Find the right bridging loan

A bridging loan is a short-term loan of 3 to 18 months. It allows you or your business to act quickly to make any kind of financial commitment before you sell a property or secure a longer-term loan or mortgage. Bridging loans are repayable in full at the end of the term, rather than in instalments like with a traditional loan. Learn more about bridging loans.

Bridging loans are mainly used to buy or sell property, allowing you to buy a new home or premises before selling your old one. Landlords, homeowners and property developers often use bridging finance for buying a property at auction or funding renovations. Bridging loans can also be used by businesses as working capital, for buying machinery or equipment, and paying tax bills. Learn more.

You can get bridging finance much quicker than a mortgage – usually in under 14 days – so you can seize opportunities at auctions for refurbishments or buy-to-let investments. You can also buy uninhabitable properties that would be ineligible for other borrowing. If you buy properties under value, you can also borrow against the value of the property, not the purchase price.

Bridging loan interest rates are usually much lower than standard loans. And you’re not tied into making monthly repayments with bridging finance like you are with a traditional loan.

Regulated bridging loans are secured against a property which is, or will soon be occupied by the borrower or a member of their family. This type of bridging finance is regulated by the FCA. Unregulated bridging loans are used for a business investment or commercial property, but these lack FCA protection. Learn more about regulated and unregulated bridging loans.

You can choose from a closed bridging loan or an open bridging loan.

A closed bridging loan has no fixed repayment date, but you are usually expected to repay within a few months, usually upon the scheduled completion of a property sale or securing a mortgage. You’ll need to explain your repayment plans to your lender beforehand. Closed bridging loans often have better rates.

With an open bridging loan, you don’t have to detail your repayment plans to your lender. This type of bridging finance is used when you’ll be paying back the loan with a property sale, but you don’t yet have a buyer or a completion date. You also have a longer period to settle open bridging finance – usually 12 to 18 months.