Bridging Loans and Bridging Finance
A bridging loan is short-term, property-secured funding that lets you act quickly when a mortgage is too slow, cannot fund the asset or will not stretch to the required term. We arrange bridging finance across the UK for investors, developers, landlords and businesses.
What is a bridging loan?
A bridging loan is a short-term secured loan against property, used to bridge a gap in funding. It typically runs from one month to 24 months, charges monthly interest rather than annual interest, and is repaid in one lump sum when the exit event happens: a sale, a remortgage or the completion of a development. Unlike a mortgage, it does not amortise month by month. The interest is usually retained or rolled up so there are no monthly payments to service.
Bridging finance is the tool you reach for when speed or flexibility matters more than rate. The average market completion sits at around 55 days (Bridging Trends, 2025), and the faster cases with clean security run inside two to three weeks. A mainstream mortgage rarely moves that fast, cannot fund unmortgageable or uninhabitable stock, and will not serve the commercial or development uses where a bridge is standard.
The two types most commonly discussed are open bridging loans and closed bridging loans. A closed bridging loan has a confirmed, dated exit such as an exchanged sale or a mortgage offer in place. An open bridging loan does not yet have a dated exit but one is agreed in principle, such as a property being marketed. Closed loans are generally priced more tightly because the exit certainty is higher. Open loans are still fundable but lenders underwrite the exit more carefully.
On regulation: a bridging loan secured on a property the borrower or a close family member lives in or will live in is a regulated bridging loan and sits inside the FCA regulated-mortgage perimeter. We are a finance arranger and introducer, not an FCA-authorised lender, so we refer regulated cases to a firm that holds the appropriate permissions. Bridging arranged for investors, developers or businesses on investment or commercial property is unregulated lending and we arrange that directly.
- First charge bridging: the bridge is the only or senior debt on the property. Usually the cleanest structure and the best pricing.
- Second charge bridging: the bridge sits behind an existing first-charge mortgage. We need the first lender's consent and work to the combined loan-to-value.
- Regulated bridging: secured on a home the borrower or family member occupies. Referred to an FCA-authorised firm.
- Unregulated bridging: secured on an investment or commercial asset. We arrange this directly.
- Residential bridging: the security is a house or flat, whether the borrower occupies it or not.
- Commercial bridging: the security is an office, retail unit, industrial building or other commercial asset.
Indicative terms
- Indicative monthly ratearound 0.88% per month (Bridging Trends, 2025 average)
- Typical LTVaround 60% on average; up to 75% on strong cases (indicative)
- Average term12 months (Bridging Trends, 2025); commonly 1 to 24 months
- Average completionaround 55 days; faster cases inside 2 to 3 weeks
- Interest optionsretained, rolled up or serviced monthly
- Charge typesfirst charge or second charge
- Loan book (ASTL members)around 10.3 billion (ASTL, 2025)
Indicative only. Terms vary by lender, scheme and borrower and are not an offer of finance.
Who it suits
- Property investors buying at auction, buying before selling or buying below-market stock a mortgage will not fund
- Residential and commercial property purchasers who need to complete faster than a mortgage allows
- Developers needing short-term finance to start, complete or exit a project
- Landlords refurbishing properties before refinancing onto a buy-to-let mortgage
- Businesses and experienced borrowers raising capital quickly against commercial property
- Anyone with a strong exit strategy and a short-term funding gap that a mortgage cannot fill
Discuss bridging finance
A view on fundability within one working day.
How a bridging loan works, step by step
Enquiry and initial structure
We discuss the asset, the purpose, the exit and the timeline. Within that first conversation we settle the key structure: first or second charge, open or closed, regulated or unregulated, and the gross loan needed. We also model the gross-to-net, that is, how much of the gross facility reaches you after retained interest and fees come out, because borrowers often focus on the headline figure and are surprised by the net release.
