Financing a Property Purchase at Auction

Property auctions can be a fantastic way to secure a quality residence at a bargain price. This guidance from Revolution Finance Brokers looks at the pros and cons and the best ways to confirm your purchase with effective financing.

  • Type of loan
  • help Maximum 75% LTV
  • help Maximum 70% LTV
  • help Maximum 70% LTV
  • help Maximum 65% LTV
  • help We will lend against current market value of the asset with vacant possession
  • £7,500,000
    help You cannot exceed the maximum loan available based on the maximum LTV for the corresponding type of property selected above
  • 75%
    help You cannot exceed the maximum LTV available for the corresponding type of property selected above
  • Loan details
  • 0
  • help Term should be entered in whole months, to a maximum of 12
  • help Deducted interest is where the forecast interest amount is deducted from the loan on day one.
  • help Serviced interest is where the interest is paid on a monthly basis. If serviced interest is chosen, evidence will be required to show your ability to pay interest when it is due.
  • Purpose of loan
  • Interest rate
  • help This is the standard rate for the property type chosen
  • help You can enter a custom rate below our standard rate for the calculation, but the availability of this rate is not guaranteed
Instant Results
Total security value ___
Gross loan amount ___
Gross LTV ___
Interest rate ___
Term (months) ___
Minimum term (months) ___
Assumed arrangement fee @ 2% (min £2,000) ___
Interest Retained ___
Monthly Serviced Interest ___
Admin fee ___
Indicative day 1 Net loan advance ___

Financing a Property Purchase at Auction

Property auctions need you to move quickly, and auction finance or a bridging loan can be the best option to put funds in place in time.

Here we'll run through how auction finance works, and what criteria a lender will assess.

For more information on bridge loans for property auctions, or to get an application started, contact Revolution on 0330 304 3040, or email the team at

What Sort of Loan is Auction Finance?

Auction finance is a type of bridge loan, secured to help you pay for a property sold at auction quickly. This lending is short-term, and interest-only, and is substantially faster to organise than a traditional mortgage.

Expedited bridge loans can be arranged in just a few days, and usually require only a valuation of the auction property to proceed.

Interest rates are higher than a mortgage, as you'd expect from a short-term loan, but can help you complete an auction purchase whereas a mortgage would have taken too long to arrange.

Is There a Specific Auction Finance Loan?

No, you can use your bridge finance for multiple purchases, but you'll need to specify during the application what the funds are for.

Auctions require you to pay a 10% deposit as soon as you have placed the winning bid, and you usually have 28 days to pay the balance - which isn't enough time to secure a standard mortgage.

If you fail to remit the balance, you could lose the 10% deposit, and the property will go to another investor.

Can I Buy a Property at Auction Before I Have My Loan Application Approved?

You can, but if the application falls through, or doesn't complete in time, you might lose your deposit.

It is advisable to have an agreement ready to go to make sure you can pay the balance within 28 days.

How Long are the Terms on a Bridging Loan for an Auction Purchase?

Bridge loans are typically only for up to one year.

You can get bridging finance for as long as 18 or even 24 months, with the maximum repayment period being three years.

What Interest Do I Pay on a Bridging Loan?

There are a few ways a lender could calculate the interest on your auction finance:

  • Monthly interest means that you need to pay the interest each month, and then repay the original loan value when the term ends.
  • Rolled up interest means that you don't pay the interest as you go, but that the charges are rolled up into the total debt, and you need to pay it back in one go.
  • Retained interest calculates what you will owe, and adds the monthly interest to the total balance payable. You pay back the complete balance, including capital and interest, at the end of the term.

How Much Deposit Do I Need for a Bridge Loan for an Auction?

Most bridge lenders offer Loan to Value ratios of up to 70% or 75%, so you'll need a deposit of 25% to 30%. If your application is considered risky, you might need a deposit as high as 50%.

There are 100% bridge loans out there, but you will need to offer additional security to be approved for an auction loan without a deposit.

Can I Purchase any Auction Property with a Bridging Loan?

Pretty much, yes. Bridge finance isn't as strict as a mortgage application, so you can usually buy anything from commercial premises to a residential investment and even properties ineligible for a typical mortgage.

  • Residential homes - you can use a bridge loan to buy a home to live in, and since it's a primary residence, you will need a regulated lender. The appeal of a bridging loan is that it takes much less time to organise. Once you own the property, you can take your time to remortgage and repay the bridging debt.
  • Commercial and mixed-use premises - bridge lenders will consider retail purchases, although some will have specific restrictions against financing higher risk premises such as petrol stations. Others will lend up to 50% or 60% of the purchase cost.
  • Uninhabitable properties - auction properties are often dilapidated buildings needing extensive renovation. Bridge finance is an excellent option since you cannot usually mortgage any property considered uninhabitable. You could apply for a bridge loan to cover the plot's cost, and the renovation works, and then sell the property or remortgage it to pay back the debt when the work is complete.

