Bridging Loans from 0.55%

UK Property Finance Ltd. is a whole market broker. We have established relationships with the most reputable lenders across the UK. This has given us access to the best deals and rates available. We are specialists in bridging finance. We can guarantee to partner our clients with the right lender to suit their unique requirements.

Whatever your goals are, we will find the perfect bridging loan for you.

  • Loans for any (legal) purpose
  • Business bridging finance for equipment and/or cash flow problems
  • Bridging loans to purchase auction property
  • Loans for tax issues
  • Loans to fund investment properties and buy-to-let properties
  • Bridging finance for renovation and/or refurbishment projects
  • Bridging solutions for chain delay issues for buyers and movers

Why choose UK Property Finance?

UK Property Finance can source the cheapest bridging finance deals for borrowers. We have no affiliation with any singular lender and have full access to the best lenders across the UK. This gives us access to deals you would not find on the high street or with the big banks.

We are an FCA-authorised and regulated master finance broker. We specialise in bridging finance for all purposes. This includes the purchase of overseas property!

We pride ourselves on our ability to arrange fast-bridging finance. We will be able to assess your situation quickly! We often give you a yes or no decision on the very same day.

What is a Bridging Loan?

Bridging finance is a short-term, secure loan that can be arranged quickly. A borrower can be approved in as little as a week! This makes it a perfect funding vehicle for purchases that require quick access to funds.

An infographic displaying why bridging loans are a good alternative funding solution when refused finance from more traditional loan sources. An infographic displaying why bridging loans are a good alternative funding solution when refused finance from more traditional loan sources.

Borrowers have various reasons for applying for a bridging loan. Most commonly, bridging finance is used to bridge the gap between buying a new property and selling their current one. They are often used when there is a delay in the chain. This is the most traditional use for this type of funding; however, these days, bridging finance is beneficial as a solution for raising much-needed cash for other purposes.

Bridging finance is a short-term funding vehicle, typically with a period of between 6 and 12 months.

To calculate exactly how much a bridging loan will cost, we have created a bridging calculator. Simply input your data into the relevant fields, and the bridging loan calculator will do the rest!

The bridging loan will need to be repaid within 12 months at the end of the term. There are no monthly payments made for this type of loan. Interest is only charged for the length of time that the finance is used. There are no early repayment charges if the loan is paid early.

Before approving you for funding, the lender will most likely require an exit strategy. This will outline exactly how you intend to repay the loan.

Bridging finance is particularly useful for borrowers who have not been accepted for more traditional loan products. Applicants may be refused other types of loans for the following reasons:

  • When an applicant is older than the new acceptable age limit, it can be difficult to secure a mortgage.
  • The applicant may be rejected due to being asset-rich but cash-poor. Therefore, they may not pass the affordability test in order to qualify for a long-term loan like a mortgage.
  • The applicant may have a poor credit history and is therefore not eligible for a mortgage.
  • If the property is uninhabitable, an applicant may be rejected until the property has been upgraded to a liveable state.
  • The property the applicant is trying to purchase may have a seller who is only willing to sell to buyers who are chain-free.
  • A loan could be required for a development opportunity, for which other funding products are not suitable.
  • Finance may be required for additional borrowing, such as a second charge.
  • The applicant may have a time limit to raise funds for urgent needs.
  • The applicant may only need a short-term, flexible funding option.
  • The borrower may want to secure the purchase of a new home, but the deposit is tied up in their current property, which has not yet been sold.

How bridging loans work

Many high-street banks in the UK have withdrawn their bridging finance packages. This has left a gap in the market that has been filled by smaller, specialist lenders. They have been successfully offering applicants the chance to secure a bridging loan at competitive rates. These lenders have made it possible for borrowers to access large amounts of funding. This funding is often approved in just a matter of days.

It is important to know how bridging finance works before you choose this as your option. We have all the expertise to assist you in securing the right type of financing for your requirements. You should consider the following facts:

  • Bridge loans are routinely secured against existing land or property. Proof of income and good credit scores may be required by the lender to be approved.
  • Applicants can typically borrow up to a maximum gross loan (net loan + all fees and interest) of 75% or 80% of the value of the property they wish to purchase. This will vary from lender to lender, with most willing to negotiate.
  • Bridging brokers with access to the ‘whole of market’ will be able to search and compare bridging lenders across the UK, finding you the best deal for your circumstances.
  • Bridging finance is generally repaid in full at the end of the term, usually up to one year, including all interest that has been incurred.

How bridging loans can be used

A bridging loan can be used to purchase a property when a borrower needs to complete a property transaction quickly. Obtaining traditional financing on time can be difficult. This can happen in several scenarios, such as:

Auction: When a property is purchased at auction, completion is required within a short period of time. This is usually within 28 days. However, bridging loans offer a viable solution as they can be swiftly arranged. This is with the understanding that you will refinance with a standard mortgage later on.

