What bridging finance is
Bridging finance is a short-term loan secured by a legal charge over property. It is designed to be in place for a limited period — often while you complete a purchase, carry out works, wait for planning permission, or wait for another property to sell — rather than as a long-term way of owning property.
Because it is short-term and secured, lenders focus heavily on the property itself and on how the loan will be repaid, rather than purely on income in the way a standard mortgage lender would. That makes bridging more flexible in some respects, but it is not a cheaper or easier alternative to a mortgage — it is a different tool for a different job.
Common uses
- Buying at auction, where the contract sets a fixed completion deadline
- Breaking a residential chain when your own sale is delayed
- Buying land, with or without planning permission
- Funding refurbishment or light conversion work before refinancing
- Raising capital quickly against property you already own
- Buying a property that a mainstream lender won't currently mortgage, such as one lacking a kitchen or bathroom
Regulated and unregulated bridging
Some bridging loans are regulated and some are not. The regulatory treatment depends on the borrower, the security, its use and any applicable exclusions — not on whether the loan is a first or second charge, and not on business or investment purpose alone. If a home that you or a family member live in, or intend to live in, will be used as security, tell us at the outset.
First and second charge
A first charge bridging loan is the only, or primary, loan secured against the property. A second charge bridging loan sits behind an existing mortgage or loan already secured on the same property — the first-charge lender is repaid first if the property is sold, with the second-charge lender repaid from what remains.
Second charge bridging usually requires the consent of, or notice to, your existing (first charge) lender, and lenders will look closely at the combined borrowing across both charges. Read more in our dedicated page on second charge bridging.
Open and closed bridging
A closed bridge has a fixed, known exit date — for example, a sale that has already exchanged contracts. An open bridge has no fixed exit date, for example where you plan to sell but haven't yet agreed a buyer. Lenders generally view open bridging as higher risk, because there is more uncertainty about when and how the loan will be repaid, and will want a credible plan and backstop for repayment regardless.
How interest is paid: retained, rolled-up, serviced
- Serviced interest — you pay interest monthly from income, as with a standard mortgage.
- Rolled-up interest — interest is added to the loan balance each month and repaid in full at the end, alongside the capital.
- Retained interest — the lender deducts an estimated amount of interest from the loan at the outset, reducing what you receive but meaning you don't make monthly payments during the term.
Which structure suits you depends on your cash flow during the bridge and on lender policy. Rolled-up and retained interest both increase the amount you need to repay at the end, so the exit needs to cover that larger figure.
Gross loan, net advance and LTV
The gross loan is the total facility a lender agrees. The net advance is what actually reaches you (or the seller/solicitor) after fees and any retained interest are deducted. Loan-to-value (LTV) compares the loan to the property's value — lenders set their own maximum LTV based on the property type, condition and use, and it is usually lower for riskier security such as land or heavily unmodernised property.
Illustrative example — not a quote or available deal
Exit strategies
An exit strategy is how you intend to repay the bridging loan. Lenders assess how realistic it is before agreeing to lend. Common exits include:
- Refinancing onto a standard residential, buy-to-let or commercial mortgage once the property is mortgageable or works are complete
- Selling the bridged property or another property you own
- Receiving proceeds from a related sale that is already agreed
- Securing development finance to continue a larger project
If an exit depends on refinancing, lenders will usually want some assurance that you are likely to meet a future lender's criteria, not just that bridging finance itself is available.
Costs and fees
Bridging finance typically involves several cost elements: the lender's interest (charged monthly but often rolled up or retained, as above), an arrangement fee, valuation fees, legal fees for both your solicitor and the lender's solicitor, and potentially an exit fee. Costs vary by lender, loan size, security and complexity, and we don't publish rates here because they move constantly and depend on individual circumstances — we'll set out the actual costs of any option in writing before you commit.
What affects speed
Bridging can sometimes complete faster than a standard mortgage, but no lender can guarantee a completion date. What actually affects timing includes: the type of valuation the lender accepts (desktop, automated or a full physical inspection), how straightforward the legal title is, how quickly you and your solicitor return documents, whether the property is standard construction, and how complex the security or ownership structure is. See our page on fast bridging finance for more detail.
What lenders need
- Details of the security property and its current condition
- Proof of identity and address, and source of any deposit or funds
- A clear, evidenced exit strategy
- Evidence of experience for larger or more complex projects
- A valuation, and legal title information
- For regulated cases, evidence that affordability has been properly considered
Risks if the exit fails or completion slips
Repossession risk
Because of this, it's important to have a realistic exit plan and, ideally, a fallback if the primary exit doesn't materialise. We will always talk through the risks as well as the potential benefits before you proceed.
Choose your type of bridging
Every bridging case is different. Explore the page that matches your situation: fast bridging, auction bridging, land bridging, 100% bridging using additional security, second charge bridging, refurbishment and development bridging, or check the alternatives to bridging if you're not sure a bridge is the right tool.
If your plans involve buying a trading business, investment property or farmland, our commercial mortgages and property investor pages may also be useful, and our bridging loans explained guide covers the basics in more depth.
How our advice is paid for
Initial advice is free. If you go ahead, any fee will be explained and agreed with you in writing before chargeable work begins. A lender or finance provider may also pay commission.
We will assess your requirements and explain the finance routes that may be available. Where specialist support or an introduction is required, we will explain who will handle the case and any associated costs or commission.
Bridging enquiries are assessed internally by our team to understand your requirements and the appropriate route. Where referral to a partner adviser is needed, we will explain who they are, what information will be shared and any referral payment, and obtain your permission before sharing your details.