How much deposit a bridging loan really takes.
The headline is 25%. The cash you actually need is usually more, because retained interest sits inside the gross loan and the lender sizes against its valuation rather than your price. Here is the real arithmetic, and the two routes to a zero cash deposit.
By Dominic Whitecross, Co-Founder, HyLend. Last reviewed September 2026.
The short answer
Most bridging lenders lend up to 75% loan to value on first charge residential and semi commercial security, which implies a 25% deposit. Commercial property and land sit at 60% to 70%, so 30% to 40%. Second charge bridging sits lower again.
That is the headline. Two things make the cash figure different from the headline, and both catch borrowers who have not modelled the deal properly.
Gross loan, net advance, and why your deposit is bigger than you think
Bridging interest is usually retained: the interest for the full term is deducted from the loan up front, so you make no monthly payments. The lender arrangement fee is usually added to the loan too. Both sit inside the gross loan, and the 75% LTV cap applies to the gross figure.
| £500,000 purchase, 12 months, retained interest at 0.69% pm | Figure |
|---|---|
| Gross loan at 75% LTV | £375,000 |
| Less arrangement fee (2%) | £7,500 |
| Less retained interest (12 months) | £31,050 |
| Net advance to your solicitor | about £336,000 |
| Cash you need to complete | about £164,000, not £125,000 |
The difference is not a fee and it is not a trick. It is the cost of borrowing being paid in advance out of the loan. It is simply invisible on a term sheet that quotes a gross LTV, which is most of them. Model gross and net side by side on the calculator →
Which value the lender lends against
The lender applies its percentage to its own valuation, and on commercial or unusual security that may be a 90 or 180 day figure sitting 10% to 25% below market value. On mainstream residential it is usually market value, but on a purchase most lenders also lend against the lower of price and valuation for the first six months, so a good deal does not automatically shrink your deposit. How valuations decide your loan →
Two routes to a zero cash deposit
- Additional security. If you own another property with enough equity, the lender takes a charge over it alongside the purchase and can fund 100% of the price. Your deposit is the equity in the other asset rather than cash. This is routine in bridging and often the reason a bridge is chosen over a term facility.
- A genuine below market value purchase. Where the valuer supports an open market value materially above your price, some lenders will lend against the value rather than the price, and the discount does the work of the deposit. The lender pool for this is smaller and the basis of value is everything. 100% bridging on below market value deals →
Auction purchases have a third number
The auction house wants 10% on the day and the balance in 28 days. The lender funds the balance, so your cash is the auction deposit plus whatever the leverage leaves uncovered. Establish the lender advance before you bid, because the hammer commits you either way.
See the net advance on your own numbers
The refurbishment bridge appraisal shows the gap between gross loan and net advance in one cell.
- Refurbishment bridge appraisal free, unlocked, live formulas.
Bridging loan deposit FAQs
How much deposit do you need for a bridging loan?
Typically 25% of the property value, because most bridging lenders lend up to 75% loan to value on first charge residential and semi commercial security. Commercial and land security need 30% to 40%. Two things move the real cash figure: retained interest, which is added to the loan and pushes the gross figure up, and the valuation basis, because the lender applies its percentage to its valuation rather than to your price.
Can I get a bridging loan with no deposit?
Yes, in two situations. If you own another property with enough equity, a lender can take a charge over it as additional security and fund 100% of the purchase price. And on a genuine below market value purchase, some lenders will lend against the open market value rather than the price, so the discount funds the deposit. Both routes narrow the lender pool and the second depends entirely on the valuer supporting the market value.
Why is my deposit bigger than 25% when the LTV is 75%?
Because the 75% is a gross loan to value, and on a retained interest bridge the gross loan includes the interest for the whole term and the arrangement fee. The net advance that reaches your solicitor is smaller. On a £500,000 purchase at 0.69% a month for 12 months, a 75% gross loan of £375,000 delivers roughly £335,000 net, so the cash you need is nearer £165,000 than £125,000. Always model the net advance, not the headline.
Does the deposit have to be cash?
No. It has to be equity. Cash is simplest, but equity in another property offered as additional security is the standard alternative in bridging and often the whole point of using it. A lender will want to see where the cash came from if it is cash, and will not accept undisclosed borrowed funds presented as a deposit.
Is the deposit different on an auction purchase?
The lender treats it the same way, but the auction house does not. You pay 10% on the day plus a buyer administration fee, and the balance within 28 days. The bridging loan funds the balance, so your total cash is the auction deposit plus whatever the lender leverage leaves uncovered plus fees. Lenders also lend against the lower of price and valuation for the first six months of ownership, so a bargain does not automatically reduce your deposit.
What fees do I need on top of the deposit?
The valuation fee up front and non refundable, both sides legal costs, the lender arrangement fee which is usually added to the loan rather than paid in cash, and any broker fee. Because most bridging fees are capitalised into the gross loan, the cash you need day one is mainly the deposit, the valuation and your own solicitor.