Bridging Loans

One of the main reasons people choose a bridging loan is because it can often be arranged much faster than a standard residential mortgage. If you’re working towards a fixed completion date, buying at auction or trying to keep a property purchase on track, speed can be a major advantage.

The exact timescale will depend on your circumstances, the property and how quickly valuations and legal work can be completed. Some applications progress within days, while others take longer.

When time is critical, we’ll identify lenders that can meet your deadline, liaise with everyone involved in the transaction and keep your application moving as efficiently as possible.

The cost of a bridging loan depends on more than just the interest rate. Lenders may charge arrangement fees, valuation fees and legal costs, so it’s important to look at the overall cost of borrowing rather than focusing on a single figure.

The amount you borrow, the length of the loan and how the interest is charged will also affect what you’ll repay.

Before recommending a bridging loan, we’ll explain all of the costs involved, compare suitable lenders and make sure you understand exactly what you’ll pay before moving forward.

Bridging loan interest can be charged in different ways depending on the lender and the product. Some loans require monthly interest payments, while others allow the interest to be added to the loan and repaid at the end of the term. In some cases, the interest is deducted from the loan before the funds are released.

The way interest is charged will affect the amount you receive, your repayments during the term and the total cost of borrowing. It’s worth understanding how each option works before deciding which product is right for you.

When comparing bridging loans, it’s important to look beyond the interest rate and consider how the loan is structured as a whole.

Yes. Lenders will want to know how you intend to repay the bridging loan before they agree to lend. This is known as your exit strategy and forms an important part of the application.

For many borrowers, this means selling a property or replacing the bridging loan with a residential mortgage before the term ends. Whatever your plans, your proposed exit needs to be realistic and achievable within the agreed timescale.

Having a clear exit strategy not only gives lenders confidence, but can also improve the likelihood of your application progressing smoothly.

Bridging loans are designed as a short-term borrowing solution rather than a long-term mortgage. The length of the loan will vary depending on the lender and your circumstances, but it should provide enough time to achieve your planned exit.

Choosing the right term is important. A loan that’s too short may leave you under unnecessary pressure, while a longer term could increase the overall cost of borrowing.

Before applying, it’s worth making sure the loan term realistically reflects how long you’ll need the funds and when you expect to repay the loan.

Yes, provided the property and your circumstances meet a lender’s criteria. Auction purchases are one of the most common uses for bridging loans because completion deadlines are often much shorter than a standard property purchase.

Having the right finance in place can help you meet those deadlines and avoid the penalties that may apply if completion is delayed.

If you’re planning to bid at auction, speaking to us beforehand can help you understand what’s possible before you raise your hand.

Potentially, yes. Some properties can’t be purchased with a standard residential mortgage because of their condition or construction. In these situations, a bridging loan may provide a way to complete the purchase while you carry out the work needed to make the property mortgageable.

Not every lender will consider the same types of property, and the lending criteria can vary significantly depending on the circumstances.

Understanding how you intend to improve the property and repay the loan will often play an important part in finding a suitable lender.

In many cases, yes. Bridging lenders will usually lend up to a percentage of the property’s value, so you’ll often need to fund the remaining balance yourself.

That doesn’t always mean using cash. If you already own another property, the equity you’ve built up may be used as additional security instead, which can reduce or even remove the need for a cash deposit.

The amount you can borrow will depend on the lender’s maximum loan-to-value, the security available and your individual circumstances.