What Is a Bridging Loan? A Plain-English Guide
The basics of short-term property finance, explained without the jargon.
A bridging loan is short-term finance secured against property, designed to "bridge" a gap — most often the gap between buying one property and selling another, or between an auction win and arranging longer-term finance.
Unlike a standard mortgage, bridging loans are built for speed. Where a mortgage application might take six to eight weeks, a bridging loan can complete in days when the case is straightforward.
The most common scenarios we see are: buying a new home before your current one has sold, completing an auction purchase within the 28-day deadline, funding a light refurbishment before refinancing onto a term mortgage, and raising quick capital against property for a business opportunity.
Bridging loans are priced monthly rather than annually, typically between 0.55% and 1.05% per month depending on loan-to-value and case complexity, plus an arrangement fee usually around 2%.
Lenders will want a clear exit strategy — usually a property sale or a remortgage onto a standard mortgage — along with a valuation of the security property and standard identity/AML checks.
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