Mortgages / Bridging Loans
Bridging Loans
Short-term property finance for time-sensitive transactions. When speed and certainty matter, bridging loans provide the flexibility that conventional mortgages cannot.
The Basics
What is a bridging loan?
A bridging loan is a short-term, secured loan that “bridges” a financial gap — typically between the purchase of a new property and the sale of an existing one, or whilst longer-term financing is being arranged. The loan is secured against property, and the lender takes a first or second charge depending on the circumstances.
Unlike a standard mortgage, bridging finance is assessed and arranged quickly. Lenders focus on the value of the security and the credibility of your exit strategy rather than conducting the extended affordability assessments associated with residential mortgages.
Interest rates on bridging loans are higher than on long-term mortgages — these products are designed for short-term use. A well-structured bridging transaction, with a clear exit, can be highly cost-effective relative to the alternative of missing a time-sensitive opportunity.
Applications
Common use cases
Chain Breaks
When a property chain collapses and you need to proceed with a purchase before your current home sells, a bridging loan can provide the short-term finance needed to keep the transaction moving.
Auction Purchases
Auction completions typically require funds within 28 days — too fast for a standard mortgage. Bridging finance can be arranged quickly, allowing you to meet auction deadlines with confidence.
Renovation Finance
Properties that are unmortgageable in their current condition can be purchased using a bridging loan, renovated to a habitable standard, and then refinanced onto a conventional mortgage.
Development Projects
Short-term bridging facilities can fund the early stages of a development project whilst longer-term development finance or a term mortgage is arranged to take out the bridge.
Important Considerations
Key things to know
Repayment
Bridging loans are short-term by design, typically running from a few weeks to 12–18 months. Interest can be rolled up and repaid at the end, or serviced monthly depending on the product. The full loan balance is repaid in a single amount at the agreed term end.
Exit Strategy
Every bridging loan requires a clear and credible exit strategy — the mechanism by which the loan will be repaid. This is usually the sale of a property or refinancing onto a long-term mortgage. Lenders scrutinise exit strategies closely, and we help you present yours clearly.
Speed of Arrangement
One of the defining characteristics of bridging finance is the speed at which it can be arranged. In straightforward cases, funds can be available within days. We work with a panel of specialist bridging lenders who understand the importance of moving quickly.
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