Bridging Loan Guide

Short-term secured lending, usually between three and twenty-four months, used where timing matters more than cost: buying at auction, breaking a chain, or funding works before a property can be refinanced conventionally. Interest is materially higher than a term mortgage, and lending is granted against a credible exit: the sale or refinance that will repay it. No exit, no loan.

Bridging lenders look mainly at the security — its value and type — and the exit — how the loan will be repaid — along with the borrower's identity, credit history, experience for investors, and the purpose of the loan.

Yes. Businesses use bridging to buy premises fast, fund refurbishments, release capital from property, or bridge to a refinance once accounts, leases, or occupancy improve. Lending is assessed on the security and exit rather than trading history alone.

The costs of a bridging loan usually include monthly interest of around 0.6%-1.5%, a lender arrangement fee typically near 2%, valuation fees, and legal fees for both borrower and lender. Some loans also include an exit fee. Interest is charged only for the period the loan is outstanding.

Re-bridging is refinancing an existing bridging loan with a new bridging loan on the same property, usually from a different lender, to give the borrower more time to complete the original exit, such as a sale, a remortgage or the end of a development. The new loan repays the old one in full, including any rolled-up interest, exit fee and extension or default charges, and starts a new term with its own fees and interest. Because those costs are added to the debt, the loan to value rises with each re-bridge. It differs from an extension, which keeps the same loan with the same lender for longer, and from remortgaging, which moves the debt onto a term mortgage.