Bridging loans at a glance
What is a bridging loan?
Bridging loans are short-term loans secured against property. They can be used to bridge a temporary funding gap, for example if you need to buy a new home before selling your current one. You’ll also need a clear plan for repaying the loan, known as an exit strategy.
How do bridging loans work?
You borrow money for a short period, using a property or properties as security. You then repay the bridging loan, plus interest and fees, when your exit strategy is completed – for example when a property is sold or longer-term finance like a mortgage is arranged. If you want to compare your options, get a bridging loan quote.
How much can I borrow with a bridging loan?
You can typically borrow between £50,000 and £10 million with a bridging loan. Bridging loans are often available up to around 75% loan-to-value (LTV). In some cases, you may be able to borrow up to 100% of the purchase price if you can provide additional security. The amount available will depend on the lender and your circumstances.
A specialist bridging loan broker can compare lenders and the borrowing options available to you.
How much does a bridging loan cost?
Bridging loans are usually more expensive than standard mortgages. Your total cost will depend on the interest rate, fees and how long you have the loan.
The exact fees depend on the lender and your circumstances. These could include:
- Arrangement fees
- Administration/redemption fees
- Valuation fees
- Legal fees
- Broker fees
Use our Bridging Loan Calculator to estimate the interest, fees and total cost.
What types of bridging loans are there?
There are different types of bridging loan and which is suitable will depend on your circumstances. These include:
- Open and closed bridging loans – the main difference is whether you have a fixed repayment date.
- First and second charge bridging loans – this depends on whether another loan, such as a mortgage, is already secured against the property.
Can I use a bridging loan to buy a house?
Yes, a bridging loan can be used to buy a house if you need to complete before your existing property has sold. It may also be an option if your property chain breaks down or you need to complete quickly.
You’ll need a clear exit strategy for repaying the loan, such as selling your existing property or arranging longer-term finance.
Bridging loans: How they work, costs & when to use one
Bridging loans explained in simple terms, including how they work, costs, risks and when they may be suitable.
Read our guide to bridging loans >
Bridging loan calculator
Use our free bridging loan calculator to estimate the interest, fees and total cost of a bridging loan based on your circumstances.
Use the bridging loan calculator >
How to get a bridging loan quote
Submit an enquiry form or if you want to speak to a specialist broker immediately call Fluent Money on 01204 899 584. They are open Monday – Thursday 09:00 – 19:00 and Friday 09:00 – 17:00 and Saturday 09:00-14:00.
Why use a bridging loan broker?
A specialist bridging loan broker can compare options from different lenders, explain the rates, fees and terms available and help you understand which products could be suitable for your circumstances.
A broker can also help manage the application process and explain whether another type of borrowing may be more suitable.
Using a broker can be particularly useful with bridging finance because lenders’ criteria, fees and lending limits can vary.
Do bridging loan brokers charge?
Many bridging loan brokers charge an upfront advice fee. Fluent Money does not charge an initial advice fee, so you can get an indicative quote without paying an upfront fee.
If you decide to go ahead with a bridging loan, a broker fee will be payable on completion. Always check what fees are payable and when before proceeding.
