Bridging finance basics: when short-term property loans make sense
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Quick answer: A bridging loan is short-term secured finance — usually 0.5–1.5% interest per month — that covers a gap between buying and selling property or before long-term mortgage funds arrive. Only use it with a clear exit plan within weeks or a few months.
Bridging finance is expensive but fast. It suits chain breaks, auction purchases with tight deadlines, or refurbishments before refinancing. Because monthly costs dwarf standard mortgage rates, treat bridging as a timing tool — not a long-term loan.
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Read the full mortgages & first homes guide →Quick answer: What is a bridging loan? →Primary source: www.gov.uk/buying-a-home
Common uses
Buying before you sell: you need to complete on a new home while your current one is still on the market. The bridge is repaid when your sale completes.
Auction purchases: many auctions require completion within 28 days — too fast for a standard mortgage. A bridge funds the purchase until you remortgage or sell.
Property refurbishment: investors buy unmortgageable homes, renovate, then refinance onto a buy-to-let mortgage — the bridge covers purchase and works.
Costs to budget
Calculate total cost: monthly interest × expected months + arrangement fee + valuation + legal fees + exit fee. A £200,000 bridge at 1% a month for four months costs roughly £8,000 in interest alone before fees.
If your exit slips — sale falls through, remortgage declined — rolling costs accumulate quickly. Build contingency time and money into the plan.
Regulation and risks
Regulated bridging on a home you live in or will live in must follow FCA mortgage conduct rules. Unregulated bridging on investment property carries less consumer protection — read terms carefully.
Never use bridging without a realistic exit. Speak to a whole-of-market broker who specialises in bridging; compare at least two quotes.
Common questions
Is bridging cheaper than a mortgage?
No. Bridging is far more expensive per month. It wins on speed and flexibility, not on cost over any meaningful period.
Can I get bridging with bad credit?
Some specialist lenders accept adverse credit because the loan is asset-backed, but rates and fees rise. Exit strategy quality matters more than with standard mortgages.
How fast can bridging complete?
Some regulated bridges complete in two to three weeks with prepared paperwork. Auction deadlines of 28 days are common targets.