Tide Funding Options
Octopus Bridging Loans
Precise Mortgages Bridging Loans
United Trust Bridging Loans
MHBS Bridging Loans
LendInvest Bridging Loans
Glenhawk Bridging Loans
Funding 365 Bridging Finance
Streambank Bridging Loans
Octane Capital Bridging Loans
Hampshire Trust Bank Bridging Loans
Castle Trust Bank Bridging Loans
MT Finance Bridging Loans
Bridging Loans at a Glance
| Feature | Details |
|---|---|
| Typical loan term | 1 to 24 months; most residential bridges settle in 6 to 12 months |
| Speed to funds | Indicative terms: same day. Formal offer: 1–3 days post-valuation. Completion: 2–4 weeks on a clean file |
| Security required | Residential or commercial property (first or second charge); land at lower LTVs |
| Typical LTV | Up to 75% first charge; 65–70% second charge; 50–60% on land |
| Regulated or unregulated | Regulated (FCA/MCOB) when borrower or family will occupy; unregulated for investment, commercial, and development use |
| Repayment route | Exit strategy required: sale of property, remortgage, or development sale |
| Best suited to | Property investors, developers, landlords, and owner-occupiers with a timing gap a mortgage cannot solve fast enough |
| Main risks | High compounding cost; property at risk if exit fails; default interest if term overruns |
What Is a Bridging Loan?
A bridging loan is short-term secured finance, usually against property, that covers the gap between money you need now and a larger sum landing later. The lender charges interest by the month and takes a legal charge over the property, which it keeps until you repay.
A simple example: you want to buy a new home before your existing one sells. A bridge funds the purchase; you repay it when the old property completes. Total term: three to six months. Total cost: interest plus fees for those months only.
How Bridging Loans Work
- You apply with details of the property, the loan amount, your exit strategy, and the term you need.
- The lender assesses the security (property value and type) and the exit (how credible your repayment plan is). Income assessment is lighter than a mortgage.
- Valuation takes place. You pay the valuer directly; this fee is non-refundable if the deal does not proceed.
- Offer issued, typically 1 to 3 days post-valuation on a clean file.
- Legal work proceeds. You need your own solicitor; the lender instructs their own. Both fees are your responsibility.
- Funds release once the lender is satisfied with security and the exit plan. Arrangement fee is usually deducted from the advance.
- You repay on the agreed date using your exit proceeds. If you repay early, most lenders charge only for the months actually used (after a minimum interest period of 1 to 3 months).
Regulated vs Unregulated Bridging Loans
| Feature | Regulated | Unregulated |
|---|---|---|
| Applies when | Borrower or immediate family will occupy the property | Investment, commercial, or development use |
| FCA oversight | Yes (MCOB rules apply) | No FCA regulatory framework |
| Affordability check | Required under MCOB | At the lender’s discretion |
| Consumer protections | Full FCA consumer credit protections | Fewer statutory protections; contract terms govern |
| Typical uses | Chain break, buying before selling, uninhabitable residential | BTL, development, commercial, auction (investment) |
| Lender pool | Smaller; lender must be FCA-authorised | Larger; includes specialist unregulated lenders |
Main Types of Bridging Loan
| Type | What it means | Typical LTV | Rate vs baseline | Best for |
|---|---|---|---|---|
| Open bridge | No fixed repayment date; maximum term up to 12 months | Standard | Higher | Exit likely but not contractually confirmed |
| Closed bridge | Fixed repayment date tied to a known event (exchanged contracts, AIP) | Standard | Lower | Sale exchanged or mortgage offer in place |
| First charge | Lender first in queue on repossession; no existing mortgage on the security | Up to 75% | Lower | Unencumbered property or redeeming existing mortgage with bridge |
| Second charge | Sits behind existing mortgage; subordinate security | 65–70% combined | Higher | Releasing equity while keeping existing mortgage in place |
| Fixed rate | Monthly rate fixed for the full term | Any | Standard | Cash-flow certainty; the UK default for most bridges |
| Variable rate | Tracks a benchmark rate plus a margin | Any | Market-dependent | Borrowers with a genuine view on rates; uncommon |
Open vs Closed Bridging Loans
An open bridge has no fixed repayment date, only a maximum term (usually 12 months). You use it when your exit is probable but not yet contractually locked. The lender prices for the uncertainty: rates run higher than on a closed product.
