# Bridging Finance LTV Guide Source: https://www.cashbookfinance.co.uk/insights/bridging-finance-ltv-guide Last updated: 2026-10-26 Author: Bjorn Laku, Director & Chief Marketing Officer (https://www.bjornlaku.com/) Publisher: Cashbook Finance Limited > Understand loan-to-value in bridging finance, including valuation, gross and net loan amounts, rolled-up interest, fees and why headroom matters. FCA-registered UK lender FRN 782472 ## Bridging finance LTV: how the numbers fit together. Loan-to-value (LTV) is the loan as a percentage of the property's value. It is a relationship, not a headline limit. Usable leverage depends on value, fees, [retained interest](https://www.cashbookfinance.co.uk/insights/bridging-finance-glossary#term-retained-interest) and valuation headroom. Written and reviewed by [Bjorn Laku](https://www.cashbookfinance.co.uk/bjorn-laku), Director & CMO. Business bridging only: Cashbook Finance does not offer regulated bridging loans secured on a home the borrower or a close family member lives in. LTV · Property → short-term capital Illustration Bridging structure check A £325,000 loan against a £500,000 property Within reference **65%** loan-to-value, against a 70% illustrative reference point - **Equity remaining** £175,000 - **Headroom to 70% LTV** £25,000 Estimated property value · £500,000 Requested gross loan · £325,000 Within a 70% illustrative LTV reference point. **Security risk:** Your property may be repossessed if you do not keep up repayments on a loan secured against it. Check eligibility · Costs and exit **£30m+** funded · **100+** UK businesses since 2019 · London SE1 - FCA **782472** - ICO **ZB545200** - Companies House **10723098** ### The three numbers to separate before requesting terms. A clean [LTV](https://www.cashbookfinance.co.uk/insights/bridging-finance-glossary#term-loan-to-value-ltv) discussion distinguishes value, gross debt and cash released. Blurring them produces false comparisons. Valuation basis #### Start with the lender’s valuation The relevant value may differ from the purchase price, estate-agent estimate or development appraisal. Structure against the value the lender can rely on. Facility mechanics #### Separate gross loan from net cash The gross facility can include retained interest and agreed costs. Net proceeds are what the borrower actually receives after deductions and redemptions. Risk margin #### Leave headroom for movement A deal that only works at the most optimistic value has no resilience. Allow room for valuation changes, interest accrual and completion costs. Check eligibility · About 2–3 minutes, no credit search. ### Test the structure before the deadline tests you. Compare the gross facility, deductions, net cash and estimated redemption under the same assumptions. ### A lower headline LTV can still release less cash than expected. Two facilities quoting the same percentage can produce different net proceeds because fees, retained interest, existing secured debt and legal costs are treated differently. Compare the cash available at completion and the repayment amount at exit, not the percentage in isolation. The valuation date, property condition, tenure, location, planning position and intended use can all affect the value used. A sensible structure also leaves enough time and equity for the exit to work if the transaction takes longer than planned. - Ask for [gross loan](https://www.cashbookfinance.co.uk/insights/bridging-finance-glossary#term-gross-loan), deductions, net proceeds and estimated redemption separately. - Stress-test the numbers at a lower valuation and a later exit date. - Treat a reference LTV as illustrative until valuation and underwriting are complete. Which suits you ### Which LTV figure to use when. | Your situation | Usually the better fit | Why | | --- | --- | --- | | Comparing quotes | Net cash released and repayment at exit | Fees and retained interest differ between lenders | | Checking you can complete | Cash released against the price and costs | Shows the equity you must add | | Testing resilience | Gross LTV at a 10% lower valuation | Valuations can move before completion | | Planning the exit | Redemption figure against the sale or refinance | The exit must repay loan and interest | Worked example Check eligibility · About 2–3 minutes, no credit search. ### Gross loan against the cash you receive. A £350,000 gross bridge against a £500,000 property (70% gross LTV), with nine