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How to Get Short-term mortgages for property investors

Looking to get Short-term mortgages for property investors? Our mortgage advisors are here to help you secure the right product for your needs, whatever your circumstances.

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Buy to Sell Mortgages

While most people buy properties as long-term investments, the real estate business is huge and offers a variety of opportunities for short-term investors as well. For instance, some people might buy, renovate, and resell a house, all within a span of a few months.

For those types of real estate developers, common financing options like residential mortgages may not be a viable option. Luckily, however, a buy-to-sell mortgage might be the ideal kind for such an investment!

In this guide, we’ll walk you through everything you need to know about this kind of mortgage and how it works, so you can figure out whether it’s the right one for you.

As a special form of financing, not many people know much about buy-to-sell mortgages. To help you find out more about it, we’ve compiled a list of frequently asked questions that you may have regarding this financing option.

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What is a Buy-to-Sell Mortgage?

Buy-to-sell mortgage is a form of short-term home loan arrangement designed mainly for property developers and some types of real estate investors. 

This loan allows the investor to purchase a property (usually unfit for comfortable accommodation when it’s bought) in order to sell it shortly after for a profit when its market value increases.

The resale is typically within 12 months of the purchase but can extend to two years in some cases. This is different from a traditional mortgage where the main intention of the loan is to get a house that you’ll live in as a main residence.

The unique aspect regarding this type of mortgage is that it usually doesn’t take as long as a regular mortgage to arrange, as it usually takes a few weeks, compared to months in traditional mortgages and buy-to-let mortgages.

It also offers more flexibility when it comes to the amount you can borrow. But in return, the interest rates on this type of mortgage are usually higher as well.

Since a buy-to-sell mortgage is just a method to finance the purchase of a property as well as securing any funds necessary to renovate and sell at a profit, many people often call this type of mortgage a “bridging finance”.

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When Should I Consider a Buy-to-Sell Mortgage?

The short-term nature of buy-to-sell mortgages makes them a perfect choice for those seeking quicker financing for properties but who don’t have the money necessary to make a purchase. 

This makes this type of bridging finance perfect for several scenarios where timing is quite critical, such as the following:


House Flipping and Complete Home Renovation

House flipping is when someone buys a property, performs some renovations, and resells it for a profit. The renovations can be anything from simple do-ups to major or complete renovations.

Buy to sell mortgage is perfect for this purpose because it can provide home flippers with the necessary funds for both buying and renovating the house. 

This way, the investor will get a quicker return on their investment, which is essential for this type of strategy to keep the business running.


Houses Listed Below Market Value

Both real estate investors and developers need to keep their eyes open for any potential business opportunity that they might come across. 

Such an opportunity can come in the form of a property listed for a significantly lower price than its market value, which can happen for multiple reasons, such as auctioned houses where the completion timescale is limited to 28 days.

Many homeowners might also list their houses for a heavily discounted price when they need to sell them quickly. In that case, investors who don’t have enough capital to complete the purchase may opt for a buy-to-sell mortgage as a source of financing.


Properties with a High Potential to Increase in Value Within a Few Months

The real estate market is constantly changing. While it’s difficult to predict whether a property is going to increase in value, experienced investors can use different factors to forecast a property’s potential for appreciation, such as:

  • Properties near upcoming mega-projects
  • Properties where new schools, colleges, and transportation hubs are being built nearby
  • Properties in neighbourhoods experiencing gentrification

In that case, a buy-to-sell mortgage can be an excellent financing solution to secure those properties if the investor doesn’t have the necessary capital to purchase those properties right away.


Situations When Early Repay is Likely

It’s common for a traditional mortgage as well as a buy-to-let mortgage to include early repayment charges, which makes them a problematic hurdle for some investors.

On the other hand, bridging loans like a buy-to-sell mortgage are usually much more investor-friendly, as they typically offer remarkably lower repayment fees or even none at all.

This flexibility can be beneficial for investors who have a high probability to repay their loan early without incurring any financial penalty that might affect their profits.

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How Much Can You Borrow with a Buy-to-Sell Mortgage?

The amount of money you can borrow with a buy-to-sell mortgage is typically in line with other types of mortgage, such as residential mortgages. 

In other words, you should expect to get around 450% of your total annual earnings with a buy-to-sell mortgage. This means that if you earn around £50,000 per year, you could potentially borrow around £225,000.

Keep in mind that this doesn’t have to be your salary alone, as you can also include your partners. That being said, there are various factors that can play a significant role while determining how much you can borrow with a buy-to-sell mortgage. 

Besides your income, these may also include your lifestyle expenses, assets, credit history, value of the property in question, and much more.

What Is the Expected LTV for Buy-to-Sell Mortgage?

The loan-to-value ratio (LTV) will also vary from one lender to another. As a form of bridging loan, you should expect your maximum LTV to be in line with buy-to-let mortgages but still capped at a relatively lower sum when compared to a residential mortgage.

