What is a bridging loan? A plain-English guide
A bridging loan is fast, short-term finance secured against property. It’s used to move quickly, at auction, in a chain break, or to refurbish before refinancing, and is repaid from a clear exit, usually a sale or a longer-term mortgage.
How bridging loans work
Lenders secure the loan against property and price on two things: the loan-to-value and the strength of your exit. That’s why bridging can complete in days when a mainstream mortgage would take months.
Key takeaways
- Short-term: typically 1–24 months.
- Priced monthly (≈0.55–0.95%/mo), not annually.
- You need a credible exit before a lender will proceed.
When does it make sense?
Auction purchases, chain breaks, unmortgageable properties, probate, and buy-refurb-refinance projects are the classic cases. A broker matches your scenario to the right lender first time, so a decline doesn’t land on your file.
What does it cost?
Monthly interest plus an arrangement fee (usually 1–2%), a valuation, and legal costs. We disclose every figure in writing before you commit, and indicative quotes don’t affect your credit score.
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