What Different Types of Auction Finance Lenders are There?

Business finance broker are experts in auction finance, and recognise that there are different types of broker and lender out there to be aware of:

  • Regulated brokers and lenders are governed by the Financial Conduct Authority rules, which means you have assurances about their conduct and professionalism.
  • Unregulated lenders can offer competitive deals on investments through bridge finance; provided the property isn't somewhere you intend to live as a private residence. For example, buy to lets or investment developments can be easily financed through an unregulated bridge loan.

What Application Criteria Will Help Me Get The Lowest Rates on Auction Finance?

The stronger your application, and the lower the risk to the lender, the better the interest rates you will be offered:

  • A viable exit strategy reduces the risk considerably. For example, if you plan to remortgage and have an agreement in principle, this represents a stable exit plan.
  • Having a good credit score is also a plus - although specialist bad credit lenders can usually help in any scenarios.
  • Development experience, if you're borrowing to buy and renovate a home, is also an advantage. That gives the lender confidence that you have the knowledge to complete the renovation and sell it profitably.
  • The size of your deposit is also essential, and although you can get action finance with a deposit as low as 25%, the higher the value, the better the interest rates.
  • Security is another vital factor, as the lender will need to offer security. Using a valuable property with plenty of equity that would be easy to sell will improve your chances or approval and reduce the risk factor.
Why Revolution Brokers?
  • Whole of market brokers

  • Mortgage that suits you

  • On time customer support


How does our broker-matching service work?

You can indeed. Companies can borrow a bridge loan through most auction finance lenders, and the terms are usually quite comparable. Lenders might require a personal guarantee from the directors to go ahead.

Yes, provided you have a good exit strategy, you can buy almost any property at auction.

There's no reason why not! Again, you need to show what your exit strategy is. Bridging loans can legally be used for any purpose.

If you're considering buying an auction property, or have already bid and need funding fast, a bridging loan is an ideal solution. Give Revolution a call on 0330 304 3040 or email the team at to get the application process started!

Latest Blogs

26 Jan 2022
How Does a Remortgage Application Work?

Most homeowners know that remortgaging means switching a mortgage from an existing lender over to a new deal. However, the process isn't always obvious. If you're on a fixed-rate deal, you'll want to get ahead of the end of the term to avoid being shuffled onto a higher standard variable rate where your interest costs will undoubtedly ..

17 Dec 2021
Understanding Lender Risk on First-Time Buyer Mortgages

Finding a great mortgage as a first time buyer can feel like an uphill struggle, with a larger proportion of applicants being turned down than a year ago. Around 20% of first-time mortgage applicants are rejected, usually because of the lender risk associated with their loan. Today, Revolution Brokers explains the highest risk facto..

28 Oct 2021
Pros and Cons of First Time Buyer Buy to Let Mortgages

Investing in a rental property can be an excellent way to get onto the property ladder and earn an income. However, if you haven't owned a residence before, you might find that a mainstream bank will automatically turn you down for a buy to let mortgage. In today's guide, the Revolution Brokers team explains how you can become a ren..

12 Oct 2021
Mortgage Deposit Requirements for First-Time Buyers

Buying a home for the first time is a massive step - but the deposit is often a stumbling block for first-time buyers. It can take years to save a sufficient amount or be impossible, so there are several ways to approach the problem and get your foot onto the property ladder. From April 2021, the UK government launched the new mortg..

24 Jun 2021
Why Property Auction Finance is Booming!

There is little doubt that UK buyer confidence is at an all-time high. We've recapped previously in our blogs how property market growth and prices have soared over the last few months! As we head into summer, one key area of mortgage finance seems to be expanding rapidly: property auction finance. In this article, the Revolution..

25 May 2021
Property Development vs Buy to Let Investments

Here at Revolution Brokers, we work with thousands of property investors every year. That might be to: Remortgage a portfolio of rental properties. Secure development finance for a new project. Finance a standalone property purchase or multiple acquisitions. Streamline portfolio mortgages for multiple investments. We ofte..


Refer, Relax and get £50

If you refer a friend for a mortgage or any
type of finance you’ll both receive £25
each when their new application
successfully completes.

Know More!

We are proud
members of the:

FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

Ask the Mortgage Experts

Revolution Brokers understands that mortgages can be complex and confusing!

Ask us any question you might have, and one of our skilled consultants will come back to you as quickly as possible.