Bridging Loans: Speed & Certainty
How short-term finance is used to break chains, buy at auction and fund refurbishment, and how to plan the exit.
- The main uses of bridging finance in 2027
- How the costs and the risks work
- A fictional, illustrative case study
What is a bridging loan, and when does it make sense?
A bridging loan is short-term secured finance, usually for a few months up to two years, designed for situations where speed and certainty matter more than the interest rate. Common uses include breaking a property chain, completing an auction purchase within 28 days, funding works before refinancing, and raising funds while a sale goes through.
Funds can often be arranged in weeks rather than months. Lenders focus on the security property and, above all, on your exit strategy: how and when the loan will be repaid.
The main routes in
- Chain-break bridging. Buy your next home before your sale completes. Where the loan is secured on your home it is FCA-regulated.
- Auction finance. Fast, certain funding to meet an auction's completion deadline.
- Refurbishment bridging. Fund works, including energy upgrades, then refinance onto a standard mortgage once the property is improved and let or sold.
- Conversions. Short-term funding to convert commercial buildings into homes, subject to planning or permitted development rules.
What's Changing In 2027
Regulated bridging has grown fast as more homeowners use it to protect a purchase while a sale completes. The FCA's 2026 mortgage rule review proposed allowing regulated bridging loans to run for up to 24 months, giving borrowers more time to complete their exit. Lenders now compete on speed, flexibility and support through to refinance, not just on rate.
With Bank Rate at 3.75% (September 2026) and markets uncertain, build a realistic margin for delay into any exit plan.
How the numbers work
Bridging loans are secured on property, typically at up to 70–75% loan-to-value. Interest is charged monthly and is often retained or rolled up, so nothing is paid until the loan is repaid, although you are then borrowing the interest too. Expect an arrangement fee, valuation and legal costs and sometimes an exit fee. Compare the total cost, not just the monthly rate.
Risks worth understanding
Bridging is a powerful tool, but it is not cheap money and it depends on your exit happening on time. If the sale or refinance is delayed, costs rise and default interest can apply. The property used as security can be repossessed if the loan is not repaid, so work through a realistic worst-case timeline before you commit.
Breaking a chain without losing the dream home: a fictional case study
David and Ola found the family home they wanted in Bristol, but their buyer pulled out three weeks before exchange. Their broker arranged a regulated bridging loan secured on their current home so they could complete on schedule. Their home sold four months later and the bridge was repaid in full from the proceeds, with interest rolled up so there were no monthly payments in the meantime.
Names, figures and circumstances are fictional and illustrative only. They do not represent an actual client of Our Mortgage Broker Limited.
Need to move fast on a property?
Speak to a CeMAP-qualified OMB adviser: whole-of-market advice, with any fee confirmed in writing before you proceed. Read more about bridging loans.
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- Development Finance in 2027
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Your home may be repossessed if you do not keep up repayments on your mortgage. Most buy-to-let and commercial mortgages are not regulated by the Financial Conduct Authority. Our Mortgage Broker Limited is authorised and regulated by the Financial Conduct Authority (FRN 944663). Registered in England and Wales, company no. 11358646. Registered office: 23 Berkeley Square, Mayfair, London W1J 6HE. There may be a fee for mortgage advice: we may charge up to 1% of the loan amount, and our typical fee is £500. Your fee agreement sets out the exact fee and when it is payable (at decision in principle, application or mortgage offer); fees are not refundable once due. We usually also receive commission from the lender. This guide is general information only and is not personal advice. Case studies are fictional, illustrative examples and do not represent real clients. Rates, tax and regulatory information are correct as at October 2026 and may change, including at the Autumn Budget on 28 October 2026.