Fast, Flexible Short-Term Finance
Bridging Loans

Bridging loans can often be arranged within weeks, but the timeline depends on factors like the lender, your circumstances, and how promptly required information is provided. Speed also relies on the timely instruction of legal and valuation processes—delays can occur when these steps are not prioritized. Bridging loans are designed for quick turnaround, making them ideal for time-sensitive opportunities.

Tip: Ensure legal and valuation processes are instructed as early as possible to keep the process moving swiftly.

Yes! Bridging loans are perfect for auction purchases, where completion is often required within 28 days. They provide the funds needed upfront, enabling you to meet tight deadlines with confidence and without risking losing your deposit.

Tip: If you’ve shortlisted a property at auction, it’s wise to consult an experienced bridging loan advisor beforehand and arrange a decision in principle. This ensures you can bid confidently and act quickly after a successful bid.

You can typically borrow amounts ranging from £25,000 to several million pounds(no upper limit), with loans often capped at 70%–75% of the property’s value (Loan-to-Value or LTV). In some cases, you could borrow up to 100% by leveraging equity in another property you already own.

Tip: Use our Bridging Loan Calculator to get a quick estimate of your borrowing potential today!

No, bridging loans are not limited to property purchases. While they are often used to buy properties, they serve a wide range of purposes, including:

• Refinancing: For example, refinancing a completed development, allowing the borrower to sell units over time at the best price instead of resorting to a quick sale. This type of product is often referred to as a development exit loan by bridging lenders.
• Land Acquisition: Securing land to enhance or obtain planning permissions, later transition into a development finance product.
• Refurbishments: Funding light or heavy renovations, such as updating interiors or structural improvements, to increase property value or make it eligible for long-term finance.
• Releasing Equity: Unlocking capital tied up in properties to fund other ventures, investments, or business opportunities.

Example: A client used a bridging loan to secure a vacant commercial property and later refinanced it after renovations to release equity for an overseas business venture.

Explore detailed examples in our Bridging Loan Use Cases guide.

Borrowers have three main repayment options:

• Retained Interest: The total interest for the loan term is deducted upfront, so you receive the net loan amount. The full loan balance, including retained interest, is repaid at the end.
• Serviced Interest: You pay interest monthly during the loan term. This option requires the lender to be confident in the borrower’s ability to service the monthly interest payments.
• Part Retained, Part Serviced: A combination of both, where part of the interest is retained, and the rest is serviced monthly. This can provide flexibility in certain situations.

Tip: Most bridging lenders insist on retained interest for regulated residential properties.

The costs of a bridging loan can vary depending on the lender and the specifics of your loan. Common costs include:

• Monthly Interest Rates: Typically 0.5%–1.5%.
• Arrangement Fees: Usually 1%–2% of the loan amount.
• Exit Fee: Some lenders charge 1%–2% when the loan is repaid.
• Broker Fee: Usually 1%–2%. However, at Mortgage.One, we do not charge a broker fee as we are paid by the lender.
• Valuation and Legal Fees: These are essential to the loan process and vary by property type and complexity.

Tip: Always compare the total cost across lenders to find the best deal. Pay special attention to retained interest, as some lenders compound it, making a seemingly lower rate more expensive overall.

Bridging loans usually have terms ranging from 1 to 36 months. They are designed for short-term use to bridge financial gaps until long-term finance, such as a mortgage, is arranged or a property is sold.

Tip: Some lenders have a minimum term commitment, often around 3 months. Be sure to check this, especially if you plan to repay the loan earlier, as you may still be liable for the minimum term interest.