What is a bridging loan?

A bridging loan is a short-term secured loan usually used to bridge a gap between buying, selling, refinancing or completing property works. It is commonly secured against property or land.

When might someone use a bridging loan?

Bridging loans are often used for auction purchases, buying before selling, chain breaks, refurbishment projects, unmortgageable properties, short-term refinancing, land purchases and some commercial property transactions.

Do bridging loans need an exit strategy?

Yes. Lenders usually want to understand how the bridging loan will be repaid. Common exit strategies include selling the property, refinancing onto a standard mortgage, refinancing onto a buy-to-let mortgage or selling another property.

Can bridging finance be used for an unmortgageable property?

Bridging finance may be considered for some properties that are not suitable for a standard mortgage, depending on the property condition, planned works, loan-to-value, borrower profile and repayment strategy.

How quickly can a bridging loan complete?

Completion times vary depending on the lender, valuation, legal work, property details and complexity of the case. Some bridging loans can complete quickly where the information is clear and the exit strategy is acceptable.

Are bridging loans regulated?

Some bridging loans are regulated and some are unregulated. This usually depends on the property use and borrower circumstances. A regulated adviser can explain which type may apply to a specific case.

Bridging loan guides

Bridging loan guides for short-term property finance

Practical guides covering bridging loans, auction purchases, chain breaks, refurbishment finance, exit strategies, rates, fees and the risks to understand before using short-term secured borrowing.

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Bridging loan guides for short-term property finance

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