A closed bridge has a specific repayment date tied to a known event, most often exchanged contracts on a property sale or a mortgage offer with the property address on it. The lender knows when the money is coming back and prices accordingly.
If your exit is genuinely pinned down, we always recommend asking for closed-bridge pricing. The discount over an open bridge is real and worth capturing.
First Charge vs Second Charge Bridging Loans
A first charge means the bridging lender is first in the queue if the property is repossessed. Most first-charge lenders cap at 75% LTV. If the property is unencumbered, or you are redeeming the existing mortgage with the bridge proceeds, this is the product you are using.
A second charge sits behind an existing mortgage. The lender is subordinate in a default, so LTVs are tighter (typically 65 to 70% of combined value) and rates are slightly higher.
Second charge is worth considering when remortgaging would trigger an early repayment charge that outweighs the extra cost of a second-charge bridge. We recommend running the numbers both ways before committing.
What Can Bridging Loans Be Used For?
Bridging is flexible in what it funds but narrow in how it is underwritten. The security and the exit always come first, whatever the money is for. Four use cases account for most of the bridges we see written: buying before selling, auction purchases, refurbishment, and investment or development.
Buying Before Selling
When your buyer pulls out and you risk losing the property you are moving into, a regulated bridge lets you complete the purchase while your existing home is sold.
The exit is the sale of the old property. This is one of the most common regulated bridging scenarios: the borrower will occupy the new home, bringing the loan under FCA/MCOB rules.
Price the property to sell before you draw the bridge, not after the meter is running. See our guide to chain break bridging for full detail.
Auction Purchases
Auction purchases must complete in 28 days. A residential mortgage rarely moves that fast, especially if the property is unmortgageable in its current state. A bridge covers the purchase; you refurbish and sell or refinance once the property meets lender criteria.
Build the interest and fees into your deal appraisal before you bid. Budget for a 5% down-value from the lender’s valuer as your base case: auction lots occasionally come in below the hammer price, which forces your LTV up.
Renovation and Refurbishment
Properties that need structural work or major damp treatment cannot usually be mortgaged. A bridge funds the purchase and sometimes the works; you refinance once the property meets minimum lender standards and has an EPC rating the exit lender will accept.
Confirm the exit lender’s minimum EPC band in writing before committing to the bridge. See our guide to auction finance if the purchase is at auction.
Buy-to-Let, Commercial and Development Uses
Investors bridge to buy BTL stock that needs work before it meets minimum rental standards, then refinance onto a buy-to-let mortgage. Stress-test the exit mortgage at the lender’s stressed rental rate before borrowing, not at today’s pay rate.
Commercial and development bridges are almost always unregulated. Offices, retail units and mixed-use buildings can be purchased on a commercial bridge at slightly higher rates and tighter LTVs than residential.
Development bridges fund land purchase and early costs while a development finance facility is arranged for the build.
How Much Can You Borrow with a Bridging Loan?
The cap is the lower of what the LTV allows and what your exit can repay. The table below shows worked examples across the three main security types.
| Security type | Property value | Existing mortgage | LTV cap | Maximum net borrowing |
|---|---|---|---|---|
| First charge | £400,000 | None | 75% | £300,000 |
| Second charge | £400,000 | £200,000 | 70% of combined value | £80,000 |
| Land with planning | £200,000 | None | 60% | £120,000 |
Minimum loan sizes start around £25,000 to £50,000 depending on lender. At the top end, lenders like Octopus Bridging write loans to £25 million for experienced borrowers with strong assets.
Bridging Loan Costs
| Cost item | Typical range | Notes |
|---|---|---|
| Monthly interest rate | 0.55% to 1.50% | Rate varies by LTV, property type, and credit profile; compare at the same LTV and term |
| Arrangement fee | 1% to 2% of loan | Usually deducted from the advance; factor into net funds you will receive |
| Exit fee | 0% to 2% | Charged at redemption; some lenders (e.g. Funding 365) charge zero |
| Valuation fee | £300 to £1,500 | Paid upfront; non-refundable if the deal does not proceed after the valuation is booked |
| Lender legal fee | £500 to £1,500 | You pay the lender’s solicitor as well as your own |
| Your solicitor | £800 to £2,000 | Use a solicitor with recent bridging completions; unfamiliar conveyancers slow deals by weeks |
Interest Rates and Monthly Interest
Monthly rates on the lenders we track start from 0.55% with Octopus Bridging, with Precise and United Trust close behind. The top of the range reaches 1.50% and above at the specialist adverse-credit end.