The bridging lender will release the funds within the 28-day period. They are aware that you will repay the loan through a lump-sum payment via a traditional mortgage. You then have 12 months to secure standard mortgage financing to pay off the bridge loan. A bridging loan advisor will guide you in selecting the right product that matches your needs.

Broken property chain: A bridging loan can provide the funds to complete the purchase of a property before your current property is sold. This can then be repaid when the other property is sold.

Buying a property that does not meet traditional lender criteria: This may be because of an unusual property type or a property in need of significant repair. A bridging loan can provide the necessary funds to purchase the property before the applicant secures more traditional financing options in the future.

Opportunity purchase: A borrower may come across a unique opportunity to purchase a property they cannot afford with their existing finances. A bridging loan can provide the funds to take advantage of the opportunity.

Property development: A borrower may want to purchase a property that requires refurbishment or development before it can be sold or rented out. A bridging loan can provide the funds to purchase the property and finance the renovation or development work.

What calculations will lenders use for a bridging loan?

Bridging loan lenders use a few different calculations when determining whether to approve a loan application and how much to lend. These calculations include:

  • Loan-to-value (LTV) ratio: This is the amount of the loan compared to the value of the property used for security.
  • Interest rate: The interest rate for a bridging loan is usually higher than a traditional mortgage. This is because it is a higher-risk short-term loan.
  • Repayment plan: Lenders will want to know how the borrower plans to repay the loan.
  • Affordability: Lenders will want to ensure that the borrower can afford to make the monthly interest payments; typically, the interest is retained, meaning there are no monthly payments. However, the lender will still have access to your income to make sure of this. They will typically look at the borrower’s income and expenses to determine whether they can comfortably make the payments.

Exit strategies for bridging loans

An exit strategy must be strong and make sound financial sense. Most exit strategies involve the sale of a property or re-financing with a mortgage.

Qualifying for a bridging loan

Bridging finance is often the best funding method for the following:

  • Applicants who can or cannot prove income
  • Applicants with a good or bad credit history
  • Applicants who are employed, self-employed, or unemployed
  • Companies or individuals
  • Applicants with equity in their home or those with access to a cash deposit
The table below resembles a typical £100,000 bridging loan
Interest Rate Monthly Interest
0.55% £550
0.70% £700
0.75% £750
0.85% £850
0.95% £950
1.00% £1,000
1.05% £1,050
1.10% £1,100
1.20% £1,200
1.25% £1,250
1.50% £1,500
Typical repayment cost (based on a rate of 0.55%) over 12 months (excluding broker fees)
Loan Taken Full Repayment
£50,000 £59,254
£60,000 £70,148
£70,000 £81,042
£80,000 £91,936
£90,000 £102,829
£100,000 £113,723
£110,000 £124,836
£120,000 £135,948
£130,000 £147,060
£140,000 £158,172

Criteria

Some lenders prioritise low-risk borrowers, while others specialise in specific niche areas.

There are 2 key points:

  • You will be required to provide some form of collateral or down payment.
  • A strong exit strategy is crucial to securing the loan.

Bridging loans are secured against property. Lenders typically do not require proof of income from borrowers. Lenders may still request to see this to have a better understanding of the borrowers’ circumstances. Your credit history may not impact your loan offer.

Some additional basic criteria include:

  • Being at least 18 years old
  • Have a secure property in the UK, UK expats can also qualify for bridging finance in the UK based on this.

The following criteria apply to our bridging loan applicants:

  • Commercial and residential property (all conditions considered, including uninhabitable)
  • Land and property in England, Wales, Scotland, and Northern Ireland
  • Land with or without planning permission or approval.
  • Loan sizes range from £20,000 upwards.
  • 1st, 2nd, or 3rd charges
  • Ltd. company and individual loans.
  • Competitive interest rates and bespoke deals.
  • 2nd charges following bridging finance and equity release mortgages
  • With or without proof of income
  • Employed, self-employed, unemployed, or retired
  • There are no age restrictions.
  • Loan terms range from 1 day to 3 years.
  • Up to 75% LTV (loan to value) without additional security is needed.
  • 100% or more LTV with additional security
  • Adverse credit is acceptable.
  • No valuation fee is possible for some borrowers.
  • There are no solicitor fees or representation on some bridging products.
  • Loans for virtually any (legal) use
  • There are no exit fees on the majority of products.
  • Quick approval and completion

Bridging Loan Pros & Cons

Over the last few years, the UK has seen the bridging finance market grow, expand, and diversify like never before. But what exactly is a bridging loan, and what are the benefits of this type of funding option when compared to more traditional financial products?

The table below briefly outlines the main pros and cons of a bridging loan.

Bridging Pros

Bridging Cons

Speed

Higher interest

Low cost

Security collateral

Simple process

Fees and charges

Repayment deferred

Linked to property value

All-purpose

  

Minimal paperwork

  

Repayment options

  

Flexible

  

 

We have further expanded on these points for your information accordingly, as can be read underneath.

What are the benefits of bridging finance?

