What is Bridging Finance?
Bridging finance is rapid lending that bridges a gap in funding. You borrow quickly to complete a
property purchase, then repay when longer-term funding arrives (sale of another property,
mortgage completion, or rental income accumulation).
Common Bridging Scenarios
Auction Purchase
Won an auction property requiring 28-day completion. Mortgage approval takes longer. Bridging
covers the gap.
Sale Timing Gap
Found your next investment property but haven’t sold your current one. Bridging lets you
complete quickly.
Renovation Finance
Bought a property requiring renovation. Bridging covers acquisition and initial works. Refinance
after completion.
Development Acquisition
Need rapid funding for land or development property. Bridging covers acquisition while
development finance is arranged.
Bridging Finance Costs
Bridging is more expensive than standard mortgages due to rapid assessment and short-term
nature:
- Interest rates: 1-1.5% monthly (12-18% annually)
- Arrangement fees: 1-3% of loan amount
- Valuation and legal: £1,000-£2,000
- Exit penalties: If held longer than intended
Bridging Finance Advantages
- Speed: Approval to completion in days, not weeks
- Flexibility: Covers gaps mortgages can’t address
- Opportunity: Lets you move fast on investments
Bridging Finance FAQs
Q1: How quickly can you arrange bridging finance?
Same day to 48 hours for straightforward deals. Assessment is rapid.
Q2: What’s the maximum bridging amount?
Usually 70-80% of property value. Larger mortgages for experienced investors with strong
collateral.
Q3: When should I refinance bridging?
Within 6-12 months typically. Extended terms attract higher rates. Plan your exit when
arranging bridging.
