Property Auction Finance

Introduction

Auction finance is built for speed when the hammer falls.

Auction property purchases come with hard deadlines that traditional mortgages simply can’t meet.

Typically a form of bridging, auction finance lets you secure the property first, then refinance or sell when the dust settles.

Compare auction finance below.

How it works

Step 1

Compare

Lift the lid on the latest rates and receive your personalised results in your inbox.

Step 2

Optimise

Our free Optimiser gets lenders competing for your business and guarantees a bespoke quote within 1 day!

Step 3

Apply

Time to get your deal done with the help of our property experts.

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Auction Finance

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I had such a positive experience working with Abbie, Keira and Jordan. They managed to get my bridging loan application approved and funds released in just 4 days, which honestly made all the difference as I was completing on an auction property. They were incredibly responsive throughout — always quick to reply, keeping me updated, and making what has been a hectic process feel much more calm and manageable. What I appreciated most was how genuinely helpful they were, taking the time to guide me through each step and making sure I felt confident along the way. I’m really grateful for their support and wouldn’t hesitate to recommend them to anyone needing fast and reliable bridging finance!

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What is auction finance?

Buying a property at auction? You need finance that can keep up.

Auction finance is a short-term funding solution used to help buyers complete property purchases within tight auction deadlines.

It's often a form of bridging finance, secured against the property you're buying.

The idea is simple:

Buy the property → complete quickly → refinance or sell → repay the loan.

Auction finance can be particularly useful for properties that need refurbishment or don't meet standard mortgage criteria.

Speed is the big one. Once the hammer falls, you're legally committed to the purchase and usually have a limited window to complete.

Why use auction finance?

Because sometimes a normal mortgage just isn't fast enough.

Auction purchases typically come with strict completion deadlines, often around 28 days.

A traditional mortgage can take longer than that, particularly if the property needs significant work.

Auction finance can help you:

  • Complete within the auction deadline

  • Buy properties that need refurbishment

  • Keep more of your own cash available

  • Move quickly when an opportunity comes up

It can also provide more flexibility than a traditional mortgage when the property isn't currently in a mortgageable condition.

Our deal optimiser service will help negotiate interest rates and terms with potential lenders. The rates shown on our site are the indicative rate ranges that auction finance lenders give out. However, we are able to work with investors to professionally present their project to lenders with the aim of negotiating the best possible deal.

Row of properties on road Curved row of terraced houses on a main roadway with a bus shelter infront.

Can you get a mortgage on an auction property?

Yes — but it depends on the property.

If the property is in good condition and meets standard lending criteria, a traditional mortgage may be possible.

The problem comes when the property needs significant work.

Structural changes, planning requirements, missing kitchens or bathrooms and other issues can affect whether a mainstream lender will lend.

That's where auction finance or bridging finance can become useful.

Once the property has been improved, you may then be able to refinance onto a longer-term mortgage.

The important thing is to understand what the property is worth now, what the works will cost and what it should be worth afterwards.

How much can I borrow with auction finance?

It depends on the deal.

Propp's lender panel offers auction finance from around £50,000 up to £15 million, depending on the lender and circumstances.

For investment property, lenders will typically look closely at:

  • The property

  • Your deposit

  • The overall project

  • Your experience

  • Your exit strategy

A larger deposit can sometimes mean a more competitive rate and greater lender flexibility.

Some lenders may also consider additional security, potentially allowing investors to raise more against other property they own.

Don't just ask “how much can I borrow?”

Ask “how much can I borrow and does the deal still stack up?”

The amount of experience a property investor has will also help determine how competitive the interest rate is that we are trying to negotiate.

How much does auction finance cost?

Auction finance usually costs more than a long-term mortgage. That's because it's short-term specialist finance designed to move quickly and accommodate properties or situations that don't fit standard lending.

Costs can include:

  • Interest

  • Arrangement fee

  • Broker fee

  • Valuation fee

  • Legal fees

  • Exit fee, where applicable

Don't focus on the headline interest rate alone.

The total cost of the finance is what matters.

This is also a perfect place for your comparison tool to sit immediately underneath.

Want to see what auction finance could cost? Compare your options with Propp.

What are auction finance rates?

There's no one-size-fits-all auction finance rate.

The rate you're offered can depend on things like:

  • Loan-to-value (LTV)

  • Property type

  • Property condition

  • Borrower experience

  • Exit strategy

  • Loan size

  • Project complexity

As a rough guide, you’ll usually need a deposit of around 25%, although this can vary depending on the lender, property and circumstances. Some lenders may offer higher LTVs, while more complex or higher-risk deals may require a larger deposit.

