Day One Refinance Explained
A Day One Refinance is when you refinance a property onto a standard mortgage immediately after purchasing it with cash or bridging finance, without waiting for a traditional 6-month period.
Traditionally, many high street lenders adhere to the 'six-month rule' (often linked to the Council of Mortgage Lenders / UK Finance guidelines). This rule states that you cannot refinance a property within six months of its original purchase or registration at the Land Registry.
However, specialist commercial lenders offer Day One Refinance products. These allow an investor who has purchased a property using cash or a short-term bridging loan to refinance immediately onto a long-term facility. This is particularly useful for investors buying at auction who need to quickly recycle their cash.
The Caveat
While you can refinance on 'day one', lenders will typically only lend against the original purchase price (or the current value, whichever is lower) unless significant structural improvements have been made.