Chain breaks
Buy your next home before your current one has sold, so you don't lose the property you want.
Short-term property finance
Bridging loan broker for when timing matters.
A bridging loan broker arranges short-term loans secured against property, usually for between 1 and 24 months. These loans bridge a gap until longer-term money comes through, such as a house sale or a mortgage. Interest is charged monthly and can often be added to the loan, and it's repaid through an agreed exit, like selling a property or refinancing.
Free, no-obligation call
Common uses
What is a bridging loan used for?
Bridging loans are used when you need money quickly and a standard mortgage either can't be arranged in time or won't lend on the property yet. The most common uses are buying before you sell, auction purchases and properties that need work.
Auction purchases
Auction buyers usually have around 28 days to complete, which is often too quick for a standard mortgage.
Refurbishments
Buy and renovate a property, then refinance onto a mortgage or sell once the work is finished.
Unmortgageable properties
Buy a property a mortgage lender won't accept yet, for example one without a working kitchen or bathroom.
Investment and business
Move quickly on a buy-to-let, commercial property or business opportunity while longer-term finance is arranged.
Downsizing
Buy your smaller home first, then repay the bridging loan when your current home sells.
Types of bridging loan
What types of bridging loan are there?
There are three main ways to group them: whether they're regulated, whether they have a fixed repayment date, and whether they're the first or second loan secured on the property. Most loans are a mix of these, such as a regulated, closed, first charge bridge.
Regulated bridging
Secured on a property you or a close family member live in, or plan to live in, such as a chain break on your own home. It's regulated by the Financial Conduct Authority and usually lasts up to 12 months.
Unregulated bridging
Used for buy-to-let, commercial or investment property, auctions and development projects. It isn't regulated by the Financial Conduct Authority and can often run for longer, up to around 24 months.
Closed bridging
Has a fixed repayment date because your exit is already confirmed, for example when the sale of your current home has exchanged. It's often seen as lower risk by lenders.
Open bridging
Has no fixed repayment date, although you'll still need a clear exit plan and the loan must be repaid within the agreed term, usually 12 to 24 months.
First charge
The bridging loan is the main loan secured on the property, either because there's no mortgage or because it repays the existing one.
Second charge
The bridging loan sits behind an existing mortgage on the property, which stays in place. The existing lender may need to agree to it.
Terms and criteria depend on the individual lender and your circumstances.
Things to know
What should you know before you bridge?
Bridging can be a useful tool when time matters, but it costs more than a standard mortgage and is designed to be short term. These are the main things to understand before going ahead.
- You need a clear exitLenders want to know exactly how the loan will be repaid, usually from a sale or a new mortgage.
- Interest is charged monthlyRates are quoted per month rather than per year, so the cost adds up the longer you keep the loan.
- There are set-up costsExpect arrangement, valuation and legal fees, and some lenders also charge an exit fee.
- It can be arranged quicklyBridging can often complete in a matter of weeks, depending on the valuation and legal work.
Your home or property may be repossessed if you do not keep up repayments on a bridging loan or any other debt secured on it.
Bridging loan FAQs
Your bridging questions, answered.
Quick answers to the questions people ask most about bridging loans. Everything depends on the lender and your individual circumstances. Related: our home mover mortgages page for buying and selling at the same time, and our commercial mortgage broker page for business property.
What is a bridging loan?
A bridging loan is a short-term loan secured against property, usually for between 1 and 24 months. It's used to bridge a gap until longer-term money comes through, such as the sale of a property or a new mortgage. Interest is charged monthly and can often be added to the loan.
How long does a bridging loan last?
Most bridging loans last 12 months or less, although unregulated bridging can run for up to around 24 months. Regulated bridging on your own home usually has a maximum term of 12 months. The term depends on the lender and your exit plan.
How quickly can a bridging loan be arranged?
They can often be arranged in a matter of weeks, much quicker than most mortgages. The timescale mainly depends on the valuation and the legal work, and on how straightforward the property and your circumstances are.
How much can I borrow with a bridging loan?
Many lenders lend up to around 70% to 75% of the property's value, and some will go higher if you offer additional property as security. The amount depends on the lender, the property and your exit plan.
Can I get a bridging loan to buy before I sell?
Yes. A chain break bridging loan lets you buy your next home before your current one has sold, with the loan repaid when the sale completes. Because it's secured on your home, it's usually regulated, and lenders will want to see a realistic plan to sell.
Can I get a bridging loan with bad credit?
It can be possible. Bridging lenders tend to focus more on the property and your exit plan than on your credit history, although they will still check it. It depends on the type of credit issue, how recent it is and the individual lender's criteria.
Book a free call
Talk to us about bridging.
Book a free call with Harry or Lois to talk through your plans, your exit and whether a bridging loan could work for your situation.
- Completely free, with no obligation
- Speak to Lois or Harry directly, not a call centre
- Advising clients in Suffolk, Essex and across the UK
Prefer to talk now? Call 01787 209880 or email [email protected]
Ready to take the next step?
Book a free, no-obligation call with Lois or Harry and find out what's possible for you.