Bridging loans, explained honestly.
Fast, asset backed lending from £100k to £25m for acquisitions, auctions, refurbishments and capital raises across the UK and Europe. 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. See our full guide to auction finance.
- 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. See our guide to refurbishment finance.
- Land purchase. With or without planning permission. See our guide to land bridging finance.
- 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.
Revolving bridging facilities
Less common, and worth knowing about because few borrowers ask for it by name. A revolving facility behaves more like an overdraft than a term loan: an agreed limit secured against property, which you draw down, repay and redraw as needed, paying interest only on the balance actually drawn.
It suits borrowers who buy and sell repeatedly rather than transacting once, because it removes the arrangement cost and the timetable of applying for a new facility on every deal. Auction buyers acquiring several lots a year, traders running a rolling refurbishment pipeline, and developers cycling through site acquisitions are the typical users.
The trade offs are real. Fewer lenders offer it, the security arrangement is more involved because the facility has to accommodate properties moving in and out, and a limit sized for your busiest period costs something to hold even when undrawn. It is a structure worth asking about if you transact regularly and worth ignoring if you do not.
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.
For the full breakdown of every fee, three worked examples and the costs that most often catch borrowers out, read our detailed guide to what a bridging loan actually costs.
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.
The sector. We arrange bridging across every sector and industry: hospitality, healthcare, retail, offices, industrial, student, leisure, agriculture and more, throughout the UK and Europe.
We test every deal against the whole market, not a panel, and issue lender backed indicative terms within 24 hours.
Valuations: the two lines that decide speed and size
Two decisions inside the valuation shape every bridge, and neither appears on a term sheet. The type of valuation sets your timeline: an automated model returns in minutes, a desktop report in 24 to 72 hours, a physical inspection in a week or more. The basis of valuation sets your loan: some lenders size the advance on market value, others on the same asset valued on the special assumption of a 90 or 180 day sale, which typically sits 5% to 25% lower.
The consequence is that two lenders can quote an identical loan to value and offer materially different money. On an £800,000 asset at a quoted 65%, the advance ranges from roughly £429,000 to £520,000 depending purely on which figure the percentage is applied to.
Both levers are pulled when the lender is chosen, not afterwards, which is why we test basis of value across the whole market alongside rate. The full valuations guide → · Desktop and AVM valuations →
How fast can a bridging loan actually complete?
Lender backed indicative terms within 24 hours. Completion in seven to fourteen days on clean first charge residential security where the valuation route is light and solicitors are instructed immediately, and two to three weeks as the realistic norm. Commercial and land security run to four to six weeks, because a full Red Book valuation takes one to three weeks on its own and cannot be shortcut.
The two variables that decide it are the valuation route the lender will accept and how fast your solicitor works. Both are largely settled in the first 48 hours, which is why the work that protects a deadline happens at the start rather than at the end. Check whether your deadline is realistic →
Bridging by situation
Same product, different job. Detailed guides on the situations a bridge is built for:
Auction finance
Completing inside the 28-day deadline.
100% & below market value
When the discount does the work of the deposit.
Refurbishment
Light and heavy works, buy-improve-exit.
Refinance
An expiring bridge or facility, before a forced sale.
Capital raise
Release equity against property you own.
Bridge to let
Buy, refurbish, then refinance onto a term loan.
Land bridging
Land with or without planning.
Development exit
Extend, bridge or refinance a finishing scheme.
Bridging loan FAQs
How much does a bridging loan cost?
Expect a monthly interest rate from 0.69% per month for first charge residential deals at sensible leverage, a lender arrangement fee of around 2% of the gross loan, plus valuation and legal costs. On a typical £500,000 bridge over 12 months the total cost of borrowing usually lands between 10% and 14% of the loan. Our calculator shows every line before you give us any contact details.
How quickly can a bridging loan complete?
A well packaged bridge typically completes in around 3 weeks. Auction purchases on 28 day deadlines are routine. The main variables are valuation turnaround and legals; instructing solicitors on day one is the single biggest accelerator.
What can I use a bridging loan for?
Property acquisitions including auction purchases, chain breaks, refurbishment projects, refinancing an expiring facility, and raising capital against property you already own. The common thread is a clear exit: sale or refinance.
What deposit or equity do I need?
Most lenders go to a maximum of 75% loan to value on first charge residential or semi commercial assets, so you need at least 25% equity in the deal, from cash or cross charged against other property. Commercial assets and second charges price lower.
What is the difference between retained and serviced interest?
Retained interest is deducted from the loan up front, so you make no monthly payments but receive a smaller day one advance. Serviced interest is paid monthly, giving you a larger advance but requiring provable income to cover payments. Retained suits most bridging scenarios; our calculator models both side by side.
Do bridging loans require proof of income?
For retained interest bridges, affordability is assessed on the asset and the exit rather than your income, so income proof is usually light touch. Serviced interest loans require evidence you can meet the monthly payments.
How quickly can a bridging loan complete?
Seven to fourteen days on clean first charge residential security where an automated or desktop valuation is accepted and solicitors are instructed on day one, with two to three weeks the realistic norm. Commercial and land security typically take four to six weeks because a full Red Book valuation with an internal inspection takes one to three weeks by itself. Lender backed indicative terms are available within 24 hours in every case.