months of interest retained in the loan. A 70% gross LTV releases 63% of the value in cash once the fee and retained interest are taken out. Check eligibility · Talk it through with a director | Property value | £500,000 | | --- | --- | | Gross loan (70% gross LTV) | £350,000 | | Less arrangement fee, 1% | −£3,500 | | Less 9 months’ interest retained at 1% a month | −£31,500 | | Cash released at completion | £315,000 | | Net LTV (cash released ÷ value) | 63% | | Repaid at exit | £350,000 | Illustrative: interest at 1% a month, rolled up, and an arrangement fee of 1% of the loan. Valuation and legal costs are extra and quoted per case. Bridging finance is secured against property, which may be repossessed if repayments are not maintained. ### Bridging LTV: use the comparison to make a funding decision. Gross LTV does not tell the borrower how much cash will be available at completion. #### Gross LTV Gross loan divided by the relevant property value. #### Net LTV Usable proceeds after retained interest, fees and costs, divided by value. #### Valuation basis Current value, purchase price or another agreed basis may constrain the calculation. Examples are educational only. Eligibility, pricing, security and final terms always depend on a formal assessment of your business, your documents and the facility proposed. **Related guidance:** [Bridging finance](https://www.cashbookfinance.co.uk/bridging-finance) · [Pricing & decisions](https://www.cashbookfinance.co.uk/pricing-decisions) · [Eligibility](https://www.cashbookfinance.co.uk/eligibility) · [Case studies](https://www.cashbookfinance.co.uk/case-studies) Quick answers ### Common questions. Check eligibility · All questions **Is gross LTV or net LTV more important?** Both: gross LTV sets the lender’s risk, and net LTV tells you the cash you actually receive. Compare quotes on cash released and the amount repaid at exit. **What is retained interest?** Interest for part or all of the term held back from the loan at completion, so no monthly payments are due. It reduces the cash you receive. **Does a lower LTV mean a cheaper loan?** Often the pricing improves at lower LTVs, but fees and the term matter as much. Compare the full cost. **Which value is used?** The lender’s valuation, which can differ from the price you agreed. Can’t see your question? Talk it through with a director ### A practical note from the lender. **Bjorn Laku: commercial judgement** Bridging delays usually come from unclear security, weak exit evidence or legal details that should have been surfaced before the deadline became urgent. ### More guides on bridging finance - [Bridging for limited companies and SPVs](https://www.cashbookfinance.co.uk/insights/bridging-loans-limited-companies-spvs) - [Refurbishment bridging finance](https://www.cashbookfinance.co.uk/insights/refurbishment-bridging-finance) - [VAT bridging loans](https://www.cashbookfinance.co.uk/insights/vat-bridging-loans) - [Auction bridging finance](https://www.cashbookfinance.co.uk/insights/auction-bridging-finance) - [What slows down bridging completion](https://www.cashbookfinance.co.uk/insights/what-slows-down-bridging-completion) - [Bridging loans in London](https://www.cashbookfinance.co.uk/bridging-loans-london) --- Cashbook Finance. Cashbook Finance Limited is registered with the Financial Conduct Authority under Firm Reference Number 782472. Company number 10723098. Registered office: Cumberland House, 24–28 Baxter Avenue, Southend-on-Sea, Essex SS2 6HZ. Registered with the Information Commissioner’s Office under reference ZB545200. All finance is subject to eligibility, satisfactory due diligence, credit approval and agreed terms. Invoice finance, trade finance and bridging finance may not be suitable for every business. The availability, structure, amount, pricing, fees, security requirements and completion timescales of any facility will depend on the applicant’s circumstances, the quality of the supporting evidence provided and our assessment of the proposed transaction. Any figures, examples, rates or timescales shown on this website are for illustrative purposes only and do not constitute an offer, commitment or guarantee of finance. Terms and conditions apply. Bridging finance is secured against property. Your property may be repossessed if you do not maintain repayments on a loan secured against it. Applicants should obtain independent legal, financial and tax advice where appropriate.