What is a bridging loan?

The answer to 'what is a bridging loan' is a short term loan secured on property. You usually repay it in one lump sum, often from selling a home or taking out a new mortgage.

What is a bridging loan used for?

You might use one when the money for your next home is tied up in the home you are selling. Borrowing before that sale completes lets you separate your purchase from your sale, but creates a debt you must repay.

For example, your buyer may have pulled out while the seller of your next home still wants to proceed. A bridging loan could fund the purchase while you look for another buyer.

A move into a smaller home can create the same problem. Your current house may be worth more than the flat you want, but that value is not cash you can spend until you sell or borrow against it.

Read about buying a house before selling for the choices this creates.

Other uses include auction purchases and property renovation. Those loans involve different checks, especially where the building does not yet qualify for a normal residential mortgage.

The reason for borrowing matters because the lender needs to understand both the purchase and how you will clear the debt.

Is a bridging loan a mortgage?

A bridging loan secured on property is a form of mortgage. It differs from the residential mortgage you would normally use to own and live in a home over the longer term.

With a repayment mortgage, regular payments gradually reduce what you owe. With bridging, the original borrowing usually remains due as a lump sum, even if you pay interest while the loan runs.

A first charge gives the lender first priority among secured lenders when the property is sold to recover debts. A second charge sits behind an existing first charge, usually your current mortgage.

Having a second charge does not remove your existing mortgage obligations. Your current mortgage lender may also need to consent.

Borrowing secured on a home you or certain family members live in, or will live in, is generally regulated. Business and investment borrowing may be unregulated, with different protections.

A bridging specialist should explain which rules apply. Read about regulated and unregulated bridging loans.

For a loan on your home, take advice from a mortgage adviser or bridging specialist. The property, its use and your circumstances all matter.

How does a bridging loan work in the UK?

You explain your move to a bridging specialist, including the property you own, what you want to buy and your repayment plan. A bridging specialist can talk through the borrowing and give you a quote.

The lender decides whether to offer a loan and on what terms. A quote does not mean the lender has agreed to release money.

The lender assesses the property offered as security and checks your proposed repayment source. Your solicitor deals with the legal work and explains the obligations you would take on.

The loan may be secured on your current home, the property you are buying, or both. Ask your solicitor to identify every property included in the security.

Once the lender's conditions and legal requirements are met, the money can be used for the agreed purpose. Your solicitor handles the purchase funds where you are buying a home.

When your repayment money becomes available, you clear the borrowing and any interest and charges due. Your solicitor can obtain the lender's statement showing what must be paid.

What do you need to get a bridging loan?

The lender needs more than an estate agent's asking price. It will assess the property's value and any borrowing already secured on it.

Equity means the property's value less the borrowing secured against it. Equity can support an application, but it does not tell you what the lender will offer.

Prepare the details a bridging specialist will need to understand your move:

• The address and ownership details of each property involved.
• Your mortgage balance and details of other secured borrowing.
• The agreed purchase price and where your deposit will come from.
• The stage of your sale, including any accepted offer and outstanding legal enquiries.
• Evidence supporting repayment, such as sale documents or mortgage information.
• Your income, spending, existing commitments and relevant credit history.

The exact documents depend on the lender and your case. Explain unresolved problems, such as a lease query or a buyer waiting for their own mortgage, rather than treating the sale as settled.

A property valuation for the lender is not a substitute for a survey about the condition of the home you are buying.

How does buying before selling work in practice?

This is only an illustration using house prices. Suppose your current home is expected to sell for £500,000 and the smaller home you want costs £350,000.

You may expect the sale to pay for the purchase. Until it completes, though, you cannot use its proceeds to pay the seller of the smaller home.

A bridging loan could fund the purchase, subject to the lender's checks. The house prices alone cannot show the borrowing needed because savings, existing debts and purchase costs also affect the position.

When your current home sells, the proceeds must cover any mortgage being cleared, the bridging repayment and selling costs before you know what remains.

If the buyer reduces their offer after a survey, less money will be available for repayment. Test a lower sale price as well as the price your estate agent hopes to achieve.

Enter the purchase price, buying costs including tax, and cash available before your sale completes. Use the Sale plan calculator separately to test a lower selling price, including all secured debts in the repayment figure.

Use the calculators to explore the figures. A calculation is an estimate, not a quote or a lending decision.

What does a bridging loan repayment plan mean?

Your repayment plan identifies the money that will clear the whole debt. A bridging specialist may call this your exit strategy.

For a house move, the plan is often to sell your current home. The lender needs to assess whether the likely proceeds will cover what you owe after existing debts and costs.

If you plan to take out a new mortgage instead, check that you and the property could meet that mortgage lender's requirements. A borrowing estimate is not a mortgage offer.

A closed bridging loan has a set repayment date linked to a confirmed event, such as a contracted sale. An open loan has a less certain repayment date, but still has a contractual deadline.

In England and Wales, accepting an offer normally does not bind the buyer. Exchange of contracts creates the binding commitment, so an accepted offer alone leaves uncertainty.

In Scotland, the contract becomes binding when missives are concluded. Ask your solicitor where your sale stands. The Scottish Government explains missives.

A realistic bridging loan exit strategy also considers what you would do if the expected money did not arrive.

How much does a bridging loan cost?

The costs add up over time. Interest continues to build while you owe the money, so a delayed sale can increase the total cost of the move.

Depending on the loan, interest may be paid as the loan runs, added to the debt for repayment later, or held back from the funds at the outset.

Holding back interest can leave less money available for your purchase. Adding interest to the debt increases what you must clear at the end.

Ask a bridging specialist for a written breakdown that covers:

• The cash available for your purchase after deductions.
• Interest and any payments required while the loan runs.
• The lender's fees and any fee charged by a bridging specialist.
• Valuation costs and legal costs, including the lender's legal work.
• Charges that apply when you repay, repay early or miss the repayment deadline.

Also budget for owning both homes, including insurance, utilities and any mortgage payments. Ask your solicitor about property purchase tax where you are buying.

Our guide to bridging loan costs explains what to check in the paperwork.

What are the risks of a 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.

A sale or a new mortgage may not happen as planned. Your buyer could withdraw, the survey could lead to renegotiation, or a mortgage lender could decline the application.

You still owe the bridging debt when your plans change. A delay can leave you paying for both properties while interest increases the repayment needed.

If the loan covers both homes, both form part of the lender's security. Moving into the new property does not release the old one from the loan.

Do not assume the lender will extend the term. Any extension needs its agreement and may involve further costs or checks.

If a sale stops progressing, tell the lender and your adviser before the repayment deadline. Discuss the remaining options while your solicitor checks the contractual position.

What are the alternatives to a bridging loan?

Ask your current mortgage lender about other options. Depending on your circumstances, these might include additional borrowing or transferring your existing mortgage to the next home.

Transferring a mortgage still involves checks and does not itself provide the sale money. Ask how any proposal would work if you own both properties at once.

You could ask the seller to accept a completion date that fits your sale. They may refuse, but an agreement could remove the need for separate short term borrowing.

Selling first and renting temporarily avoids relying on an unfinished sale to repay a bridging loan. It brings rent, storage and another move to budget for.

Read about alternatives to bridging loans, and get free guidance from MoneyHelper.

Before you commit to borrowing on your home, take advice from a mortgage adviser or bridging specialist. Bring your sale paperwork and a budget that allows for the sale taking longer than expected.

Common questions

Last updated 6 November 2026