For instance, it’s common for a buy-to-sell mortgage to have a maximum LTV of 70% to 75%. Some lenders might accept 80% LTV or higher, especially if you have the right mortgage broker to facilitate your negotiations. 

However, finding a 90% to 100% LTV on a buy-to-sell mortgage is quite unlikely, although not impossible.

Frequently Asked Questions

What Are the Eligibility Criteria for a Buy-to-Sell Mortgage?

Before applying for a buy-to-sell mortgage, you’ll need to make sure that you meet the eligibility requirements. 

Of course, these criteria might vary from one lender to another but they’re usually similar to the eligibility aspects for traditional mortgages with slight distinctions. Here’s a quick look at the key criteria to keep in mind before applying:

Exit Strategy

In financing, the exit strategy is a backup strategy that gives the borrower an “exit” in case of facing financial difficulties while repaying the mortgage.

While it’s always a great addition to a mortgage plan, it’s an essential eligibility criterion in the case of a buy-to-sell mortgage. This is because the lender puts little emphasis on aspects like your income or projected rental income, which are essential for residential mortgages.

For such a short-term investment, your exit strategy usually involves selling the property at a profit once you complete your renovations.


Like other forms of mortgage, your deposit will have a major impact on your application acceptance rate.

The higher the deposit you’re willing to put down for the purchase, the more likely for lenders to accept your application. 

Since the typical LTV here is around 70 to 75%, the minimum deposit for this type of mortgage is usually around 25% to 30%. However, this is highly dependent on the terms and conditions set by the lender you opt for.

Of course, paying a larger deposit for the property upfront can be a little frustrating for an investor, especially if you need the extra funds for flipping. 

However, if you can’t pay your loan back, the lender will usually end up with a partially-renovated value that they can’t sell right away, which is why lenders often require higher deposits for a buy-to-sell mortgage.

Loan Period

As previously established, buy-to-sell mortgages are meant to be short-term loans, which are usually around 1 year or shorter. Some lenders might accept a mortgage term of up to 2 or 3 years, but that will limit your lender options significantly.

Lenders are always looking forward to getting repaid quickly in buy-to-sell mortgages. However, they will only accept your application if they’re sure you’re going to pay them back within the loan period. 

That’s why proposing a loan term that’s too short or too long (compared to your house flipping project), might lower your eligibility for the loan.

Credit Score

Although your credit score doesn’t have as much of an impact on this type of mortgage as traditional ones, it’s still quite essential. 

In fact, since a buy-to-sell mortgage can be a form of second property mortgage, you may find it quite difficult to secure a loan if you have a poor credit history.

What Are the Interest Rates for Buy-to-Sell Mortgages?

The interest rate for a buy-to-sell mortgage can vary significantly from one lender to another. However, the main catch here is that it’s relatively high when compared to residential mortgages, which is an expected tradeoff.

You should also know that many factors can end up affecting the interest rate for a buy-to-sell mortgage, such as:

  • The terms set by the lender you opt for
  • The type of property you want to buy
  • Your income and credit status (history and score)
  • The value of the property you’re getting the loan for

Buy-to-Sell mortgages come with various benefits that make them stand out as a prime financing solution for many looking towards short-term loans for property investment, but it’s also not always perfect. Here’s a quick look at some of its top advantages and drawbacks:


  • You’ll access the money you need in a matter of days instead of months
  • More flexible in terms of conditions and requirements when compared to a traditional mortgage, especially for investors and flippers
  • Doesn’t rely heavily on credit history and score like other types of mortgage


  • Relatively higher interest rate
  • Requires larger deposit and LTV is usually capped at around 75%

If you find buy-to-sell mortgage the right financing solution for you, here’s a brief guide that shows you how to apply for one 

1. Find the Property and Do Your Research

Since a buy-to-sell mortgage is ideal for specific types of properties, you’ll need to check the market in order to find a property suitable for this type of financing.

This mainly includes houses with a large potential to make you a profit upon selling, such as partially renovated houses, or properties appreciating in value quickly.

2. Prepare All the Necessary Documents

After finding the right property, you’ll also need to get your paperwork in order. The exact documents you will need to present will vary from one lender to another. Yet, many of them usually require the following items:

  • Proof of identity, address, and income
  • Bank statements for the last few months
  • A copy of your credit report, including your credit score and history
  • Any documents related to previous loans you’ve acquired and proof of repayment

3. Use a Broker Who Specialises in Buy-to-Sell Mortgages

Although you can apply for a buy-to-sell mortgage on your own, having the right expertise by your side. A specialised buy-to-sell mortgage broker will give you easier access to tons of information regarding different lender options. 

A broker can also help you pick the right solution based on your current situation as well as outline a perfect exit strategy for you to increase your mortgage application approval rate luckily, When the Bank Says No offers a team of expert brokers and advisors to help you with that!

4. Apply for a Mortgage

After using your broker to scour through the different specialist lenders and what they have to offer, all you need to do is apply for a mortgage with the help of your broker. Luckily, this step should be fairly quicker, which is a main advantage of buy-to-sell mortgages.

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