Those sub-0.60% rates apply at low LTVs (often 55 to 60%) on clean residential security with experienced borrowers. The typical quote on a clean 70 to 75% LTV residential deal sits in the 0.75% to 1.10% range.
Compounding matters: 1% monthly does not equal 1% annually. Compound it over 12 months on a rolled-up facility and you land at approximately 12.7%. On a £200,000 loan that is £25,400 of interest, not £24,000, before fees. We compare lenders on this total figure, not the headline monthly rate.
Arrangement Fees, Valuation Fees and Legal Costs
| Fee | Typical amount | When charged | Watch out for |
|---|---|---|---|
| Arrangement fee | 1% to 2% of loan | Deducted from advance or added to loan | If you need £200,000 net, borrow £204,000 gross to cover a 2% fee |
| Valuation fee | £300 to £1,500 | Paid upfront before offer | Non-refundable once booked; commercial and mixed-use at the top of the range |
| Lender legal fee | £500 to £1,500 | At completion | Quoted upfront in the offer; confirm before instructing |
| Your solicitor | £800 to £2,000 | At completion | Use a solicitor on the lender’s panel or one with bridging experience; unfamiliar solicitors can add 2 to 3 weeks to completion |
| Broker fee | 0% to 1% | Varies by broker | Many brokers are lender-paid; clarify before engaging |
Rolled-Up, Retained and Serviced Interest
| Interest type | How it works | Cash flow impact | Total cost vs serviced | Best for |
|---|---|---|---|---|
| Rolled-up (deferred) | Interest accrues monthly and is paid with the capital at redemption | No monthly payments during the term | Highest (compounding) | Borrowers preserving cash flow; the UK default for most bridges |
| Retained | The full term’s interest is deducted from the advance on day one | No monthly payments; lower net advance received | Similar to rolled-up; no compounding but advance is reduced upfront | Predictable term; lender retains interest before release |
| Serviced | Borrower pays interest monthly; capital repaid at redemption | Monthly outgoing required | Lowest overall; no compounding or retention | Borrowers with regular income who want to minimise total interest |
Bridging Loan Eligibility and Security
Bridging underwriting centres on two questions: is the security sound, and is the exit credible? Income assessment is lighter than a mortgage, but the bar on exit quality is higher.
We find that exit credibility matters more than credit history at most specialist lenders. A documented exit clears underwriting more reliably than a clean credit file paired with a vague repayment plan.
Property, Loan-to-Value and Credit Profile
- Residential property (first or second charge): lenders will generally lend to 75% LTV on standard construction; unusual construction, high-rise flats and properties above commercial premises attract lower LTVs.
- Commercial property: rates sit slightly above residential and LTVs slightly below, reflecting a thinner resale market.
- Land: with planning permission typically 50 to 60% LTV; without planning, many lenders decline entirely.
- Credit profile: CCJs, defaults and arrears are not automatic declines at specialist lenders (see MT Finance). All lenders check for bankruptcy and active IVAs. Adverse credit borrowers should expect rates at the upper end of the range and LTVs pulled back by 5 to 10 percentage points.
- Experience: first-time applicants are accepted, but expect closer questioning on the exit and sometimes a tighter LTV versus a repeat borrower on the same deal.
Exit Strategy Requirements
| Exit route | Evidence required | Risk level | Lender appetite |
|---|---|---|---|
| Sale of property | Sales memorandum or exchanged contracts preferred; property on market with agent and asking price at minimum | Low if contracted; medium if open bridge | High with contracts; lower without |
| Remortgage | AIP with property address; affordability confirmed with exit lender | Medium | High if AIP in place; lower if AIP is still pending |
| Development sale | GDV, build programme, named contractor with PI cover and filed accounts | High | Case-by-case; underwriters scrutinise contractor quality and programme realism |
| Cash repayment | Bank statements confirming available funds | Low | High |
How to Compare Bridging Loans
Run every quote through the same filter, because lenders do not present costs in a way that lets you compare them at a glance. The cheapest headline rate is rarely the cheapest total cost once fees, LTV and completion speed are in the mix.
