Chain Break Bridging Loans Explained
Property chains collapse every day. When your buyer pulls out but you've already committed to your next home, a chain break bridging loan can save the purchase. Here's how it works.
What is a Chain Break?
A chain break occurs when you need to complete on a purchase before selling your current property. Common scenarios:
- Your buyer pulls out at the last minute
- Your buyer's mortgage falls through
- You find your dream home but haven't sold yet
- The seller won't wait for your chain to complete
Without intervention, you lose your purchase - and potentially the money spent on surveys, legal fees, and searches.
How Chain Break Bridging Works
A chain break bridging loan lets you:
- Complete your purchase - Using bridging finance instead of sale proceeds
- Own both properties - Temporarily, while your old home sells
- Sell without pressure - No desperate price cuts to quick buyers
- Repay the bridge - When your original property sells
Can I Use Equity in My Current Home?
Yes - this is often the best approach. If your current home is worth £400,000 with a £150,000 mortgage, you have £250,000 equity.
A lender can secure the bridging loan against:
- Just the new property - Simpler, but may need larger deposit
- Both properties - More security = better rates, higher LTV possible
Using both properties as security often unlocks rates 0.1-0.2% lower.
Typical Chain Break Costs
For a 6-month bridge of £300,000:
- Interest at 0.55%/month: £1,650/month (£9,900 total)
- Arrangement fee at 1.5%: £4,500
- Valuation + legal: £3,000
- Total cost: ~£17,400
Compare this to losing your dream home, or accepting a £30,000 reduction to sell quickly.
Chain collapsed? Don't lose your purchase.
Compare chain break rates from specialist lenders. Most can complete in 2-3 weeks.
Compare Chain Break Loans