What Is a Bridging Loan and How Does It Work?

By PMS Mortgages · Published 14 November 2026 · Meet Ria Ali

A bridging loan is a short-term loan secured on property, designed to "bridge" a gap until longer-term money arrives. That money might come from selling a property, from a new mortgage once a refurbishment is finished, or from the sale of a development. Most bridging loans run for months rather than years, and they can be arranged far faster than a standard mortgage.

When are bridging loans used?

We most often arrange bridging finance for:

• Auction purchases. Most auctions require completion within around 28 days, which is usually too quick for a buy-to-let mortgage.

• Chain breaks. Buying your next home before your current one has sold, so you don't lose the purchase.

• Unmortgageable properties. A property with no working kitchen or bathroom, or one in poor repair, may not qualify for a mortgage until the work is done.

• Refurbishments and conversions. Funding the purchase and the works, then refinancing onto a buy-to-let or HMO mortgage at the improved value.

• Landlords raising funds quickly. Releasing capital against an existing property to secure the next purchase.

How does a bridging loan work?

The lender looks first at the property and at how you will repay, rather than mainly at your income. The key points are:

• Loan size. This is set as a percentage of the property's value (the loan to value, or LTV). Higher LTVs usually mean higher rates, and some lenders accept extra property as security.

• Interest. Rates are quoted monthly rather than annually. Interest can be paid each month, added to the loan ("rolled up") or deducted at the start ("retained"), so you may have nothing to pay until the end.

• Fees. Expect an arrangement fee, a valuation and legal costs, and sometimes an exit fee. We set out the total cost of borrowing before you commit, not just the rate.

• Term. Most bridges run from a few months to around 12 to 18 months, and lenders want to see you can repay within the term.

Regulated or unregulated?

If the loan is secured on a property that you or a close family member live in, or will live in, it is a regulated bridging loan and the Financial Conduct Authority's mortgage rules apply. A typical example is buying your next home before your current one sells. A bridge on a buy-to-let, an HMO or a development is usually unregulated. We arrange both, and we'll tell you at the outset which applies to you.

Why the exit matters most

The "exit" is how you will repay the bridge. For most of our clients it is one of two things: the sale of a property, or a refinance onto a longer-term mortgage. Lenders scrutinise the exit closely, and so do we. If your plan is to refinance, we check before you bid or exchange that a buy-to-let or HMO lender is likely to lend at the value and rent you expect, so you aren't left holding an expensive bridge.

Is a bridging loan right for you?

Bridging is a useful tool when speed matters or a property can't yet be mortgaged, but it costs more than a standard mortgage and the cost grows each month it runs. It works best with a clear, realistic exit and some margin for delay. For landlords with a portfolio, it can also be part of a wider plan. See our portfolio landlord refinancing checklist and our guide to HMO mortgages.

Talk to us

We are a whole-of-market broker based in Croydon, arranging bridging finance for landlords and home movers across Croydon, Surrey and London. Our mortgage advice is fee-free, and your first consultation is free and without obligation. If a fee applies on a larger or more complex case, we'll agree it with you before we proceed. Book a consultation or call us on 020 8668 6080.

Your home may be repossessed if you do not keep up repayments on your mortgage. Some buy-to-let and bridging loans are not regulated by the Financial Conduct Authority.