Compare Cheap  Bridging Loans

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Find out if a bridging loan could be for you

Funds often available within days

Funds often available within days

Borrow £26K to 25M

Borrow £26K to 25M

No early repayment charges

No early repayment charges

What is a Bridging Loan?

Bridging loans are short-term property secured loans which are mainly used for a variety of property transactions. They are designed to cover a temporary shortage of credit, hence the term 'bridging'. In general, bridging loans are normally only taken out for up to twelve months. For example, in a situation where a property buyer needs to pay a down payment on a new mortgage before they have sold their existing home, a bridging mortgage could be suitable.

Bridging loans are now used for a variety of property transactions inluding refurbishing a property for letting or sale as a buy to let property. Many bridging loans of this type are for non regulated transactions i.e. commercial activity

Despite the fact that most bridging loans of this type are subject to the same regulation as mainstream mortgages, interest rates on bridging finance products tend to be higher than on traditional mortgages, reflecting the risk to the lender and will be subject to arrangement fees.

All bridging loans must have an exit plan.

Find out if a bridging loan could be for you

Funds often available within days

Funds often available within days

Borrow £26K to 25M

Borrow £26K to 25M

No early repayment charges

No early repayment charges

Applying for a Bridging Loan

Moving home can be a complicated (and not to mention stressful) process, made even more so when all the important dates don’t match up. If you have get the money together to take out a mortgage so you can move into your new place before you’ve got the money from selling your current home, then a bridging loan can help. Here’s how to get one:

Fill in the form

First, we'll need a few basic details about you and about the amount you wish to borrow. This step is important as it means we can make sure that we’re only finding you loans appropriate to your situation that you’re likely to get accepted for.

Wait for a broker to get in touch

Once you’ve sent us some information, it gets passed on to our expert panel of brokers, who will then get in touch with you to discuss your options.

Start your application (we never charge any upfront fees)

Now comes the easiest part - take out the loan you've selected, get the keys to your house, and move in!

Receive your funds

within the timescale you specify. It’s that easy!”

More information on Bridging Loans

What is Bridging Finance?
Bridging finance is exactly the same as a bridging loan, there is no difference between the two financial products although the term bridging loans is far more commonly used than bridging finance.Bridging mortgages are exactly the same as a bridging loans and bridging finance there is no difference between the three financial products. In many ways all three products are actually short term mortgages, either first or second charge. Another term sometimes used is bridging funding.
Short term Bridging Loan Options

Bridging loans can be much more expensive than mainstream mortgages as they are a short-term financing option, designed to assist borrowers who must have a clear exit strategy. The costs can range from 0.44%-1.5% per month, which could add up to anything between 5% & 18% per year, far more than most mortgages. So it pays to do a bridging loan comparison, particularly as rates can vary so much. You can also use bridging loan calculators to determine what your monthly payments would be based on the amount you wish to borrow.

As well as having higher interest rates, on bridging loans also very often have arrangement fees and you would have to pay both the lenders’ and your own legal costs.

In some cases, the interest rate may be of less importance than the cost of the fees. Paying a higher interest rate in order to pay lower fees could be a smart decision in the long run. In general, the bridging companies’ interest rate will depend on the 'loan-to-value', i.e. the amount you are borrowing as a proportion of the property's value, so it pays to compare as many bridging lenders as possible before you make a decision and also make us of a Bridging loans calculator.
What are Bridging loans used for?

What are bridging loans used for? Bridging loans are typically used for house purchases. They are designed to assist home movers who wish to purchase a new home prior to having sold their existing home. When equity is tied up in an existing mortgage, bridging finance may be appropriate to fund a new property purchase.

They can be especially useful for property developers, landlords and people who are purchasing property at auction. Home-movers may wish to use a bridging loan to cover a break in a property chain, so that they can purchase a new property while waiting for a new mortgage. However, it is important to remember that taking out a bridging loan does not guarantee that you will obtain a mortgage in the future.
Types of Bridging loan finance
Types of Bridging Finance There are two main types of bridging loans, open and closed bridge. A closed bridge is available to borrowers who have exchanged contracts for the sale of their current property. An open bridge is for borrowers who have found their ideal home but have not yet put their current property on the market. Due to their nature, closed bridge loans are more flexible and affordable than open bridge loans.
Importance of an exit strategy
As bridging mortgages are an expensive way of covering a temporary shortage of credit, bridging loans should only be taken out by borrowers who have a clear exit strategy. If you are taking out a bridging loan to fund the purchase of a new property, it is advised that you already have a buyer in place for your existing property. A lack of this sort of exit strategy could result in serious financial issues if you cannot pay back a bridging loan.
Getting accepted for a Bridging loan
Since the financial crisis, obtaining credit from mainstream lenders in the form of conventional loans has become increasingly difficult. This, coupled with squeezed household budgets, has led to more and more people turning to short-term options like bridging finance. Although increasing numbers of borrowers are using bridging loans as an alternative to traditional loans, this is not advisable, for a number of reasons. Firstly, bridging loans are far more expensive than traditional loans and come with fees which have the potential to mount up to £1000s over time. Secondly, they should only be taken out if there is a guaranteed line of credit which will be available in the near future. If not, the loan could prove extremely difficult to pay back. Finally, as bridging loans are often secured against the borrower's property, the consequences of not keeping up with payments could be grave. In short, bridging finance should only be used as a last resort, short-term option, for borrowers with a planned exit strategy. With all bridging lending you should ensure the product is right for your circumstances.
ME Expert Ltd is not authorised to provide advice and are introducing you to a regulated firm with whom we are not under a contractual obligation to conduct mortgage, loans or general insurance mediation business with exclusively. You should ensure you provide any potential insurer with your full details and ensure that you are eligible to make a claim(s) in relation to the cover offered. ME Expert Limited receives a small fee from providers for introductions. MoneyExpert does not give advice on or recommend any particular product or service or whether it is suitable for your personal circumstances. The information provided is to help you to make your own choice about how to proceed.

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Last reviewed: 1 June 2024

Next review: 1 July 2024