TL;DR: A bridging loan is a short-term loan secured against property, used to fill a gap in funding when standard mortgages are too slow or unsuitable.
The UK bridging loan market exceeded £10 billion for the first time in 2024, according to the Bridging and Development Lenders Association, reflecting how mainstream this type of finance has become. Terms run from 3 to 24 months, with the loan repaid in full at the end.
They cost more than regular mortgages, so you need a clear plan to repay. Speaking to a specialist broker is the best place to start.
Property deals don’t always run smoothly.
Your buyer pulls out at the last minute and your onward purchase hangs in the balance. You spot a run-down property at auction that needs completing in 28 days but won’t qualify for a standard mortgage. Or you’ve found the perfect commercial premises and the seller wants a quick sale.
These aren’t rare situations in the UK property market. In 2024, around 29% of agreed property sales fell through before completion, according to data from Quick Move Now. When a buyer pulls out, a standard mortgage simply can’t move fast enough to protect your onward purchase.
That’s where bridging loans come in.
They’re short-term loans designed to get you from where you are now to where you need to be, while you arrange longer-term finance or sell an existing property. In this guide, you’ll learn how bridging loans work, what they cost, who they’re suitable for, and what the risks look like.
What Is a Bridging Loan and How Does It Work?
A bridging loan is a short-term secured loan that helps you cover a temporary gap in funding, most often in a property transaction.
You borrow against the value of a property, receive the funds quickly, and repay the full amount (plus interest and fees) at the end of the term.
Loan terms generally run from 3 to 24 months.
Most borrowers don’t make monthly payments along the way. Instead, interest builds up and is settled in one go when the loan is repaid, though other payment structures are available.
How Bridging Loans Differ from Mortgages
The clearest difference is speed.
A standard mortgage can take six to eight weeks to arrange, sometimes longer.
According to MT Finance’s Bridging Trends data, the average bridging loan completed in 43 days in 2025 – the fastest rate since 2017 – down from 47 days in 2024. Straightforward cases can complete faster, and some simple transactions have been done in under two weeks.
The other key difference is purpose. Mortgages are designed for long-term ownership.
Bridging loans are designed for short gaps. They’re not a substitute for a mortgage; they’re a way to get from A to B while you sort out a longer-term plan.
Lenders also assess bridging loans differently. Rather than focusing primarily on your income, they look closely at the property being used as security and your plan for repaying the loan.
This makes them accessible in situations where a standard mortgage wouldn’t be possible.
On the cost side, bridging loans carry higher interest rates than mortgages, which reflects the short-term nature and the speed of the lending.
Most lenders will lend up to 70-75% of the property’s value (the loan-to-value ratio, or LTV), though some will go higher depending on the deal. The average LTV across completed bridging loans in 2025 was 55%.
What Are the Different Types of Bridging Loan?
Not all bridging loans work the same way. There are a few key distinctions worth understanding before you start.
Open and Closed Bridging Loans
A closed bridging loan has a fixed repayment date. This might be the completion date of a property sale you’ve already agreed, for example.
Because lenders have more certainty about when they’ll be repaid, closed loans often come with better rates.
An open bridging loan doesn’t have a set end date, though lenders will still set a maximum term, usually 12-24 months. These are useful when your timeline isn’t certain yet. You’ll pay more for this flexibility, as the lender is taking on more uncertainty.
First and Second Charge Loans
A first charge bridging loan is secured against a property that has no other debt against it. If you own a property outright and use it as security, or if the bridge is the only loan on the property, it’s first charge.
A second charge applies when there’s already a mortgage on the property. The bridging lender takes a second charge, sitting behind the mortgage lender in priority. Second charge loans carry slightly higher rates because the lender’s security position is weaker.
Worth knowing too is the question of regulation.
If the bridging loan is secured against a property you live in (or plan to live in), it falls under Financial Conduct Authority (FCA) regulation. Regulated bridging loans offer extra consumer protections and have a maximum term of 12 months.