Decision in Principle
Once the structure is clear we approach the lenders most likely to price it competitively and move at the pace you need. We hold relationships with lenders such as Together, Shawbrook, LendInvest, MT Finance and United Trust Bank, as well as a broader panel of specialist short-term lenders. A Decision in Principle usually comes back within 24 to 48 hours and confirms the indicative terms we can put to you before any cost is incurred.
Valuation and legal
The lender instructs an independent RICS valuer to inspect the security and confirm open market value. Both parties instruct solicitors simultaneously so legal work and valuation progress in parallel. This is where most of the elapsed time sits, and instructing both immediately on the Decision in Principle is the single biggest lever on speed. Exit strategy evidence, such as the agreed sale, the remortgage Decision in Principle or the development appraisal, is submitted alongside the legal pack.
Offer and drawdown
Once the valuation is received and the legal work is complete the lender issues a formal mortgage offer. Solicitors complete simultaneously on both sides, the loan is drawn down into the solicitor's account and funds are released to complete your transaction. If interest is retained or rolled up, it has already been deducted from the gross facility so there is no payment to make during the term.
Repayment
The bridge is repaid in full in one lump sum at the exit event: the completion of a sale, the drawdown of a refinance or the scheduled redemption date. Early repayment is possible, and many lenders charge no early repayment penalty, so a clean, fast exit simply stops the interest clock. Where a term extension is needed we arrange that before the deadline, not after.
Eligibility for a bridging loan
Bridging lenders underwrite the security and the exit, not income in the way a mortgage lender does. There is no minimum income requirement on most unregulated cases. What matters is the quality of the security, the credibility of the exit strategy and the borrower's track record. Adverse credit, including CCJs and missed payments, does not automatically disqualify a case, though it affects pricing. Limited companies, SPVs, trusts and offshore entities can borrow in most structures. First-time investors can borrow, usually at a lower LTV. Previous development or investment experience is valued by lenders for more complex cases. The property does not have to be immediately habitable or mortgageable, which is a significant difference from a mainstream mortgage.
How much can you borrow?
Bridging loans are sized as a percentage of the security value, expressed as loan-to-value. The market average sits at around 60% LTV (Bridging Trends, 2025), but the practical range on first-charge unregulated cases runs from around 50% on complex or commercial security to around 75% on clean light-refurbishment residential cases. Second-charge bridging works to the combined LTV across both charges. Minimum loan sizes typically start around 25,000 to 50,000 and no published upper limit exists, though very large cases above 25 million are placed with a smaller group of lenders. We model the gross-to-net for every case because the day-one net loan, the figure that actually reaches you, can be meaningfully lower than the gross facility once retained interest and fees are deducted.
What does a bridging loan cost?
The main cost is the monthly interest, which on the 2025 Bridging Trends data averages around 0.88% per month. That is not an annual rate: at 0.88% per month you pay around 10.56% on a full 12-month term, but most bridges run for less. Interest is usually retained out of the gross facility or rolled up and settled on redemption, so there is no monthly cash drain. Beyond interest, expect an arrangement fee from the lender, typically 1% to 2% of the gross loan; a RICS valuation fee that depends on the property value and location; legal fees for both you and the lender; and on second-charge cases, a fee to obtain the first lender's consent. We set out all these costs in writing as part of the indicative terms before you commit to anything, so you see the total cost and the net loan figure together.
Bridging finance compared to a mortgage
A mortgage is cheaper per year, but it is not built for the problems a bridge solves. A mortgage takes months not weeks; it will not lend on an unmortgageable, uninhabitable or non-standard property; it will not serve an auction purchase with a 28-day completion; and it will not work for a commercial, development or mixed-use asset outside narrow criteria. A bridge is more expensive but it funds what a mortgage will not, moves at the pace required and is repaid as soon as the exit lands, so the higher rate compounds over weeks or months rather than years. Used correctly, with a confirmed exit and a realistic term, a bridge is a precision tool rather than an expensive one.
Bridging Finance: common questions
How does a bridging loan work?
