A practical guide to bridging loans

How a bridging loan works

A bridging loan is a short-term loan secured on property. It covers a gap: you need the money before a sale, a mortgage, or another payment arrives. You agree how the loan will be repaid, which is called the exit.

It is not a mortgage. A mortgage is usually repaid over many years from income. A bridge is meant to be repaid in full when the exit happens. If you searched for a mortgage in a particular town, start here only if the timing is too short for a mortgage.

There is no broker fee for asking us to compare options. If a loan completes, the lender usually pays us. The lender's own fees are separate.

Three ways interest can be charged

Serviced interest is paid each month on the original loan. The balance does not grow. At 0.75% a month, £200,000 costs £1,500 a month, or £9,000 over six months, before fees. That 0.75% figure is a worked example, not a rate you will be offered.

Rolled-up interest is added to the balance and paid at the end. Our calculator compounds rolled-up interest monthly, so the total is higher than the serviced £9,000 for the same rate and term. A lender might roll up simple interest instead. The offer will say which.

Retained interest is usually calculated in advance and deducted from the money you receive. You do not pay it monthly, and it is not the same number as the rolled-up total. The calculator does not estimate a retained-interest advance.

What happens after you enquire

You tell us about the property, the amount you want to borrow, and how you expect to repay. Call or WhatsApp 07973 197535, or use the enquiry form. There is no obligation and no broker fee.

A lender then decides whether to look at the case. They may ask for a valuation and for solicitors to review the title. Nothing on this website guarantees how long that takes or that a loan will be offered.

• You send the property details and the exit plan.
• We compare options from a wide panel of UK bridging lenders.
• A lender, if interested, sets the rate, fees, and conditions.
• Valuation and legal work follow the lender's process.
• You repay from the exit you agreed, or you do not proceed.

Documents to gather

Lenders do not all ask for the same pack. These are the papers people are often asked for. Having them ready does not mean a loan will be offered.

• Photo identification and proof of address.
• The property address, tenure, and what the loan is for.
• The price or estimated value, and any existing mortgage.
• How the loan will be repaid, with any sale memo or refinance plan.
• For an auction, the legal pack and the completion deadline.
• For works, a simple list of what will be done. Quotes help, but they are not a promise the lender will fund the works.
• For a company borrower, the company name and who owns it.

Exit strategy and eligibility checklist

The exit is the plan to repay the whole loan. A lender will judge whether that plan is realistic. Use this as a checklist, not as an approval.

• Name the exit: sale of this property, sale of another, or a refinance.
• Say when you expect that to happen, and what happens if it is late.
• Check the property can be valued and that the title can be reviewed.
• If the exit is a mortgage, ask that lender whether the property would qualify after the bridge. Do not assume it will.
• If you already own the security, know the balance of any current mortgage.
• Only borrow an amount you can repay from the exit, not from hope.

Bridging compared with other borrowing

A remortgage replaces a long-term loan and is usually arranged more slowly than a bridge. It can be cheaper over many years if you have time to wait and the property is acceptable to a mortgage lender.

Development finance is aimed at a build, often released in stages against the works. A bridge is a shorter hold, sometimes used before development finance or a sale.

A secured loan can sit behind a mortgage and be repaid over a longer term. It is not designed for a deadline measured in weeks.

Choose by the deadline and the exit, not by a rate printed on a website. We do not publish a comparison table of prices because we do not have a sourced rate for each product.

Common reasons people use a bridge

Auction: the contract often has to complete within a short deadline, commonly 28 days. A mortgage is often too slow. Ask a lender before you bid if you can. This is not a promise that funds will arrive in time.

Chain break: you want to buy before your current home sells. The exit is usually that sale. If the sale falls through, you still owe the bridge.

Refurbishment: the property may not be acceptable to a mortgage lender until works are finished. The exit is a sale or a later mortgage. The bridge does not itself guarantee that later mortgage.

Plain-English glossary

Exit: how the loan will be repaid in full.

LTV: the loan as a percentage of the property value. The lender sets the maximum. We do not.

Serviced interest: interest paid each month.

Rolled-up interest: interest added to the balance and paid at the end.

Retained interest: interest usually deducted from the amount released.

Arrangement fee: a lender fee. We do not state a usual percentage.

No broker fee: you do not pay us a broker fee. If a loan completes, the lender usually pays us.