Bridge to term deal sheet: will the exit actually repay the bridge?
Most bridge to let deals are drawn without checking whether the term loan at the end will be big enough. A term lender sizes the loan twice, by value and by rental cover at a stressed rate, and takes the lower. This sheet does that before you draw the bridge, and tells you the rent and the value the exit needs.
By Dominic Whitecross, Co-Founder, HyLend. Last reviewed September 2026.
Get the template
Name and email, and the file is on its way. We use the email to send the link and, if you tick the box, occasional deal notes from the broking desk. Nothing else, and one click to stop.
What the template does
Enter the bridge: value, the net advance you need, rate, term and fee. The sheet grosses it up to the redemption figure. Enter the asset at exit: value after works and the rent a valuer would support. Enter the term lender's tests: maximum loan to value, the pay rate, the stress rate and the rental cover required. It sizes the term loan both ways, tells you which test binds, and states in words whether the term loan repays the bridge and by how much, or the shortfall you would fund from cash.
The worked example in the file
| Line | Example | What it shows |
|---|---|---|
| Net advance from the bridge | £350,000 | What you asked for |
| Gross bridge loan (redemption figure) | £390,103 | After 12 months retained at 0.69% and a 2% fee |
| Term loan by value (75% of £620,000) | £465,000 | The value test |
| Term loan by rental cover (£3,000 a month, 5.5% stress, 125%) | £523,636 | The cover test |
| Term loan available | £465,000 | The lower of the two |
| Repays the bridge? | Yes, £74,897 headroom | Equity released on refinance |
| Rent needed for cover to reach the redemption | £2,235 a month | Your margin of safety on rent |
Change the stress rate from 5.5% to 7.5%, as many two year fixed products are tested, and the cover test drops to £384,000 and no longer repays the bridge. Product choice is a loan size decision before it is a rate decision.
Why the stress rate is the whole game
On five year fixed rates many lenders stress at the pay rate. On shorter fixes they stress at the pay rate plus a margin or at a floor, whichever is higher. The same rent supports a materially larger loan on the longer fix, which is why the exit product should be chosen when the bridge is structured, not when it is expiring. Limited company buy to let remortgage: the two tests →
Scope
Rental cover and stress rates on the sheet are typical for limited company buy to let. We arrange buy to let for limited companies, SPVs and portfolio landlords. We do not arrange regulated consumer buy to let for individuals in their own name.
Bridge to Term Deal Sheet FAQs
What is a bridge to term or bridge to let structure?
A short bridging loan to buy, and often refurbish, a property that is not yet lettable or mortgageable, repaid by a term buy to let or commercial mortgage once the property is let and valued. The bridge is sized on the asset today; the term loan is sized on the finished, let asset. The structure only works if the second loan is large enough to repay the first, which is what this sheet tests.
How do lenders calculate rental cover?
Annual rent divided by the annual interest at a stressed rate must exceed a set ratio, commonly 125% for limited companies and 145% for higher rate individuals. Rearranged, the maximum loan by cover is annual rent divided by the stress rate times the ratio. The sheet does that arithmetic and shows the rent you would need for the cover test to reach the bridge redemption figure.
Why does a five year fix support a bigger loan than a two year fix?
Because many lenders stress five year fixed rates at the pay rate itself, while shorter fixes are stressed at the pay rate plus a margin or a floor of around 5.5% or more. Lower stress rate, larger loan for the same rent. On a bridge to let exit that difference is often the difference between repaying the bridge and a cash shortfall.
What if the term loan does not repay the bridge?
Three options, in order of cost. Fund the shortfall from cash on the refinance. Restructure the exit onto a product with a lower stress rate or a longer fix. Or revisit the deal before drawing the bridge, which is the point of running this sheet first. What does not work is discovering it in the last month of the bridge term.
Can I use this for a commercial property exit?
The value test works the same way. Commercial term lenders test income cover too, usually as debt service cover on the rent against the full payment rather than interest only, and at different ratios. Use the sheet for the shape of the answer and ask us for the specific lender's test.