Bridging loans
Fast, short-term finance secured on property. The right tool for auctions, chain breaks, refurbishments and development exits, used carefully and with a clear exit strategy.
A bridging loan is short-term property finance, typically 3 to 18 months, secured against property. It is the right tool when you need to move fast, when a property is not yet mortgageable in its current condition, or when you need to break a chain. It is the wrong tool when there is no clear exit strategy. We arrange bridging through specialist lenders, model the full cost (interest, arrangement fee, legal, exit fee), and tell you in writing whether the deal stacks. If it does not, we say so before you draw down.
When bridging makes sense
Four scenarios where bridging is genuinely the right tool. If your case looks like one of these, the maths often stacks. If it does not, we will tell you.
Auction purchase
Auction completion is typically 28 days. Standard mortgages take 6 to 10 weeks. Bridging closes the gap, then a term mortgage refinances out within months.
Chain-break finance
Your buyer has fallen through but the property you are buying will not wait. Bridging buys the new home, you complete the sale of the old home, then refinance.
Light or heavy refurbishment
A property is unmortgageable in its current state (no kitchen, no bathroom, structural work needed). Bridging funds the purchase plus the works, then a term mortgage refinances on the higher value.
Development exit
Your development loan is expiring but the units have not all sold. Development exit bridging gives you breathing room (typically 6 to 12 months) on a lower rate while you complete sales.
How a bridging loan works in practice
Bridging is property-secured short-term finance. The lender takes a first or second legal charge over a property (the security), advances funds, and gets repaid in a single lump sum at the end of the term, normally from the sale of the property or from refinancing onto a term mortgage. Interest is usually rolled up monthly and added to the loan, paid in full at exit. Some bridging products allow serviced interest (paid monthly) which keeps the gross loan smaller.
Typical terms in 2026
- Loan size: £100,000 to £25 million-plus, depending on lender and security.
- Loan-to-value (LTV): up to 75 percent on first-charge unregulated bridging, up to 70 percent on regulated, up to 75 percent of post-works value on refurbishment products.
- Term: 3 to 18 months typical, with some lenders going to 24 months.
- Rate: roughly 0.7 to 1.2 percent per month for first-charge unregulated bridging, slightly higher for regulated, second-charge or higher-LTV products.
- Arrangement fee: 1.5 to 2 percent of the loan, paid up front or rolled into the loan.
- Exit fee: 0 to 1 percent on some products, none on most.
- Legal and valuation: paid up front, typically £1,500 to £5,000 combined depending on property complexity.
Regulated and unregulated bridging
Bridging is regulated when the borrower or an immediate family member will live in the property as a main residence. Most bridging loans are unregulated commercial finance: BTL purchases, auction investment, refurb-to-let, development exit. Regulated bridging is governed by the Financial Conduct Authority (FCA) under MCOB rules; unregulated bridging is not. Both are arranged through the same lender pool but with different documentation, suitability requirements, and consumer protections.
The exit strategy is everything
A bridging loan is only as good as its exit. Two exit routes dominate. The sale exit: you sell the property within the term and repay the loan from the proceeds. The refinance exit: you refinance the bridging loan onto a term mortgage (residential or BTL), which redeems the bridging facility. We test the exit before we put the case to a lender. If the term mortgage will not be available at the end of the bridging period (because of income, property condition, or expected market movement), we will not arrange the bridging loan.
Worked example, refurbishment
Investor buying a 2-bed flat at auction for £180,000, with £30,000 of works needed (new kitchen, new bathroom, redecoration) to bring it to mortgageable condition. Estimated post-works value (PWV) £240,000. A refurbishment bridging facility at 75 percent of PWV is £180,000, enough to cover the purchase outright with the works funded from cash. Term 6 months, rate 1.0 percent per month, arrangement fee 2 percent. Total interest cost: roughly £10,800. Total arrangement fee: £3,600. Plus £3,000 legal and valuation. Total cost of finance: roughly £17,400 over 6 months. The case stacks if the post-works property will refinance onto a BTL mortgage at £240,000 with a rental income that supports the lender stress test.
