What is a bridging loan?
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In short: Short-term secured finance — usually on property — that bridges a gap between buying and selling, or before long-term mortgage funds are available. Rates are far higher than standard mortgages and fees are substantial, so bridging is only cost-effective for weeks or a few months.
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Reviewed by Kaiser Khan
Bridging loans are designed for temporary funding needs: buying a new home before your current one sells, auction purchases that must complete within 28 days, or property refurbishments before refinancing onto a buy-to-let mortgage. Loans are secured against property and typically run from a few weeks to 12 months.
Interest rates in 2026 are often 0.5% to 1.5% per month — far above residential mortgage rates near Bank of England base rate plus margin. Arrangement fees of 1% to 2% of the loan, valuation costs, legal fees and an exit fee all add up. Lenders lend on loan-to-value — often up to 70% to 75% of the property value — and require a clear exit strategy.
Regulated bridging on your main home is FCA-regulated; unregulated bridging on investment property is not. Because costs are high, calculate the daily interest and total fees before proceeding, and have a realistic plan to repay through sale proceeds or a remortgage. If timing slips, rolling bridging debt gets expensive quickly.
Primary source: gov.uk/buying-a-home/preparing-to-buy
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