Bridging loans, explained honestly.
Fast, asset backed lending from £100k to £25m for acquisitions, auctions, refurbishments and capital raises. What a bridge really costs, when it works, when it does not, and a calculator that shows you every figure before we have even spoken.
What is a bridging loan?
A bridging loan is short term finance secured against property, designed to be repaid within 3 to 24 months from a defined exit, usually the sale of the asset or a refinance onto longer term debt. Because the lender underwrites the asset and the exit rather than your income, a bridge can complete in weeks rather than the months a conventional mortgage takes.
That speed is the product. You pay more per month than term debt precisely because the lender is pricing certainty and pace, which is why a bridge only makes sense when the deal itself generates the value: an auction deadline, a below market acquisition, a refurbishment uplift, or a broken chain that would otherwise cost you the purchase.
When a bridge works
- Auction purchases. 28 day completion deadlines that no mortgage can meet.
- Chain breaks. Secure the purchase now, sell the existing asset on your own timetable.
- Refurbishment. Buy, improve, then sell or refinance against the uplifted value.
- Capital raise. Release equity from property you own to fund the next acquisition.
- Refinance. An expiring facility, a development exit, or buying time to complete a sale.
When it does not
If there is no credible exit, a bridge is expensive trouble deferred. If your timeline is comfortably three months or more and your income supports it, a term facility will almost always be cheaper; compare a commercial mortgage. And if the plan is to refinance later at a higher value with no evidence for the uplift, expect us to say so before a lender does.
How much does a bridging loan cost?
The all in cost of a bridge is the monthly rate plus fees, and the fees are where borrowers get surprised. Here is the full stack on a typical first charge residential bridge:
| Cost line | Typical range | Notes |
|---|---|---|
| Monthly interest rate | from 0.69% pm | Driven by LTV, asset type and exit strength |
| Lender arrangement fee | around 2% of gross loan | Usually added to the loan |
| Valuation | £500 to £3,000+ | Scales with asset value and complexity |
| Legal costs | £1,500 to £5,000+ | You cover both sides' solicitors |
| Exit / admin fee | £0 to 1% | Lender specific; we flag it up front |
| Broker fee | Disclosed before you proceed | Commission model confirmed in writing |
Indicative ranges based on current whole of market pricing, July 2026. Second charge and commercial assets price higher.
On a £500,000 gross loan over 12 months, total cost of borrowing typically lands between 10% and 14% of the loan. Whether that is expensive depends entirely on what the bridge buys you: a £50k discount at auction pays for the facility several times over.
Retained or serviced interest?
Retained. Interest for the full term is deducted from the advance up front. No monthly payments, assessed on the asset and exit rather than income. Suits most bridging scenarios.
Serviced. You pay interest monthly and receive a larger day one advance, but must evidence the income to cover it.
The calculator models both side by side, live: compare retained vs serviced on your numbers →
Criteria: what lenders actually look at
The asset. First charge residential and semi commercial property gets the best pricing at up to 75% LTV. Commercial, land and second charges are all fundable, at lower leverage and higher rates.
The exit. The single most important line in the application. Sale exits need realistic pricing evidence; refinance exits need a decision in principle grade case that the take out debt will be there.
The sponsor. Adverse credit is not automatically fatal on a retained bridge, but it must be disclosed and explained. Experience matters more on refurbishment deals than on straight acquisitions.
We test every deal against the whole market, not a panel, and issue lender backed indicative terms within 24 hours.
Bridging loan FAQs
How much does a bridging loan cost?
From 0.69% per month plus an arrangement fee of around 2%, valuation and legals. On a typical £500k, 12 month bridge the all in cost is usually 10% to 14% of the loan. The calculator gives you your exact figures with no email gate.
How quickly can a bridging loan complete?
Around 3 weeks for a well packaged deal; 28 day auction deadlines are routine. Instructing solicitors on day one is the biggest accelerator.
What can I use a bridging loan for?
Acquisitions, auction purchases, chain breaks, refurbishments, refinances and capital raises. Anything with property security and a credible exit.
What deposit or equity do I need?
At least 25% on first charge residential (75% max LTV), from cash or equity cross charged against other property you own.
What is the difference between retained and serviced interest?
Retained is deducted up front: no monthly payments, smaller advance. Serviced is paid monthly: bigger advance, income assessed. The calculator compares both on your numbers.
Do bridging loans require proof of income?
Retained bridges are assessed on asset and exit, so income evidence is light touch. Serviced bridges require provable income for the monthly payments.