Frequently Asked Questions

A bridging loan is a short-term secured loan used to "bridge" a gap in financing. Typically lasting 1-24 months, they're commonly used for property purchases, auction buys, chain breaks, and refurbishment projects. Unlike traditional mortgages, bridging loans can be arranged quickly - sometimes within days.

Most lenders offer bridging loans from £25,000 to £25 million or more. The amount depends on the property value (LTV), typically up to 75% LTV for standard cases, though some lenders offer up to 80% LTV. For development projects, lenders may advance up to 70% of the Gross Development Value (GDV).

Bridging loans can complete much faster than traditional mortgages. Simple cases with clean title and standard property can complete in 5-10 working days. More complex cases typically take 2-4 weeks. Auction purchases often complete within the 28-day deadline. Some lenders offer same-day decisions.

Regulated bridging loans are for properties you or a family member will live in - they're governed by the FCA and offer more consumer protections. Unregulated bridging is for investment properties, commercial purposes, or business use. Most bridging loans are unregulated as they're typically used for investment properties.

Bridging loan rates typically range from 0.44% to 1.5% per month, depending on LTV, property type, and borrower profile. The best rates (0.44-0.55%) are available for low-LTV loans on standard residential properties with strong exit strategies. Rates increase for higher LTV, complex properties, or adverse credit.

Common fees include: Arrangement fee (1-2% of loan), Exit fee (0-1.5% of loan), Valuation fee (£500-£2,000+), Legal fees (£1,000-£3,000+), Broker fee (0-1% if applicable), and Admin fees (£0-£500). Always factor in the total cost of finance, not just the headline rate.

With retained interest, all interest for the loan term is deducted from the loan upfront - you receive less on day 1 but make no monthly payments. With serviced interest, you pay interest monthly like a traditional mortgage. Retained is more common for bridging as borrowers often have no income from the property during the term.

Most bridging loans have fixed rates for the term of the loan, giving you certainty over costs. Some lenders offer variable rates linked to the Bank of England base rate. Fixed rates are typically slightly higher but protect you from rate increases during your loan term.

Bridging lenders are more flexible than traditional mortgage lenders. While good credit helps secure the best rates, many lenders accept applicants with CCJs (up to £5,000), defaults, or even discharged bankruptcy. The key factors are the property value, LTV requested, and strength of exit strategy.

Yes, most bridging lenders accept limited companies, SPVs (Special Purpose Vehicles), LLPs, and even offshore structures. In fact, many investors prefer to borrow through companies for tax efficiency. Personal guarantees from directors are usually required.

Bridging loans can be secured on most property types: residential, buy-to-let, HMO, commercial, semi-commercial, land (with or without planning), and even non-standard construction. Some specialist lenders fund care homes, hotels, and development sites. Unmortgageable properties are often ideal bridging candidates.

For unregulated bridging (investment property), income verification is minimal - the focus is on asset value and exit strategy. For regulated bridging (owner-occupied), lenders must assess affordability under FCA rules. Most bridging applications rely on the property and exit, not income.

Common accepted exits include: Property sale (with marketing evidence), Remortgage to BTL or residential mortgage (with AIP), Development sale (for finished units), Refinance to commercial mortgage, Sale of another asset, Inheritance/probate completion, and Business sale proceeds. Lenders want to see a clear, realistic plan.

If your exit is delayed, contact your lender early. Options include: extending the loan term (usually with fees), refinancing to another bridging loan, or negotiating a short grace period. Default interest rates (often 3-5% above standard) apply to overdue amounts. In worst cases, the lender can repossess and sell the property.

Yes, most bridging loans allow early repayment, often with no penalty after an initial period (e.g., 3 months minimum). Some lenders offer "no early repayment charge" products. Early exit can save significant interest - on a £500k loan at 0.5%, each month early saves £2,500 in interest.

Typical requirements include: Photo ID and proof of address, 3 months bank statements, Property details and purchase agreement, Exit strategy evidence (mortgage AIP or sales details), For companies: certificate of incorporation, accounts, director details. Some lenders can work from minimal documentation for urgent cases.

While not required, a broker can help you: Access lenders not available directly, Compare rates across the market, Navigate complex criteria, Speed up the application process. Some lenders are broker-only. Broker fees typically range from 0% to 1% of the loan amount.

Most bridging loans require a RICS valuation from a surveyor on the lender's panel. Costs range from £500 for simple residential to £2,000+ for complex commercial. Some lenders accept AVMs (Automated Valuation Models) or desktop valuations for lower LTV loans, enabling faster completion.

Yes, auction purchases are one of the most common uses for bridging finance. The 28-day completion deadline makes traditional mortgages impractical. With bridging, you can get a decision in principle before bidding, then complete the full application after winning. Many lenders specialise in auction finance.

Chain break bridging lets you buy your new home before selling your existing one, breaking the property chain. You take a bridging loan secured against your current home (or the new purchase), complete the purchase, then repay when your old home sells. This makes you a cash buyer and strengthens your offer.

Yes, refurbishment bridging (also called light or heavy refurb finance) is widely available. Light refurb covers cosmetic works under £50k (decoration, kitchen/bathroom). Heavy refurb covers structural works, extensions, and conversions. Some lenders advance against the end value (GDV lending) and release funds in stages.

Yes, though terms differ from standard property bridging. Land with planning permission typically gets better rates (LTV up to 65-70%). Land without planning is higher risk, so expect lower LTV (50-60%) and higher rates. Agricultural land and land banking have limited options. A clear development or sale exit is essential.