A bridging loan is a type of short term property backed finance. They are often used to fund you for a period of time whilst allowing you to either refinance to longer term debt or sell a property.

Bridging loans are usually offered for between 1-18 months, with the loan repayable in full at the end of the term. Unlike other forms of borrowing the monthly interest is often rolled into the loan, meaning there are no repayments to make during the term of the loan.

The application process is usually far simpler than for other types of borrowing and applications can complete very quickly typically from 5-28 days.

Bridging finance can be offered against almost any property or land and can be used for a number of different reasons. The main uses are:

  • Purchasing a property quickly – such as auction purchases
  • Buying uninhabitable property
  • Funding property restoration or conversion work
  • Buying property under market value

Bridging loans are undoubtedly a very useful tool when looking to raise finance.

Applications are usually completed in less than 14 days, making them ideal when funds are needed quickly. As there are often no monthly repayments to make, bridging finance can be used to raise capital where cash flow is tight, but you have the assets to comfortably repay the loan.

  • The bridging market is very competitive, and this is leading to a reduction in interest rates. With rates starting from as little as 0.49% per month up to 75% LTV so bridging finance has never been cheaper.
  • Bridging loans can be used to purchase properties that would be ineligible for borrowing using other types of borrowing, such as property that is not habitable
  • Bridging loans can be more expensive than traditional mortgages. Although rates are dropping, traditional mortgages are still by far the most economical option for most property transactions. Remember Bridging is short term compared with long term for mortgages

Is Your Repayment Method Viable?……….. Sell or  Re Finance or Convert to Buy To Let

  • The main question you will be asked when taking out a bridging loan is how you intend to repay the loan at the end of the term. If you’re planning to sell your property, make sure the term of the loan gives you sufficient time to find a buyer and for the sale to complete if you plan to refinance onto a longer-term loan,


Call Graham to discuss any points further 0161 307 1082 or 07507 645381