Bridging Finance FAQ
General information only. This is not financial advice.
Last reviewed: 2026-06-06
What is the difference between a regulated and unregulated bridging loan?
A regulated bridging loan is secured against a property the borrower (or a close family member) intends to live in. It falls under FCA regulation, meaning affordability rules apply and you have access to the Financial Ombudsman Service. An unregulated bridging loan is secured against commercial property, buy-to-let property, or land — anywhere the borrower will not reside. Unregulated loans sit outside FCA rules, giving lenders more flexibility on terms but offering borrowers less formal consumer protection.
What exit routes are accepted for a bridging loan?
Lenders require a clearly defined, realistic exit strategy. The two most common exits are: (1) Sale of the security property — the bridge is repaid from sale proceeds; and (2) Refinance onto a standard mortgage — the property must be mortgageable at that point, and you must demonstrate you can qualify for the long-term finance. Other accepted exits include receipt of a known large payment (property sale proceeds, inheritance) or completion of works that will make a currently unmortgageable property lendable. Most lenders grant 6–18 months for the exit to occur.
How much can I borrow on a bridging loan?
Bridging loans are typically available up to 75% of the open-market value of the security property. Some lenders extend to 80% in straightforward cases. The gross loan includes the advance, rolled-up interest, and arrangement fees — so the net amount you actually receive will be lower than the headline figure. For development projects, some lenders assess the loan against gross development value (GDV) rather than current value, which can unlock higher borrowing.
How quickly can a bridging loan complete?
In straightforward cases — clean title, agreed valuation, and experienced solicitors — bridging funds can be drawn within 5–10 working days. More complex cases typically take 3–6 weeks. The main bottleneck is usually the legal and valuation process, not the lender's credit decision. Having a solicitor experienced with bridging transactions, instructed before you apply, makes a significant difference to speed.
What does bridging finance cost?
Bridging loan costs include: monthly interest (typically 0.5%–1.2% per month, often rolled up into the loan rather than paid monthly); an arrangement fee (usually 1–2% of the gross loan); a valuation fee; your own solicitor's fees; the lender's legal fees; and sometimes an exit fee (around 1% on repayment). Always calculate the total cost of the bridge over your expected term — the monthly rate can look small but compounds quickly if the exit takes longer than planned.
Can I use bridging finance to buy a property at auction?
Yes — bridging finance is the standard tool for auction purchases, where completion is typically required within 28 days. This is too short for a standard mortgage. A bridging lender can usually meet this deadline if you have instructed solicitors before bidding and have a desktop or physical valuation ready. The bridge is repaid once a longer-term mortgage is arranged after completion. Failing to complete within the auction deadline forfeits your deposit and exposes you to the vendor's costs.
Risk warning
Your property may be repossessed if you do not keep up repayments. Bridging finance is a short-term product. Always ensure your exit strategy is credible before proceeding.
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