That's why comparing lenders is important.

Propp shows indicative rate ranges from auction finance lenders, giving you a starting point for understanding the potential cost of your deal.

And don't just look at the rate. Arrangement fees, valuation fees, legal costs and other charges can all affect the overall cost of borrowing.

Want to see what your auction finance could cost? Compare your options with Propp.

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How much does auction finance cost?

As auction finance is a short-term form of finance, costs are generally higher than longer term loans. In addition to a monthly interest rate being charged on the loan, you will also have to pay some fees. The typical fees for auction finance are:

  • Arrangement fee - This fee is charged by the auction finance lender and is usually 1- 2% of the loan amount. It is paid on completion and can usually be added to the loan.

  • Broker fee - This fee is usually between £500 and 1.5% of the loan amount.

  • Lender’s exit fee - some lenders charge an exit fee when auction finance is repaid. If they do, this is usually 1 month’s interest.

  • Valuation fee - In some cases, a physical inspection of the property by a chartered surveyor is needed.

  • Legal fees - This fee is paid to the solicitors for completing the legal work. Usually, both your own and the lender’s legal fees must be met by the borrower.

Am I eligible for auction finance?

Auction finance lenders assess eligibility based on the following criteria:

  • Exit strategy – Lenders will want to know how the auction finance will be repaid.

  • Deposit - If you can put down more it’s always better as this will help you to secure a better interest rate. Lenders have minimum deposit requirements of 10-25%.

  • Credit History – As with any loan, good credit is key, but bad credit in this case is only bad if it puts the exit strategy at risk.

  • Property experience – Although you can get auction finance as a first-time buyer, having experience with similar property purchases and a strong track record can boost your eligibility. If you already own property, it can be used as extra security to further increase your creditworthiness.

Auction finance is a type of unregulated borrowing, so this means that lenders have the flexibility to assess applications on a case-by-case basis.

How does auction finance work?

One of the most complicated areas is how auction finance works. That’s why we are here to help cut through the financial jargon and take a look at how auction finance works.

Auction finance is like mortgage lending in some ways, but completely different in others! Here are some of the key points:

  • Auction finance lenders will want you to have an exit strategy.

  • You will usually have to put down a deposit of 10% - 35% of the auction property price. For higher risk property you can expect this to be higher, up to 50%.

  • Auction finance rates are higher than mortgage rates.

  • Some lenders will let you use other property or asset as security.

  • Auction finance is short term – typically 1-24 months.

  • Your income and the property value are less important to the lender… it’s all about that exit plan!

  • Speed is key – you normally get the funds to repay within 14 days.

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What happens if you buy at auction and can't get finance

You know that old saying “You should never take a risk without doing your due diligence first”? Well, we’re going to add a little twist to that: “And you should never take a risk without having your auction finance in place!”

That’s because if you choose to buy at auction without doing your due diligence first, and without having your auction finance in place, it could cost you – in more ways than one. You’ll face legal consequences and financial penalties, which will just make your life harder.

Auction sales are legally binding once the hammer falls, so you'll also be in breach of contract. You'll lose your deposit (or reservation fee) and may face other costs on top.

Of course, we'd advise against taking these undue risks.

Can you buy an auction property before the auction?

It’s a little-known fact that you can buy an auction property before the auction itself.

It’s called “pre-auction,” and it means you can make an offer on a property before the bidding starts.

Most auction houses will welcome pre-auction offers, and if you are really interested in the auction property up for grabs, then a prior offer is a great idea.

Bear in mind that if your offer is accepted, the sale will still go through under auction conditions, meaning you will have to pay the deposit or registration fee immediately. If you don’t pay these, as mentioned before, you will face heavy penalties.

We would therefore recommend doing all your pre auction prep as normal:

  • What is your maximum bid? Auctions are an exciting way to buy property, so if you don’t set this, it’s far too easy to get carried away!

  • Valuation work – this is a great way to see how much you would be prepared to pay for the property.

  • If you are able, go and view the property in person.

  • Do your due diligence – have a solicitor check the legal pack and have a survey done.

  • Make sure your finances are in place.

  • Check the auction terms and legal pack to prepare you for any additional costs.

Once you’ve done all the above, it’s time to contact the auction house with an offer.

To sum up there are three things that you need to do in order to use auction finance successfully: Assess whether this is a viable option for you, do your research about the property and the current market, and be able to pay for the property upfront. These things will help you pull the curtain back on a new world of investing and will allow you to feel in control of your investment by ensuring that you can dictate the terms of your purchase.