Bridging finance

What is bridging finance and when is it used?

A bridging loan is short-term borrowing secured on property, typically lasting from a few months up to around two years, used to 'bridge' a gap until longer-term money arrives. It is most common in property deals where speed matters or a standard mortgage isn't yet available. Bridging is usually priced monthly and costs more than a mortgage, so it only makes sense with a clear, credible way to repay it.

  • Short-term and secured on property
  • Interest is usually quoted monthly, not annually
  • Lenders focus on the property and your exit strategy
  • Some bridging is FCA regulated, some is not

Last reviewed October 2026

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

When bridging finance makes sense

Bridging is a specialist tool — not right for every situation, but useful when speed or flexibility matters more than cost. Common uses include:

  • Auction purchases — auctions often require completion within 28 days, faster than many mortgages can be arranged.
  • Chain breaks — buying your next home before your sale completes, so a slow buyer doesn't cost you the purchase.
  • Refurbishment — buying a property that is uninhabitable or unmortgageable, funding the works, then refinancing onto a standard mortgage.
  • Development exit — repaying more expensive development finance while completed units are sold.
  • Commercial property — buying commercial or semi-commercial premises faster than a commercial mortgage allows.
  • Raising capital quickly — releasing equity from an unencumbered property for business cashflow, tax bills or time-sensitive opportunities.

How bridging loans are priced

Bridging interest is usually quoted as a monthly rate rather than an annual one. Rates vary widely depending on the loan to value, property type, loan size and borrower profile. On top of interest there are typically arrangement fees, valuation fees and legal fees, and sometimes an exit fee.

Interest can be paid monthly, rolled up and repaid at the end, or 'retained' — deducted from the loan upfront. Rolled-up and retained interest mean no monthly payments but reduce the amount you actually receive or increase what you owe, so compare the total cost of the loan over the period you expect to need it.

Why the exit strategy matters

Your exit strategy is how you will repay the bridging loan — typically by selling the property or refinancing onto a long-term mortgage. Lenders want a credible, evidenced exit before they lend, because the whole loan falls due at the end of a short term.

If the exit is delayed — a sale falls through, or a refinance is declined — the costs can escalate quickly through extension fees or default interest. Building in time and having a back-up plan is essential.

Regulated and unregulated bridging

Bridging loans secured on your own home, or a property you or a close family member will live in, are regulated by the Financial Conduct Authority. Commercial and investment bridging is typically unregulated, which means fewer consumer protections. Check which applies before you proceed.

Alternatives to consider

If you don't need the money quickly, a standard mortgage, remortgage or secured loan is usually cheaper. A regulated mortgage broker or independent financial advice firm can help you compare bridging against longer-term options, and MoneyHelper (moneyhelper.org.uk) offers free, impartial guidance on borrowing against your home.

Bridging finance guides

Guide
What is bridging finance?

How short-term secured lending works, and what it costs.

Guide
Bridging loan exit strategies

How a short-term loan gets repaid, and why lenders care.

Common questions

What is a bridging loan?

A bridging loan is a short-term, secured loan used to bridge a gap in funding. Bridging loans are commonly used in property transactions where speed is essential or a long-term mortgage isn't yet available.

How quickly can bridging finance be arranged?

Bridging is generally faster than a mortgage. Straightforward cases can sometimes complete within a couple of weeks; complex cases, or those needing detailed valuations and legal work, take longer.

What is an exit strategy, and why does it matter?

Your exit strategy is how you'll repay the bridging loan — typically by selling the property or refinancing onto a long-term mortgage. Lenders require a credible, evidenced exit strategy before agreeing to lend.

How much does bridging finance cost?

Bridging loans are typically priced monthly rather than annually. Rates vary widely depending on loan to value, property type, loan size and borrower profile. There are also arrangement fees and potentially valuation, legal and exit fees, so compare the total cost of finance.

Can I get bridging finance with bad credit?

Bridging lenders are generally more flexible than high street mortgage lenders because they lend primarily against the property and the exit strategy. Adverse credit is usually considered case by case.

Is bridging finance regulated?

It depends on the use. Bridging loans secured on your main residence, or a property you intend to live in, are regulated by the FCA. Commercial or investment bridging is typically unregulated.

What happens if I can't repay the bridging loan on time?

The lender may agree an extension, usually at extra cost, or charge default interest. If the loan still isn't repaid, the lender can take steps to repossess and sell the property. This is why a realistic exit and a back-up plan matter.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

Important: This page is general information, not financial advice or a personal recommendation. Product features and eligibility vary by provider — check the provider's own terms before you buy or apply.