Bridging Finance
Bridging Finance
Short-term funding, arranged fast, when the timing of a deal matters more than the rate.
What it is
Short-term finance, secured against property.
A bridging loan is short-term finance secured against a property. It is designed to move quickly and repay quickly — typically between one and twenty-four months. It exists to solve a timing problem that a term mortgage cannot.
The rate is higher than a term loan because the lender is pricing two things a term lender does not: speed of delivery and the risk of a defined exit. Underwriting is compressed into weeks rather than months, and the lender's return is capped by a short horizon.
What you are buying is not cheap money. You are buying the ability to complete on a deal that would otherwise fall away. Priced against the value of the transaction, the finance is usually the smallest number on the page.
Regulation
Regulated or not, and why it changes everything.
Bridging splits into two markets. A bridge secured against a property that you or an immediate family member occupy, or intend to occupy, is a regulated mortgage contract and sits under FCA regulation. A bridge on an investment property, a development site or a commercial asset held through a company is generally unregulated.
The distinction is not academic. It changes the lender panel, the documentation required, the timescales you can realistically expect, and the protections available to you. Regulated bridges carry affordability testing, prescribed disclosure and access to the Financial Ombudsman Service. Unregulated bridges move faster and flex further, but the consumer protections do not apply in the same way.
Edge Commercial Finance advises on unregulated bridging — investment, commercial and development security held personally or through a company. We do not advise on regulated bridging secured against your own or a family member's home. Where an enquiry falls into regulated territory, we will say so at the first conversation and refer you to a firm with the appropriate permissions rather than take it forward.
Typical use cases
When a bridge is the right tool.
Auction purchases against a 28-day deadline
Breaking a chain on a residential purchase
Buying a property no lender will take in its current condition
Refurbishment before refinance or sale
Raising capital against an existing asset
Bridging a gap while planning permission is secured
Developer exit — replacing a development facility on a completed but unsold scheme, usually at a materially lower rate
Second charge bridging — raising capital behind an existing mortgage without disturbing a favourable rate
Light versus heavy refurbishment — where a bridge becomes a refurbishment facility with staged drawdowns
Indicative terms
What the market currently looks like.
| Measure | Typical range |
|---|---|
| Monthly interest rate | 0.55% – 1.25% |
| Maximum LTV | Up to 75% |
| Term length | 1 – 24 months |
| Arrangement fee | 1.5% – 2% of loan |
| Exit fee | 0% – 1% (deal-dependent) |
| Minimum loan size | £150,000 |
| Maximum loan size | £25m+ |
| Typical time to completion | 2 – 4 weeksFrom 5 working days where title is clean and dual representation is available. Most cases run to two to four weeks once valuation and legals are factored in. |
Market ranges shown for guidance only. Your terms will depend on the asset, the exit and your experience.
Ranges reviewed February 2026. Market conditions change — confirm current terms before relying on these figures.
Exit strategy
The exit is the deal.
A bridge is underwritten on how it will be repaid, not just on the asset it is secured against. Get the exit right and everything else follows.
Sale of the asset
Buy, refurbish, sell. The lender will want to see a realistic sale price, a marketing plan and a timeline that fits inside the term with room to spare.
Refinance to term
Bridge now, refinance onto a commercial mortgage or buy-to-let once the property is lettable or trading. The lender will want comfort that the term product is achievable on the numbers.
Sale of another asset
Repay from the proceeds of a separate property already on the market or under offer. Expect the lender to look at the sale in detail — price, buyer, chain and timing.
If the exit is not credible, the bridge is not either. This is the first thing any lender will test.
Overruns
When the exit slips.
Every bridge is written to a date, and a meaningful number of them do not hit it. What matters is what happens next — and borrowers almost never ask before they sign.
Extensions
Usually available, usually at a higher rate, usually with a fee. Negotiate the extension terms at the outset, not at month eleven.
Default rates
What the rate becomes if the term expires without redemption — typically 2% to 3% per month. Read this clause before anything else in the offer.
Refinancing out
A development exit bridge or a term product can rescue an overrun, but only if the asset and the borrower still qualify. Start that conversation at month eight, not month twelve.
Ask for the default rate and the extension terms before you accept. They are the two numbers that decide what a bad month costs you.
Auction
Auction finance, and the 28-day clock.
At auction the contract is exchanged on the fall of the hammer. The deposit is paid immediately and is non-refundable, and completion is typically twenty-eight days — occasionally fourteen. Miss it and you lose the deposit and remain liable under the contract.
The practical implication is simple: finance is arranged before bidding, not after. That means a lender who has seen the legal pack, an indication written against the specific lot, a view on value that survives the hammer price, and a clear exit already articulated. A generic agreement in principle is not the same thing.
Where the timetable is tight, title insurance can remove the need to resolve minor title defects before completion, and dual representation — one firm acting for both borrower and lender — compresses the legal process considerably. Both need to be agreed at the outset, not discovered in week three.
Cost calculator
Price a bridge on your numbers.
Change the inputs to see how rate, term and interest treatment move the total cost of finance.
Your deal
Payable on completion.
Valuation, lender legal, borrower legal.
Interest is deducted from the gross loan up front, reducing the net advance.
Your figures
- Gross loan
- £325,000
- Net advance released to you
- £285,350
- Total interest over term
- £33,150
- Arrangement fee
- £6,500
- Exit fee
- £0
- Broker fee
- £3,250
- Other costs
- £3,500
- Total cost of finance
- £46,400 · 14.28% of loan
- Day one funds required from you
- £181,750
- Redemption figure at exit
- £325,000
AssumptionsShowHide
Included
- Lender interest across the full term, based on the treatment selected.
- Lender arrangement fee, calculated on the gross loan.
- Lender exit fee, calculated on the gross loan where entered.
- Broker fee, payable on completion.
- An estimate for valuation, lender legal and borrower legal costs.
Not included
- Stamp Duty Land Tax and any other purchase taxes.
- Insurance, ground rent, service charges and holding costs.
- Refurbishment or works costs, and any drawdowns beyond day one.
- Early redemption charges or extension fees.
- VAT on professional fees where applicable.
Illustration only. Not a quote, offer, or decision in principle. Confirm all figures with the lender before you rely on them.
Free download
Take the list with you.
A one-page bridging deal checklist — everything a bridging lender needs to price and complete inside four weeks. Free, no follow-up unless you want one.
FAQ
Questions we hear most often.
Have a deal in front of you?
Send us the outline. You will get a straight answer on deliverability and indicative terms — not a form response.
Same working day response.