Bridging finance.
A bridging loan is short-term borrowing secured on property, used when a purchase or project cannot wait for an ordinary mortgage. It is priced by the month, with fees on top, and interest is often added to the loan. What decides whether it works is the exit: a dated way to repay it.
If the loan is secured on a property that you or a close family member live in, or will live in, it's usually regulated bridging. If it's secured on an investment or business property, it's unregulated.
Unregulated bridging loans (for investment or business purposes) are not regulated by the Financial Conduct Authority.
Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
Written by Nathan Lawes, independent mortgage broker. Figures sourced and dated. Last reviewed .Read them in this order.
Start with the cost and the exit, then how developers use a bridge.
- 01 · Start hereHow much does a bridging loan cost?What a bridge costs once the fees are added, and what counts as a real exit.Read
- 02 · DevelopersThe developer’s bridge: when speed costs less than delayWhen the cost of waiting is set against the cost of the bridge.Read
- 03 · DevelopersHow to structure development finance when the rate picture is uncertainBuilding rate uncertainty into a development deal and its exit.Read
What does a bridging loan cost?
Interest is charged monthly, often added to the loan, and fees sit on top: the lender’s arrangement fee, valuation, legal work, a broker fee on many deals and sometimes an exit fee. Compare the total over the weeks you hold the loan, not the monthly rate alone.
Is bridging regulated?
If the loan is secured on a property that you or a close family member live in, or will live in, it's usually regulated bridging. If it's secured on an investment or business property, it's unregulated. Unregulated bridging loans (for investment or business purposes) are not regulated by the Financial Conduct Authority. Which applies turns on the building and who will live in it, so ask us.
What counts as an exit?
A repayment route with a date and a mechanism: a sale with a buyer and solicitors instructed, or a refinance agreed in principle by a lender that has seen the case. Where interest is added to the loan, an exit that slips adds cost for each extra month.
How quickly can a bridge complete?
It depends on the valuation, the legal work and how complete the case is when it starts. If you are working to a deadline such as an auction, speak to us before you bid.
Where to go next
- ServiceBridging finance with LawesRegulated and unregulated bridging, what it costs, and how we work.
- CalculatorPut numbers to a bridgeInterest, arrangement, valuation, legal and exit fees, in total. An illustration, not an offer.
- Related guideCommercial mortgages: a guide in reading orderBusiness premises, semi-commercial and personal guarantees.
- Talk it throughA 20-minute call with NathanNo obligation. We’ll look at the property, the timing and the exit.
Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.