There are some unique benefits when considering bridging finance that you won’t get with any other type of loan, with the following being the main advantages:

  • Speed of Arrangement: Bridging loans can be typically arranged in a very short space of time, often in as little as a few days, making them the perfect option for raising cash for time-critical purchases.
  • Low borrowing costs and competitive interest rates: UK Property Finance have access to all the market and therefore can find great deals on bridging finance from a wealth of specialist bridging lenders across the UK. Depending on your financial standing, you may be able to get lower rates and fees, but this will be assessed on an individual basis.
  • Simple application processes and lending criteria: Applications for bridging finances are considered on an individual basis by the lender and are generally open to all applicants, even those with a less-than-perfect credit history. Provided the borrower has sufficient security and a viable exit strategy, being approved is a relatively simple process, and proof of income may not be required.
  • Deferred Payment: A bridging loan is typically repaid in full, including any interest that has been accumulated, at the end of the loan period.
  • Available for all purposes: Provided the applicant can meet all their payment obligations, bridge loans can be used for any legal purpose whatsoever. They are especially useful for purchases that need to be done quickly, for example, when buying a property at auction.
  • Minimal Documentation: Bridging loans often need less documentation than standard loans, which simplifies the application and approval process.
  • Multiple exit strategies: Borrowers can repay the bridging loan in a variety of ways, including selling the property, refinancing with a standard mortgage, or seeking other finance.
  • Flexibility: Bridging loans have very flexible repayment terms, allowing borrowers to adapt the loan to their individual financial circumstances and needs.

How quick is a bridge loan?

Bridge loans are known for their speed compared to traditional loans, but the wait time can vary. In ideal situations, you might get an initial decision within a day and the funds within a week. However, a more typical timeframe is 5–21 days, depending on the complexity of your situation and the lender’s process.

Is it difficult to get a bridging loan?

Getting a bridging loan can be trickier than a regular loan. While lenders can approve them quickly, they involve higher risk for both you (due to high interest rates) and the lender (as they’re secured on property). To qualify, you’ll typically need a solid financial situation, a clear plan to repay the loan (often through selling an asset), and potentially good credit.

Do you need proof of income for a bridging loan?

Proof of income for a bridging loan is usually less crucial compared to traditional loans. Since bridging loans are secured on property and often repaid in a lump sum, lenders focus more on the value of the asset and your exit strategy (how you’ll repay). However, some lenders might request income documentation to assess your ability to cover interest payments or for future business with you.

Can I borrow money against my house to buy another property?

Yes, borrowing against your house to buy another property is possible. It’s achieved by leveraging your home’s equity—the difference between its value and what you still owe on your mortgage. There are ways, like remortgaging or taking out a second mortgage, to access this equity. But remember, this increases your debt and puts your home at risk if you can’t repay.

Do you make monthly payments on a bridging loan?

Bridging loans typically don’t require monthly payments like a traditional mortgage. You’ll usually repay the entire loan amount (principal + interest) in a lump sum at the end of the term, which is often short, around 1 year. However, some bridging loans may require monthly interest payments, so be sure to clarify the repayment structure with your lender before you borrow.

What are the cons of a bridging loan?

When looking at the positive aspects of bridging finance, it’s equally important to consider the disadvantages:

  • High Interest: When comparing the high-interest rates attached to bridging loans with more traditional long-term loans, you will find that the borrowing costs tend to be higher due to the short-term nature of this type of loan.
  • As a bridging loan is a secured loan, it is necessary to have sufficient collateral to offer the lender as security. Without enough equity or assets to guarantee the loan, finding a lender who is willing to take the risk will be difficult.
  • There are various fees and charges associated with bridge finance, which can add up quickly and significantly increase the overall cost of the loan. Many lenders charge a variety of administration, processing, and completion fees, so it is advisable to know exactly what costs you will need to take into account.
  • Dependency on property value: The amount a borrower may borrow through a bridging loan is frequently determined by the value of the property used as collateral, which may limit access to money for borrowers with lower-value properties.

What happens if you don’t pay a bridging loan?

Missing payments on a bridging loan can be serious. It can lead to hefty late fees, higher interest rates, and damage to your credit score. In more severe cases, the lender could repossess the property used as security for the loan or even take legal action to recover the debt. If you’re struggling to repay, it’s crucial to communicate with your lender early to explore options like extending the loan or finding alternative solutions.

How risky are bridging loans?

Bridging loans involve significant risks. While they offer fast access to funds, they come with high interest rates and short repayment terms, putting pressure on you to repay quickly. They’re secured on assets like property, so failure to repay could lead to repossession. A solid exit strategy, like selling a property, is crucial to avoid getting stuck in debt.

Do bridging loans show up on your credit report?

Yes, bridging loans will typically show up on your credit report. This includes both successful applications and unsuccessful ones. Having a bridging loan on your report isn’t inherently negative, but it can affect your credit score, especially if you have multiple applications or delinquencies. Make sure you understand the impact on your credit score before taking out a bridging loan.