What is a regulated bridging loan?

A regulated bridging loan is short term mortgage borrowing secured on a home you or close family live in, or will live in.

The financial regulator's mortgage rules apply, with protections including access to the Financial Ombudsman Service for eligible complaints.

When is a bridging loan regulated?

For a personal house move, a loan secured on your current or intended home is regulated mortgage borrowing. The home does not have to be the property you are buying.

You might borrow against your existing house to buy a bungalow before your sale completes. Or the lender might take security over the bungalow, or both properties. Ask exactly which addresses the loan documents cover.

Future use matters too. An empty house you intend to move into is different from a property bought solely to renovate and sell as part of a business.

Close family has a specific meaning in the rules. It includes parents, children, grandparents, grandchildren, brothers and sisters. It does not extend to every relative.

Tell a bridging specialist who lives in each property and who intends to move in. Explain any letting, business use or separate commercial space before asking for a quote.

A shop with a flat above needs closer assessment. Ask for a written explanation of how the borrowing is classified rather than relying on the estate agent's description.

The financial regulator's mortgage guidance explains how the rules treat different borrowers and properties.

Is a bridging loan classed as a mortgage?

A bridging loan secured on property is a form of mortgage borrowing. Calling it a loan does not remove the lender's rights over the property or make it an unsecured personal loan.

The security is the lender's legal claim over the property. In England and Wales, this is commonly called a charge. Your solicitor should explain the security documents before you sign them.

A first charge normally takes priority over a second charge when secured debts are repaid from a sale. A second charge can sit behind an existing mortgage. That position does not by itself decide whether the borrowing is regulated.

If your existing mortgage will remain, ask your solicitor whether the current mortgage lender's consent is needed. Do not assume that owning equity in the house lets you add another secured loan without checks.

Bridging borrowing is generally short term, with a plan to repay the balance from a sale or replacement finance. That repayment plan is often called the exit strategy.

The explanation of what a bridging loan is covers the basic structure. Regulation is a separate question from how the balance will be repaid.

How do regulated and unregulated bridging loans differ?

Regulated and unregulated bridging loans follow different rules. The category depends on who is borrowing, the security and the planned use of the property. Changing the label on the paperwork does not change those facts.

Loans for property businesses are often unregulated. Examples include borrowing to buy a rental property as a business, or to buy and renovate a property for resale without living there.

Business buy to let lending generally falls outside the mortgage rules that protect borrowers moving into their own homes. A house being residential property does not, on its own, settle the question.

Consumer buy to let is a separate category with its own protections. It can arise when someone lets a former home or an inherited property without setting out to run a property business.

Moving out and letting your old home therefore needs a proper assessment. Explain your previous use of the property, your intentions and any other rental properties you own.

A firm can offer both regulated and unregulated borrowing. Its presence on the Register does not mean every product it offers carries the same protections.

What protections come with a regulated bridging loan?

Regulated lending brings rules about clear information, responsible lending and how firms treat you. These protections govern the conduct of the firm. They do not remove the financial risks of borrowing.

For a loan secured on your home, take advice from a mortgage adviser or bridging specialist. A quote alone does not tell you whether the borrowing suits your circumstances.

With regulated mortgage advice, the person advising you must assess suitability. For bridging borrowing, that includes considering your repayment plan and why an ordinary mortgage would not be appropriate.

Ask for the reasons in writing. If your buyer has withdrawn, the assessment should address the changed sale position rather than treat the original completion date as dependable.

If something goes wrong, complain to the firm responsible first. Keep the quote, written advice, loan documents, emails and your account of what happened.

The Financial Ombudsman Service can consider eligible mortgage complaints. Its service is free.

If the firm does not resolve the complaint, check the Service's process and deadlines. Eligibility depends on the firm, the activity and your circumstances.

How do you check a bridging loan firm?

Search the Financial Services Register for the firm behind a bridging specialist and for the lender. Use the legal names shown on their documents.

Check the current entry and the permissions for the work involved. A firm appearing in a search result is not enough. Historic entries and restrictions can affect what it may do.

• Match the legal name and any trading name to the documents you received.
• Check the permissions for mortgage advice and lending, as relevant to each firm.
• Read restrictions and warnings rather than stopping at the firm's name.
• Use contact details shown on the Register to confirm you are dealing with the genuine firm.

Fraudsters can copy a real firm's name and paperwork. A matching name does not prove that an email, telephone call or payment request came from that firm.

If a permission is unclear, ask the financial regulator to help you check it. Ask the firm to explain which protections apply to the actual loan in writing.

How does the lender assess your repayment plan?

The lender decides whether to lend. A bridging specialist can discuss your circumstances and provide a quote, but the lender still needs to assess the application, security and repayment plan.

If repayment depends on selling your current home, expect questions about its value, mortgage balance and sale position. An asking price is not evidence that a buyer will pay it.

Work from the money left after the existing mortgage and selling costs. The full sale price will not be available to clear the bridging borrowing.

If repayment depends on a new mortgage, discuss income, existing debts and the property's condition with a mortgage adviser or bridging specialist. A property valuation alone cannot establish mortgage eligibility.

A loan to value calculation compares borrowing with the property's value. It cannot establish whether a loan is regulated or whether the lender will accept an application.

Try a lower property value in the calculator to see how your borrowing compares with the home's value.

Use the calculators for estimates. For the repayment planning itself, read about a bridging loan exit strategy.

What are the risks of a regulated bridging loan?

If the loan is secured on your home, your home is at risk and could be repossessed if you do not repay the loan. Regulation does not remove the lender's security.

Costs add up over time. If interest is added to the balance rather than paid as you go, the debt grows while you wait for the sale or replacement mortgage.

Ask a bridging specialist to set out all borrowing costs, legal costs, valuation costs and repayment charges in writing. Check which costs you must pay even if the purchase does not proceed.

A sale or a new mortgage may not happen as planned. A buyer can withdraw, a survey can lead to a lower offer, or a mortgage lender can decline the replacement borrowing.

Check what a delayed sale would mean for the repayment deadline. An extension depends on the lender's agreement and can bring further costs. Do not build your plan around receiving one.

Owning both homes also means paying their running costs. Insurance, utilities, maintenance and any mortgage payments continue while you wait. Check insurance conditions if either property will be empty.

Read how bridging loan costs build up alongside the quote, including what happens if you repay earlier or later than expected.

What should I check before buying my next home?

Ask your current mortgage lender about other options before committing to bridging borrowing. Discuss whether further borrowing or moving your existing mortgage could be possible, subject to its assessment.

Other choices include agreeing a different completion date or selling first and renting between homes. The guide to alternatives to bridging loans explains the trade-offs.

In England and Wales, an accepted offer is not binding until contracts are exchanged. A sale marked sold subject to contract is not the same as money available to repay a loan.

In Scotland, the contract becomes binding when missives are concluded. Check your position with your solicitor before committing to buy while your sale remains uncertain.

The Scottish Government explains offers and missives in Scotland. Your solicitor can explain how the purchase and sale commitments fit together.

Ask your solicitor about the tax position if you will own both homes. The rules differ across the UK, so do not assume a tax refund will be available to repay the borrowing.

Free guidance is available from MoneyHelper. For a loan on your home, take advice from a mortgage adviser or bridging specialist before committing.

Keep a written record of the properties used as security, the full repayment terms and your fallback plan. Make sure those documents reflect your current sale position.

Common questions

Last updated 6 November 2026