| Typical term | 1 to 24 months |
|---|---|
| Typical maximum LTV | Around 70–75% gross |
| Interest | Charged monthly; often rolled up or retained |
| Repayment | One lump sum from sale or refinance |
| Regulation | FCA-regulated only if secured on a home you or family live in |
What is a bridging loan?
A bridging loan is a short-term loan secured against property. It bridges a gap between needing money now and receiving it later, from a sale or a new mortgage. Terms usually run from a few months to two years.
Unlike a mortgage, you normally repay the whole loan in one go at the end. Lenders focus on the property's value and your exit plan more than your monthly income. That is why bridging can complete faster than a standard mortgage. See our bridging loans page for how OMB arranges them.
When are bridging loans used?
Bridging is used where speed or the property itself rules out a normal mortgage. Common uses include:
- Buying a new home before your current home sells (chain break).
- Buying at auction, where completion is often due within 28 days.
- Buying a property that is not yet mortgageable, such as one without a working kitchen.
- Refurbishment before refinancing or selling.
- Raising funds quickly for a business or tax bill, secured on property.
In prime central London, bridging is often used to secure a property while overseas funds or a sale are being arranged.
How much does a bridging loan cost?
Bridging is more expensive than a standard mortgage. Interest is quoted monthly rather than annually, and there are usually several fees. We do not quote rates here because they vary widely by case.
- Interest: charged monthly, and often rolled up or retained from the loan.
- Arrangement fee: commonly a percentage of the loan.
- Exit fee: some lenders charge one; many do not.
- Valuation and legal fees: you usually pay the lender's costs as well as your own.
Compare the total cost over the expected term, not just the monthly rate. Our bridging calculator gives an estimate.
How is interest paid on a bridging loan?
There are three common methods. Lenders will usually let you choose, subject to your circumstances.
- Rolled up: interest is added to the loan each month and repaid at the end.
- Retained: a set number of months' interest is deducted from the loan at the start.
- Serviced: you pay interest monthly, like an interest-only mortgage.
Rolled-up and retained interest reduce your monthly outgoings but reduce the net amount you receive. Interest also compounds if the loan runs longer than planned.
What is the difference between an open and a closed bridge?
A closed bridge has a fixed repayment date, usually because a sale has exchanged or a refinance is agreed. An open bridge has no fixed date, but you must still repay within the maximum term.
Closed bridges are seen as lower risk and may be cheaper. Open bridges suit buyers whose sale has not yet agreed, but lenders will want a credible exit and realistic sale price.
What is an exit strategy and why does it matter?
Your exit strategy is how you will repay the loan. It is usually a property sale or a refinance onto a longer-term mortgage. Lenders assess it carefully before they lend.
The biggest risk with bridging is that the exit is delayed or fails. A sale may take longer or achieve less. A refinance may fall through. Extensions can be costly, and default interest can be high. If you cannot repay, the lender may take possession of the property. Always have a backup plan.
Are bridging loans regulated by the FCA?
A bridging loan is FCA-regulated when it is secured on a property that you, or a close family member, live in or will live in. Regulated bridging currently has a maximum term of 12 months. The FCA consulted in 2026 on extending this to 24 months, but this was not in force at the time of writing.
Loans secured on investment or commercial property are usually not regulated. That means you have fewer protections, including no access to the Financial Ombudsman Service for some complaints. OMB will explain which applies to you.
What are the alternatives to bridging finance?
Bridging is not always the best answer. Depending on your situation, alternatives may include:
- A remortgage or further advance on your current home to raise a deposit.
- A second charge mortgage, repaid over a longer term.
- Let-to-buy, where you let your current home and buy a new one.
- Agreeing a longer completion date with the seller.
These can be cheaper, but may be slower. We will compare options before recommending bridging.
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Frequently asked questions
How quickly can a bridging loan complete?
Bridging can complete in a few weeks, and sometimes faster for straightforward cases with a ready valuation and legal work. Speed depends on the valuation, the solicitors and how quickly you provide documents. Regulated bridging on a home usually takes a little longer because more checks are required.
How much can I borrow with a bridging loan?
Many lenders lend up to around 70–75% of the property's value on a gross basis, including rolled-up interest and fees. Higher amounts may be possible using additional properties as security. The net amount you receive is lower once fees and retained interest are deducted.
Do I need a good credit score for a bridging loan?
Bridging lenders focus mainly on the property and your exit plan, so some will consider past credit problems. However, adverse credit can affect pricing and the refinance you need at the end. If your exit is a mortgage, that lender's credit criteria still matter.
What happens if I cannot repay my bridging loan on time?
You may be able to extend or refinance, but this usually adds cost. Some lenders charge default interest or extension fees. If you cannot repay, the lender can take legal action and may repossess the property. Speak to your broker early if your exit looks delayed.
Can I get a bridging loan with no monthly payments?
Yes. Rolled-up or retained interest means you do not make monthly payments. All interest is repaid at the end with the loan. This helps cash flow but increases the total owed, and the cost grows if the loan runs longer than planned.
Is a bridging loan the same as a second charge?
Not exactly. Most bridging loans are first charge loans. Some lenders offer second charge bridging behind your existing mortgage, which needs your first lender's consent. A longer-term second charge mortgage is a different product with monthly repayments over many years.
Can I use a bridging loan to buy at auction?
Yes, it is a common use. Auction purchases usually require completion within 28 days, which is often too fast for a standard mortgage. Arrange terms before bidding, and make sure the exit, usually a sale or refinance, is realistic for that property.
What is the difference between a bridging loan and development finance?
Bridging funds a purchase or light works over a short term, usually in one advance. Development finance funds ground-up builds or heavy conversions, releasing money in stages as work progresses. Both are short term and repaid from sale or refinance. Our development finance guide explains it in more detail.
Important: This guide is general information, not personal advice. Rules, rates and lender criteria change; speak to an adviser about your circumstances. Your home may be repossessed if you do not keep up repayments on your mortgage.