loan you repay (because value has increased), you release cash. The calculator shows: - Total investment: deposit + refurb + all finance costs - Cash released: BTL advance minus bridge repayment - Money left in deal: what remains invested after refinance - Capital recycled: percentage of investment returned
Why Capital Recycling Matters
Traditional buy-to-hold locks your capital in the property. With bridge to let:
Scenario A - Traditional: Buy for £250k cash, refurb £30k, now have £280k tied up generating rental income.
Scenario B - Bridge to Let: Buy for £250k (75% bridge = £62.5k deposit), refurb £30k, total invested ~£100k. Refinance at £300k (75% BTL = £225k advance). Repay bridge, release cash. Money left in deal: £25-50k.
Result: Instead of £280k locked in one property, you have £50k invested and £230k+ returned to buy the next one. Same rental income, same property ownership, but capital working harder.
ICR and Stress Testing
BTL lenders require rental income to exceed mortgage interest by a margin (Interest Coverage Ratio or ICR). Currently most lenders require 125-145% ICR.
Example: £225k BTL at 5.5% = £12,375 annual interest. At 145% ICR, you need £17,944 annual rent (£1,495/month).
The calculator checks if your expected rent passes the ICR test at your chosen stress percentage. If not, you may need to: - Accept lower LTV (less capital recycled) - Achieve higher rent - Find a lender with lower ICR requirement
Typical Bridge to Let Timeline
Month 1: Purchase with bridging finance Months 2-6: Complete refurbishment works Month 6-7: Get property revalued and let Month 7-9: Apply for BTL mortgage Month 9-12: Complete refinance, release capital
Total bridge period: 9-12 months typically
When Bridge to Let Works Best
This strategy excels when you can: - Buy below market value (more equity to release) - Add significant value through refurbishment - Achieve strong rental yields (pass ICR tests) - Execute quickly (minimise bridging costs) - Access competitive refinance rates
The maths work less well when: - Purchase is at full market value - Limited scope for value uplift - Weak rental market (low ICR) - Extended refurb timeline - High bridging rates or fees
When to use this calculator
Use this calculator when planning value-add property investments where you intend to hold as a rental. It's ideal for properties requiring refurbishment where you want to refinance onto a long-term BTL mortgage rather than selling. Essential for understanding if the refinance will release enough capital and if the rent covers the mortgage at stress-tested ICR levels.
Frequently Asked Questions
Common questions about this calculator