Worked example, chain break
Family selling their home for £450,000 and buying for £500,000. The buyer of the £450,000 home has fallen through. Vendor of the new home will not wait. A regulated bridging loan of £350,000 secured against the new property completes the purchase. The family then sells the old home, repays the bridging in 4 months, and the new home moves to a normal residential mortgage. Total bridging cost: roughly £15,000 to £20,000 depending on rate and fees. Compared to losing the new home and starting again, often the cheaper option, but not always. We model both before recommending.
What can go wrong
Sale takes longer than expected and the bridging term expires; lenders may extend at a higher rate or charge default interest. Property does not reach the post-works valuation expected; the refinance LTV breaks. Term mortgage criteria change between drawing the bridging and exiting it. We model these scenarios up front and only arrange bridging where the exit is genuinely robust.
How Major Money Matters helps
Bridging is a tool, not a strategy. We arrange it where the case stacks, and we say so where it does not.
Test the exit before we arrange the loan
A bridging loan with no clear exit is a problem in the making. We model the term mortgage exit (or sale exit) before drawing.
Source from a wide specialist lender pool
Bridging is a relationship market. We work with first-charge, second-charge, refurbishment, and development exit lenders.
Model the full cost of finance
Interest plus arrangement plus exit plus legal plus valuation. We tell you the all-in number before you commit.
Arrange the term mortgage exit too
We line up the residential or BTL mortgage that takes out the bridging at the end. One adviser, both products.
Bridging loan questions we hear a lot
How quickly can a bridging loan complete?
Three to four weeks is typical. The fastest cases (clean security, clean borrower, simple legal title) can complete inside 10 to 14 days where the lender, valuer, and solicitors all move quickly. Auction purchases routinely close inside 28 days using bridging.
How much does bridging cost?
Roughly 0.7 to 1.2 percent per month interest, plus a 1.5 to 2 percent arrangement fee, plus legal and valuation costs of typically £1,500 to £5,000. On a 6-month £200,000 loan at 1 percent per month with a 2 percent arrangement fee, the all-in cost is roughly £19,000 to £21,000. Cheaper than missing the deal in many cases, more expensive than waiting for a normal mortgage in others. We model the comparison.
Is the bridging loan regulated by the FCA?
It is regulated when the borrower or an immediate family member will live in the property. Most bridging is unregulated commercial finance (BTL, investment, development). Both routes are arranged through similar lender pools but with different documentation and consumer protections.
What is an exit strategy and why does it matter?
It is the plan for repaying the loan in full at the end of the term. The two main routes are sale (selling the security or another property) and refinance (taking out a term mortgage that pays off the bridging). Without a robust exit, the bridging loan can become very expensive very quickly. We test the exit before arranging the loan.
Can I get a bridging loan if the property has no kitchen or bathroom?
Yes. Refurbishment bridging is designed exactly for properties that are not currently mortgageable. The facility funds the purchase, the works are completed, and the property refinances at the higher post-works value.
What happens if I cannot repay at the end of the term?
Lenders may extend the term at a higher rate, charge default interest, or take possession of the property. Default interest can be 2 to 3 percent per month. We only arrange bridging where the exit is robust, and we line up the term mortgage exit alongside the bridging itself.
Can I bridge a buy-to-let purchase?
Yes. Bridging is commonly used to fund BTL purchases at auction, refurb-to-let projects, and limited-company SPV (special purpose vehicle) purchases. The exit is usually a BTL term mortgage on the post-works value or rental yield. Some buy-to-let mortgages are not regulated by the Financial Conduct Authority.
Related
Where bridging usually fits in the wider Major Money Matters product set.
Specialist mortgages
Adverse credit, complex income, contractor, expat, retired and unusual property cases. The full specialist hub.
See specialistBuy-to-let mortgages
First-time landlord, limited company SPV, portfolio, HMO, holiday let, let-to-buy. The BTL hub.
See buy-to-letHow it works
Five steps from first call to mortgage offer to keys. The Major Money Matters process for residential and specialist cases.
See processWhat our clients say
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Talk to us about a bridging loan
A quick 15-minute call tells you whether the case stacks, what the all-in cost is, and what the term mortgage exit looks like. No pressure, no panel, no call centre.
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