Bridging Loan
A bridging loan is a short-term, secured loan used to "bridge" a gap in financing. It's typically repaid within 1–24 months, either by selling the property, refinancing onto a longer-term mortgage, or through another planned exit.
Why It Matters
Bridging loans are one of the most commonly used tools in UK property finance. They let developers and investors move fast — completing purchases in days rather than weeks — and access funding in situations where traditional mortgages aren't available.
Common uses include:
- Buying at auction (28-day completion deadline)
- Funding refurbishment works on unmortgageable properties
- Chain breaks — buying before your existing property sells
- Refinancing out of development finance
- Securing a deal while waiting for planning permission
How It Works
- You apply through a broker or directly to a lender
- The lender assesses the property value, your deposit/equity, and your exit strategy
- A surveyor values the security property
- Solicitors handle legal work
- Funds are released (typically 5–15 working days)
- You repay the loan in full at the end of the term via your exit strategy
Interest is usually rolled up (added to the loan balance) rather than paid monthly, so there are no monthly payments during the loan term.
Typical Costs
| Fee | Typical Range |
|---|---|
| Monthly interest | 0.5%–1.5% |
| Arrangement fee | 1%–2% of loan |
| Exit fee | 0%–1% |
| Valuation | £500–£2,000 |
| Legal fees | Varies |
Related Terms
- What is Bridging Finance? — full guide on how bridging works
- GDV — Gross Development Value, a key metric in property finance
- LTV vs LTC — lending ratios that determine how much you can borrow
Need a Bridging Loan?
We broker bridging loans from over 100 specialist lenders. Whether it's a straightforward purchase or a complex refinance, get in touch and we'll find the right deal for your situation.