How refurbishment finance works
A refurbishment loan is a bridging loan that pays for both buying a property and improving it. The lender advances part of the purchase price on completion, then releases money for the works in stages, usually in arrears: you or your builder pay for a stage, a surveyor checks it, and the lender reimburses it. Interest is charged only on money that has been drawn.
Light refurbishment covers works that do not need planning permission or structural change, such as new kitchens, bathrooms, rewiring or decoration. Heavy refurbishment includes structural work, extensions or conversions and often needs planning or building regulations approval. Heavy schemes usually mean higher rates, more surveyor visits and a closer look at your experience.
Typical UK refurbishment terms
Lenders publish rates per month. Recent UK refurbishment products start from around 0.69% to 0.93% a month, depending on the day-one loan-to-value and the size of the works. Many fund up to 100% of the works cost, released in arrears, with a day-one advance of up to about 75% of the property's current value.
The total loan is usually also capped at around 70% to 75% of the value after works, measured on the gross loan including rolled-up interest and fees. This calculator measures loan to GDV the same way, so you can see whether a longer works period or higher rate pushes the scheme over the limit.
Worked example: a six-month refurbishment
An investor buys a property for £400,000, plans £100,000 of works and expects it to be worth £600,000 afterwards. The lender advances 70% of the price on day one, £280,000, and funds 100% of the works in six equal monthly stages of £16,666.67. The total loan is £380,000, which is 76% of the £500,000 purchase and works cost.
At 0.85% a month, rolled up and compounded monthly, with a three-month sale period after the works, interest comes to £27,829.75. With a 2% arrangement fee of £7,600, the total cost of finance is £35,429.75 and £407,829.75 is repaid at exit, which is 68.0% of the value after works and within a 70% limit.
Profit after finance is £64,570.25, or 12.1% on cost. If the same interest were rolled up simply instead of compounded, interest would be £26,945.00.
What this calculator does not decide
This is a cost estimate for a quote you already have, not an approval. Lenders also assess the property, the schedule of works, your experience, your contingency and the exit. Works paid in arrears mean you need cash to fund each stage before it is reimbursed, and delays add interest.
A refurbishment loan on a property you or your family will live in can be a regulated mortgage with different rules. Investment and commercial refurbishment lending is usually unregulated. Read the facility letter and take independent advice.
For ground-up building or major conversions financed as a development, use the UK development finance calculator .
If you only need to buy before selling, without funding works, use the UK bridging finance calculator .
Bridging loan for renovation: when this calculator fits
If you are looking for a bridging loan for renovation, use this refurbishment calculator when the loan funds a purchase plus a schedule of works. It includes the initial advance, staged refurbishment funding, interest while works are drawn and the exit balance, rather than assuming that the whole facility is borrowed on day one.
Light renovation and heavy refurbishment can have different lender requirements. Enter the actual works funding, term, rate and fees from the quote. A personal home-improvement loan or long-term renovation mortgage is a different product and should not be compared using this staged bridging model.
Use the right country page
This page stays in pounds and uses UK refurbishment finance terms: a monthly rate, works funded in arrears, an arrangement fee and loan to GDV on the gross balance. The country choices above the inputs open separate local pages. Choosing United States opens the US fix and flip loan calculator, which uses an annual rate, origination points, Dutch or non-Dutch interest and loan to ARV. The inputs reset and amounts are not converted.
Inputs for the refurbishment loan calculator
Property purchase price
What you pay for the property, before Stamp Duty, legal fees and finance costs.
Refurbishment costs
All works, professional fees and a contingency, often 5% to 10% of the works.
Value after works (GDV)
The expected value once the works are finished, usually from the lender's valuation.
Purchase advance
The share of the purchase price lent on completion. You fund the rest of the price yourself.
Works funded
The share of works costs the lender releases. Many lenders fund 100%, paid in arrears after each stage is checked.
Quoted interest rate
The rate in your quote, not the APR. UK refurbishment loans are usually quoted per month.
Rate quoted per
Month for a monthly rate. Year (nominal) divides an annual rate by twelve.
Works period
Months over which works money is drawn. One stage is drawn at the start of each month.
Sale or refinance period
Months after the works when the full loan is still outstanding while you sell or refinance.
Draw pattern
Even stages, front-loaded or back-loaded. Full loan from day one charges interest on the whole facility from completion.
How interest is paid
Rolled up and repaid at exit, compound or simple, or paid monthly.
Arrangement fee
A percentage of the total loan, often 1% to 2%, paid at the start and not added to the loan here.
Exit fee
A percentage some lenders charge when you repay. Enter zero if there is none.
Exit fee based on
Whether the exit fee is a percentage of the total loan or of the value after works.
Other finance costs
Valuation, monitoring surveyor, legal and broker fees you pay separately.
Lender loan-to-cost limit
The highest loan as a share of the purchase price plus works.
Lender GDV limit
The highest loan to GDV the lender allows, compared here with the gross balance at exit.
CALCULATOR QUESTIONS
UK refurbishment loan calculator questions
Do refurbishment loans fund 100% of the works?
Many UK lenders fund up to 100% of the works cost, but usually in arrears, so you pay for each stage first and are reimbursed after a surveyor's check.
What is the difference between light and heavy refurbishment?
Light refurbishment needs no planning or structural work, such as kitchens, bathrooms and decoration. Heavy refurbishment includes structural changes, extensions or conversions and usually costs more to finance.
Why is the interest lower than the rate times the full loan?
Works money is drawn in stages, and each stage is charged only from the month it is drawn. Choose Full loan from day one if your lender charges the whole facility from completion.
Does this include Stamp Duty?
No. Add Stamp Duty and purchase costs to the price if you want them in loan to cost. Profit here is the value after works minus purchase, works and finance costs.
What happens when I change country?
The United States option opens the separate US fix and flip loan page, in dollars, with its own defaults and terms. Your inputs are reset rather than converted.
Can I use this for a bridging loan for renovation?
Yes, when renovation is funded by a short-term refurbishment bridge with staged works money. Enter its initial advance, works funding and interest terms. It is not a repayment calculator for personal home-improvement borrowing.