Loans for investment or business purposes are generally unregulated. In 2025, unregulated bridging loans accounted for 55% of all completions, with regulated loans making up the remaining 45%, according to Bridging Trends data.
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When Are Bridging Loans Used?
Bridging finance covers a broad range of situations, and the number of scenarios where it makes sense has grown considerably over the years.
Breaking a Property Chain
Preventing a chain break accounted for 23% of all bridging loans in Q2 2024, according to Bridging Trends data – up from 19% the previous quarter, reflecting how often buyers find themselves stuck. You’ve found a home you want to buy but you haven’t sold your current property yet.
A bridging loan lets you complete the purchase without waiting for your sale to go through.
Once your existing home sells, you use the proceeds to repay the bridge.
Say you want to buy a house for £550,000 but your current home hasn’t sold yet. A bridging loan lets you complete the purchase, then repay it when your sale completes, keeping your move on track without losing the property you want.
Auction Purchases
When you buy at auction, you usually need to complete within 28 days – a timeline that standard mortgages cannot meet. Demand for auction finance rose to 14% of all bridging loans in Q2 2024, up from 9% the previous quarter, driven by an increase in available lots at residential property auctions.
An auction bridging loan can be arranged before you even walk into the auction room, giving you the confidence to bid knowing your finance is in place.
Renovation and Development
Many properties aren’t in a condition that mortgage lenders will accept.
If a property lacks a working kitchen or bathroom, has structural issues, or is classed as uninhabitable, most high street lenders won’t consider it. A bridging loan lets you buy and refurbish the property, then refinance to a standard mortgage once the work is done and the property is mortgageable.
Developers also use bridging loans to buy land while awaiting planning permission, then move to development finance or sell the site once permission is granted.
Commercial and Business Uses
Bridging finance isn’t limited to residential property.
Business owners use commercial bridging loans to buy commercial premises quickly, to cover a short-term cash flow gap, or to fund an urgent business purchase. The same principles apply: fast access to capital, secured against property, repaid over a short term.
How Much Does a Bridging Loan Cost?
Bridging loans cost more than long-term mortgages, and it’s worth understanding exactly what you’re paying before you commit.
Interest: Monthly, Rolled Up, or Retained
Interest is charged monthly, and the rate depends on factors including your loan-to-value ratio, the type of property, your exit strategy, and the strength of your overall application.
There are three main ways to handle interest payments, what you get offered will depend on the lender.
With monthly serviced interest, you pay each month as you go, keeping the total loan amount stable.
With rolled-up interest, the interest is added to the loan and paid in full at the end.
With retained interest, the lender calculates the expected interest upfront and deducts it from the loan before releasing funds.
Each option suits different circumstances, and a good broker will help you work out which makes the most sense for your situation.
Getting Approved for a Bridging Loan
Bridging lenders assess applications differently from mortgage lenders, which is part of what makes them accessible in situations where standard lending doesn’t work.
What Lenders Look For
The two things that matter most are the property being used as security and your exit strategy (how you plan to repay the loan).
If both of those are solid, many other factors become less of a barrier.
You need to be at least 18, though most lenders prefer borrowers over 21. UK residency is standard, though some lenders will consider British expats and foreign nationals. Borrowing through a limited company is also possible, provided it’s UK-registered.
Almost any property type can be used as security.
Residential houses and flats, commercial premises, mixed-use buildings, land, and even properties needing significant renovation can all qualify. This is a notable difference from standard mortgage lending, where the property must usually be in a habitable condition to be accepted.
Your credit history matters less than it would with a standard mortgage.
Good credit never hurts, but lenders are more focused on whether the security property is sufficient and whether your exit strategy is credible. People with past credit problems can and do get bridging loans, provided the overall case stacks up.
Related reading: Can You Get a Bridging Loan to Buy a House?
Planning Your Exit Strategy
Your exit strategy is the single most important part of a bridging loan application. Lenders need to see a clear, realistic plan for how you’re going to repay.