Cost. Add the arrangement fee, exit fee, valuation and lender legal fee to the interest bill. Divide that total by the loan amount. Rank lenders on that number, not on the monthly rate.
A 0.79% rate with a 2% arrangement fee often costs more than 0.85% with a 1% arrangement fee on a short hold. We find this catches borrowers out more than any other variable in a bridging quote.
Speed. If you need completion in two weeks for an auction deadline, the lender who moves fast is worth more than the cheapest lender with a four-week queue. Ask each lender for their realistic timeline on a deal like yours, not their marketing timeline.
Flexibility. Confirm early repayment terms, minimum interest periods, and extension options. If your exit lands at month four on a six-month facility, you want to pay four months, not six.
Lender criteria. Lenders decline more on weak exits than on adverse credit. A credible exit is a sale with exchanged contracts, a BTL AIP with the property address, or a documented development with GDV, contractor and build programme. If you have two potential exits, tell the lender both.
Pros and Cons of Bridging Loans
- Fast access to funds: two to three weeks on a clean file versus two to three months for a mortgage
- Flexible uses: auction purchases, refurbishment, chain breaks, commercial and development
- Interest can be rolled up and paid at the end, preserving cash flow during the hold
- Early repayment usually allowed after a minimum interest period, so you pay only for months used
- Specialist lenders assess the asset and exit, not just the credit score; adverse credit is not automatically a block
- LTVs up to 75% first charge on suitable residential property
- Monthly rates of 0.70% to 1.50% compound into a materially higher annual cost than a mortgage
- Arrangement, exit, valuation and legal fees add thousands on top of the headline interest
- Your property is at risk if the exit fails and you cannot repay or extend
- Unregulated bridges (investment and commercial) have fewer consumer protections than regulated products
- Overrunning the term triggers default interest that can double the effective cost
- Second-charge and land-backed deals come with tighter LTVs that may not cover what you need
Is a Bridging Loan Right for You?
A bridge is right when three things are true: you need funds faster than a mortgage can deliver; you have a credible, documented exit inside the term; and the total cost is outweighed by the value of completing the transaction on time.
- Good fit if: you are buying at auction and have 28 days; your property chain has broken and you need to complete on a purchase; the property is unmortgageable in its current state but has a clear refurb route; you have a signed AIP or exchanged contracts as your exit.
- Not ideal if: your exit is speculative (a sale with no offer, a remortgage not yet applied for); a conventional mortgage or remortgage could land in time; the deal only works at zero finance cost; or you have no contingency if the exit is delayed.
A simple test: write down your exit, the evidence for it, and the date. If a cautious friend would not lend you the money on that plan, a bridging lender probably should not either.
How to Get a Bridging Loan
- Estimate your borrowing. Confirm the property value, the LTV you need, whether the loan is regulated (you or family will occupy) or unregulated, and the term you require.
- Prepare your exit strategy. Write down how you will repay, the date you expect the money, and the evidence behind both. This document is the spine of your application.
- Compare lenders or use a broker. Tide Funding Options lets you quote multiple lenders on the same deal without a hard credit search. Compare total cost, not monthly rate.
- Accept terms and instruct the valuation. The valuation fee is paid directly to the valuer and is non-refundable once booked.
- Appoint a solicitor with bridging experience. Ask for two recent bridging completions before instructing. An unfamiliar conveyancer can add two to three weeks to an otherwise clean deal.
- Submit your documents. Typical pack: ID and proof of address, three to six months of bank statements, asset and liability summary, hard evidence of exit (sales memorandum, AIP, or development appraisal), title documents, and the EPC for the security property.
- Complete. Funds release once legal charges are in place and the lender is satisfied with security and exit. Arrangement fee is deducted from the advance.
Alternatives to a Bridging Loan
Bridging is not always the right answer, and the cheaper routes deserve a fair hearing before you commit.