You borrow short-term against property, with the interest usually retained or rolled up so there are no monthly payments. The loan is repaid in full at a defined exit event: the sale of a property, a remortgage or the completion of a development. The typical term is 12 months and the typical completion time is around 55 days.
How much is a 200k bridging loan?
On the 2025 market average of around 0.88% per month, a 200,000 bridging loan would cost around 1,760 per month in interest, or around 21,120 over a full 12-month term. Add an arrangement fee of typically 1% to 2% (2,000 to 4,000), valuation and legal fees. In practice most bridges are repaid before the full term so the actual interest cost is lower. These are illustrative figures, not an offer.
Is a bridging loan a good idea?
A bridge is the right tool when speed, flexibility or the nature of the asset mean a mortgage is not an option. It is more expensive per year than a mortgage but you are paying for what a mortgage cannot do. The risks are a failure to exit, which leaves the loan running at an expensive rate and, in the worst case, threatens the security. We only arrange bridges where a clear, credible exit is in place from day one.
What are the disadvantages of a bridging loan?
The main disadvantages are the cost (monthly interest is significantly higher than a mortgage rate), the risk of exit failure if your sale falls through or your remortgage is delayed, and the fees involved in getting it set up. If the exit does not land on time the loan carries on at the same rate and you may need to extend the term or refinance, both of which cost more. The property may be repossessed if the loan is not repaid.
What are the downsides of a bridging loan?
Cost and exit dependency. Monthly interest of around 0.88% (2025 average) is higher than a term mortgage rate, and the fees, such as arrangement, valuation and legal, add to the total. If the exit slips, such as a sale falling through or a remortgage being delayed, the loan keeps running. We plan the exit and the fallback before anything is drawn, and we set terms long enough to absorb a delay without forcing a rushed decision.
Do you pay bridging loans back monthly?
Usually not. Interest is most commonly retained out of the gross facility at the outset or rolled up and added to the balance, so you make no monthly payment during the term. The whole loan, capital plus interest, is repaid in one lump sum at the exit event. Some lenders offer a serviced option where interest is paid monthly, which reduces the gross-to-net gap but requires monthly cash flow.
How much deposit do I need for a bridging loan?
Bridging lenders work to a loan-to-value, not a deposit in the mortgage sense. On a purchase the difference between the loan amount and the purchase price is your contribution. At the market average of around 60% LTV you contribute 40% of the value plus fees. On strong cases the LTV can be higher, on complex security it may be lower. If you own other unencumbered property it can sometimes be cross-charged to reduce or eliminate your cash contribution.
What is the minimum deposit for a bridging loan?
There is no fixed minimum, but at 75% LTV, the indicative ceiling on light-refurbishment cases, you contribute 25% of the security value plus fees. On commercial or higher-risk security the contribution is higher. We model the gross-to-net so you know exactly what you need to bring in before the case is presented to a lender.
What is the typical interest rate on a bridging loan?
The 2025 Bridging Trends average is around 0.88% per month. Prime, low-LTV first-charge cases can achieve lower indicative rates. Second-charge, higher-LTV, adverse-credit or complex cases are priced higher. Rates are quoted monthly, not annually, and the right comparison is total cost across the expected term, not the headline percentage.
What is the shortest bridging loan you can get?
Most lenders offer a minimum term of one month, though practical minimums often sit at three months given the time to set up the facility. A 28-day auction completion is achievable where the groundwork, such as the valuation and legals, is done in advance. There is no regulatory minimum on term for unregulated bridging.
How fast can you get a bridging loan?
The market average completion is around 55 days, but well-prepared cases with clean security, a ready valuation and straightforward legals can complete inside two to three weeks. The biggest lever on speed is instructing the valuation and the solicitors immediately after a Decision in Principle is issued, rather than waiting for a formal offer first.
Discuss bridging finance
Send us your scheme and we will come back with a view on fundability and likely terms within one working day.