Whether you’re a homeowner stuck in a property chain or a first-time buyer looking to move fast, bridge loans can offer a powerful way to secure property when traditional mortgages fall short.
But how do they actually work, who can get one, and are they right for you?
Let’s break it down.
What Is a Bridge Loan?
A bridge loan (also known as a bridging loan) is a short-term secured loan, designed to ‘bridge the gap’ between buying a new property and securing long-term finance—like a mortgage or sale proceeds.
They’re most commonly used when you need fast access to funds to:
Buy a property before selling another
Purchase at auction
Snap up a renovation opportunity
Prevent a property chain from collapsing
How Do Bridge Loans Work?
Loan Term: Typically 3 to 18 months
Repayment: Monthly interest or rolled-up (paid at the end)
Security: Secured against a property or asset
Loan Size: Based on the value of the asset and your exit strategy
There are two types:
Open Bridge Loan: No fixed repayment date, ideal if you’re waiting for a property to sell
Closed Bridge Loan: Has a fixed repayment timeline, usually when contracts have already been exchanged
Can You Get a Bridge Loan If You Don’t Own a Property?
Yes—but the criteria are slightly stricter.
You’ll need either:
- Alternative security – This could be a property owned by a family member, business partner, or another investment asset.
- A strong exit strategy – For example, you’re buying to renovate and sell, or you have a mortgage-in-principle to refinance once the property is improved.
This makes bridge loans viable for first-time buyers, property investors, or developers, especially if:
You’re buying a property that isn’t mortgageable yet (e.g., no kitchen or bathroom)
You need to complete within 28 days (as with property auctions)
You’re working with joint partners who can offer security
How Can Bridge Loans Help You Get on the Property Ladder?
Bridge loans are often seen as tools for experienced property owners—but they can be a smart move for first-time buyers too, in the right circumstances.
They can help you:
Act quickly in a competitive market
Buy below market value and renovate
Secure a property others can’t due to mortgage restrictions
Buy at auction without a mortgage delay
Access funding when your income situation is complex (e.g. self-employed)
Once the property is purchased or refurbished, you can refinance onto a standard mortgage and pay off the bridging loan.
When Are Bridge Loans Commonly Used?
Buying a new property before selling your current one
Renovation or “flip” projects
Auction purchases (must complete in 28 days)
Chain breaks—when your buyer pulls out
Purchasing unmortgageable properties (e.g. structural issues or no kitchen)
Securing land or commercial property ahead of planning or funding
How to Get a Bridge Loan
- Plan your exit strategy – Will you repay through a property sale or mortgage refinance?
- Secure an asset – You’ll need something to secure the loan against (not always your own home).
- Speak to a specialist broker – They’ll help you find the right lender and deal structure.
- Prepare documents – Property details, income proof, valuations, and timeline.
- Undergo a property valuation – Required to determine the loan amount and risk.
- Solicitor manages the legal side – Then funds are released—often in just days.
Pros of Bridge Loans
Fast access to large amounts of funding
Flexible use (including non-standard properties)
Can be used by both homeowners and first-time buyers
Avoids missing out on time-sensitive purchases
Helps you stay in control of property chains
Cons to Consider
Higher interest rates than traditional mortgages
Short repayment term (usually 3–18 months)
Exit strategy must be strong and realistic
Additional costs (arrangement fees, legal, valuation)