We find a remortgage or further advance nearly always beats a bridge on cost when six to eight weeks are available and affordability stacks up. Where each alternative earns its place, and where it falls down, is set out below.
| Alternative | Cost vs bridge | Typical speed | Best for | When it fails |
|---|---|---|---|---|
| Remortgage or further advance | Much cheaper | 4 to 8 weeks | Releasing equity where time and affordability allow | Too slow for auctions; fails if property is unmortgageable or ERC outweighs saving |
| Second-charge mortgage | Cheaper | 3 to 6 weeks | Long-term equity release at lower rate than a bridge | Minimum terms of 3 to 5 years; not a short-term product |
| Secured loan | Cheaper | 2 to 4 weeks | Smaller sums against residential property | Cannot fund a property purchase; income and affordability required |
| Development finance | Similar to bridge; staged drawdowns | 4 to 8 weeks | Ground-up builds and major conversions | Not designed for short bridge gaps; GDV and build programme required |
| Auction finance | Similar to bridge | 2 to 3 weeks | Auction purchases requiring proof of funds before the hammer | Essentially the same cost range; consider it a specialised bridge product |
| Personal funds | Zero cost | Immediate | Smaller gaps where cash is readily available | Does not scale to property-level sums; opportunity cost of deploying capital |
| Business loan | Cheaper for commercial use | 1 to 4 weeks | Business premises purchase via a company | Terms and security requirements may not align with property acquisition timelines |
Frequently Asked Questions
What is a bridging loan used for?
Bridging loans are most commonly used for buying before selling (chain break), auction purchases that must complete in 28 days, refurbishment of unmortgageable property, and buy-to-let or development acquisitions. Any scenario where you need funds faster than a mortgage can deliver, and have a credible repayment plan, is a potential use case.
Are bridging loans high risk?
They carry real risk because the property is the security and the rate is high. If the exit fails, the lender can repossess. The risk is manageable when the exit is documented and the LTV leaves a buffer. It is acute when the exit is speculative or the deal only works at zero finance cost.
Can I get a bridging loan with bad credit?
Yes. Specialist lenders like MT Finance assess the asset and the exit rather than the credit score. CCJs, defaults and arrears are not automatic declines. Expect a higher rate, typically at the upper end of the 0.70% to 1.50% range, and slightly lower LTVs than a borrower with a clean credit history.
How much equity do I need for a bridging loan?
Most first-charge lenders cap at 75% LTV, so you need at least 25% equity in the property being charged. Second-charge lenders cap around 65 to 70% of combined value. Land-backed deals often need 40 to 50% equity.
What happens if I cannot repay my bridging loan?
Most bridges roll up interest and settle in full at redemption, so the pressure point is the repayment date, not monthly instalments. If you cannot repay, ask the lender for an extension first. If they refuse or you cannot meet extension terms, the property can be repossessed and sold to clear the debt. Default interest applies from the missed redemption date and is significantly higher than the original rate.
Can you get 100% bridging finance?
Not against the subject property alone. A lender capped at 75% LTV cannot lend 100% of the purchase price on that property. You can structure 100% of the purchase price by offering a second charge on a separate property you own, provided the combined LTV across both assets still fits within the lender’s cap.
Do bridging loans affect your credit score?
Most lenders run a credit check, which leaves a soft or hard footprint depending on the lender. Tide Funding Options allows you to compare multiple lenders without a hard search. All lenders check for bankruptcy and active IVAs regardless of their broader credit appetite.
How long does a bridging loan take to arrange?
“Same-day bridging” is marketing language for indicative terms only. Funds in your account typically takes two to four weeks on a clean file with a straightforward property. Formal offer arrives one to three days post-valuation; legal work and completion add one to three weeks from there.
How we reviewed this
What we covered. This guide explains how bridging loans work for UK borrowers, drawing on FCA guidance, Bank of England publications, and lender documentation. We do not draw on comparison site summaries or aggregator data.
Data sources. All claims were checked against primary sources in April 2026, including provider websites, FCA guidance, and Bank of England publications.
Update cadence. We re-verify this page at least monthly, and whenever a provider changes pricing, eligibility, or terms. The verification date on the page reflects the most recent full review. Some links on this page are affiliate links; see our editorial policy.
Regulatory note. This page is editorial content, not regulated financial advice. Credit products are subject to status and approval. Compare offers directly with providers before you apply.