A short-term, secured loan, a bridging loan is literally used to “bridge” a period of time between needing money and being able to repay via an exit strategy and can be used for several reasons:
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If you are close on completing a purchase and the chain falls apart this may allow funds to be put in place to ensure the process continues - the loan is then paid back when your property is sold.
If you're unable to raise more funds from your current lender to carry out work on the property due to the current LTV, a bridging loan may facilitate this work with a remortgage after works completion then allowing the increased value to be realised to repay the bridging loan.
Timelines are naturally compressed when purchasing at auction and the speed of a bridging loan may unlock an opportunity that will otherwise be lost.
With an open bridge there is no set repayment date whereas with a closed bridge there is a set date (normally based on a planned property sale date).
Considerations - The costs of a bridging loan will be more than a traditional mortgage so a full assessment of both the reasons for requiring a bridging loan along with exit strategy will be conducted initially.
If you think any of the above might be able to aid you in unlocking your home aspiration dreams, discuss with us today by clicking here:
LEGAL INFORMATION
Latitude Finance Ltd is an Appointed Representative of BrokerSync Ltd, which is authorised and regulated by the Financial Conduct Authority (1031981).
There may be a fee for Mortgage Advice. The precise amount will depend upon your circumstances and will be agreed upon following your initial meeting.
Equity Release, Investments, Pensions, Wills, Trusts, PMI and Estate Planning will be referred to our authorised third-party providers. Latitude Finance Ltd and BrokerSync Ltd are not responsible for any advice received from the third-party providers.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Conveyancing, Wills, and some forms of Buy-to-let Mortgages and Commercial Mortgages are not regulated by the Financial Conduct Authority.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured against it.
The guidance and/or advice contained within this website is subject to the UK regulatory regime and is, therefore, primarily targeted at consumers based in the UK.
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