Selling a property is the most common exit. The lender will look at the property’s value, local comparable sales, and your realistic timeline for completing a sale. Having a contingency in mind in case the sale takes longer than expected is also a good idea.
Refinancing to a standard mortgage is another widely used exit.
If your plan is to renovate a property and then remortgage it, lenders will want to see that you’re likely to meet the qualifying criteria for the mortgage once the work is done. They’ll look at the expected post-works value and whether you can service the new mortgage payments.
Business income or investment returns can also work as an exit, but you’ll need solid evidence of expected receipts and good reasons why the timeline is realistic.
Whatever your exit, having a backup plan is sensible. Delays happen, and knowing what you’d do if your primary plan doesn’t go to schedule will strengthen your application.
Read more: How quickly can you get a bridging loan?
Benefits and Risks
It’s worth being clear-eyed about both sides before deciding whether bridging finance is right for you.
The main advantages are speed and flexibility.
You can access funds much faster than through conventional lending, and lenders will consider property types and circumstances that mortgage providers won’t. The interest payment options also give you some control over cash flow during the term.
The downsides deserve equal attention; interest rates are higher than mortgages, and fees can add up.
If your exit strategy fails and you can’t repay on time, you risk losing the property used as security. The short loan term gives you less room to recover if things don’t go to plan.
Bridging loans are designed to solve a short-term problem; they’re not suitable for long-term borrowing, or for anyone who doesn’t have a credible repayment plan in place.
Any responsible broker will make sure you understand what you’re taking on before you commit, and for regulated loans, the FCA requires that borrowers receive clear disclosure of the risks involved.
Next Steps
If bridging finance looks like it could work for your situation, the first thing to do is speak to a specialist broker who knows this market well. Bridging loans are more complex than standard mortgages, and the right broker will know which lenders are most likely to say yes to your application and at what cost.
Before that conversation, it helps to have a clear picture of the property involved, how much you need to borrow, your timeline, and how you plan to repay. The stronger your exit strategy, the better your chances of a good outcome.
As with any secured borrowing, take your time, get proper advice, and make sure you understand all the costs before you commit.
If you’d like help finding an experienced bridging loan broker, we can connect you with a specialist. Just give us a call on 0330 030 5050.
Frequently Asked Questions
A bridging loan is a short-term secured loan, lasting between 3 and 24 months, used to cover a temporary gap in funding. It’s most often used in property transactions when you need funds quickly and a standard mortgage either can’t be arranged in time or isn’t suitable. You repay the loan in full at the end of the term, along with interest and fees.
Many bridging loans complete within 7 to 14 days from the initial application, and straightforward cases can sometimes be faster. Speed depends on how quickly valuations and legal work can be completed. This is considerably faster than a standard mortgage, which can take six to eight weeks or more.
Yes, it is possible. Bridging lenders place more emphasis on the property security and your exit strategy than on your credit history. That said, significant adverse credit can affect the rate you’re offered or the lenders willing to consider your case. A specialist broker will know which lenders are most flexible in this area.
Read more: Can you get a bridging loan with bad credit?
The amount you can borrow depends on the value of the property used as security and the loan-to-value ratio the lender will accept. Most lenders will go up to 70-75% LTV, though some offer higher. The minimum most specialist brokers work with is around £150,000, and there’s no fixed upper ceiling.
Your exit strategy is your plan for repaying the bridging loan at the end of the term. Lenders focus heavily on this when assessing your application. Common exits include selling a property, refinancing to a standard mortgage, or receiving proceeds from a business or investment. Without a credible exit strategy, approval is unlikely.
Related reading: How to Get a Bridging Loan
Yes. Limited companies registered in the UK can apply for bridging finance. This is fairly common among property developers and investors who hold property in a corporate structure. The application process and criteria are broadly similar to personal borrowing, though the legal and structuring requirements can be more involved.
Almost any UK property can be used, including residential houses and flats, commercial premises, mixed-use buildings, land, and properties in poor condition or needing renovation. This is broader than standard mortgage lending, where property condition and type are more restricted. The lender will commission an independent valuation regardless of property type.
