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Bridging loans are used to quickly access a large sum of money. This can be to buy or develop a property or raise cash for an investment opportunity. Depending on the circumstances, individuals and businesses can typically borrow between £50,000 and £500 million.
Bridging finance is a popular strategy for property developers looking to refurbish any type of property and to sell for a profit or to keep it for investment purposes. Since bridging loans can be accessed in weeks rather than months, developers can move forward with the assistance of a bridging loan broker and arrange to repay the loan.
A bridging loan is also used by individuals who want to purchase a new property but haven’t yet sold their current one. This is useful for people who don’t want to miss the opportunity to buy the perfect property and are confident their house will be sold. A bridging loan allows a quick offer to be made.
Bridging loans differ from other types of finance in that you borrow the money for a relatively short period of time (often around 12 months), and instead of making monthly repayments, the loan and interest are ‘rolled up’ and paid off in full at the end of the term.
Your bridging loan broker will discuss with you your exit strategy when applying for a bridging loan in the UK. This strategy details how you expect to repay the loan and interest at the end of the term - this is usually through the sale of a property, either one you have refurbished with the bridging loan funds or your current property if you have looked to buy your next property before the sale of your current one.
The two types of bridging loans available are open and closed bridging loans. You will be given a fixed repayment date with a closed bridging loan. These loans are typically offered if a property purchase has been agreed in principle and contracts have been exchanged. All that's needed in this instance is the finance provided by the loan.
Sort Finance is the best bridging loan broker, along with providing residential properties. We can also assist you with securing bridging finance for residential & commercial properties such as apartments, offices, retail spaces, and industrial units.
These short-term lending solutions can facilitate purchasing, renovating, or refinancing commercial real estate, allowing businesses to seize time-sensitive opportunities.
In general, lenders are willing to provide funds that are anywhere between £25,000 and £500 million. However, the amount you can borrow depends on several factors, including the purpose of the bridging loan and the value of the property the loan is being taken out against.
Although the bridging finance can be anything up to £500 million, the amount you will be able to access will depend on the property’s loan-to-value ratio. This is usually 75%, meaning that the bridging loan you are eligible for is 75% of the property value. There is a possibility that you may be able to borrow more than 75% value of the property. Speak to our bridging loan advisers for the best offer.
It is important to note that, if you take out a ‘first-charge’ bridging loan, this means that the bridging loan is paid off as a priority. If it’s a second charge loan, the first-charge mortgage lender will be paid back first. This might impact the amount you are allowed to borrow.
Bridging loans can be swift to arrange, but they require detailed information that we will prepare for you. For example, the lender will want evidence of your financial circumstances, the reason for the bridging finance, and your repayment (or exit) strategy.
First, consider why you need a bridging loan and its purpose. Decide how much you will need to borrow and for how long. Then, consider your property. How much is your property worth, do you currently have a mortgage, and what kind of equity or deposit do you have to put towards the property? All of this information is fundamental to the process of finding a suitable bridging loan.
When we have the background information, we can search for a lender to offer you a suitable bridging loan. At Sort Finance, we specialise in arranging bridging loans and can place you with the right lender and product based on your goal.
Bridging loans in London are available to anyone who qualifies, which means individuals and businesses of various kinds. These loans are short-term financing options for people who need to purchase any property or pay large sums upfront before their properties are sold. However, it isn’t only property developers who can benefit from this type of finance.
In some cases, bridging loans are used by those who want to move home but haven’t yet sold their property or those who buy from property auctions – in this case, the property must be paid for usually by swift finance options such as a bridging loan, even if you’ve yet to sell your current property.
Take a look at our table below to get an idea of how much interest will cost per month. This is because bridging loans are different from standard mortgages – interest is calculated monthly and so can be very expensive in some cases.
The table helps to explain the costs of bridging loans per month based on different interest rates.
| Interest Rate | Cost per Month |
| 0.43% | £430 |
| 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 |
FCA disclaimer
Based on our research, the content contained on this website is accurate as of most recent time of writing. Lending criteria and policies may change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information.
The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage / financial advice and work only for firms who are authorised and regulated by the Financial Conduct Authority.
They will offer any advice specific to you and your needs. Some types of buy to let, commercial, bridging, mortgages are not regulated by the FCA.
Please think carefully before securing other debts against your home or releasing equity from a property you own. As a mortgage is generally secured against your home or your investment property, it may be repossessed if you do not keep up with repayments on your mortgage.
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Sort Commercial Solutions LTD is authorised and regulated by the Financial Conduct Authority under registration number 949625. Registered in England and Wales under registered number 13207282. Registered office: Kemp House 152-160 City Road, London, EC1V 2NX
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