Bridging Loans
Bridging loans offer quick access to short-term funding when timing is critical. They’re often used to keep a property purchase moving, cover a gap in a chain, or fund renovations before a longer-term mortgage is in place. At Flagstone, our whole-of-market advisors guide you through every step of your bridging loan, from your first conversation to completion, with clear advice tailored to your situation.
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What is a bridging loan?
A bridging loan is a short-term, interest-only loan secured against property. It’s designed to “bridge” a temporary funding gap, for example when you’re buying a new property before selling your current one, purchasing at auction, or needing funds urgently. The loan is usually repaid within 12 months once the property sells or when you refinance onto a longer-term mortgage.
Is a bridging loan right for me?
A bridging loan may be suitable if you need funds quickly and have a clear repayment strategy in place, such as selling an existing property or remortgaging. They’re commonly used in time-sensitive situations, including chain breaks or renovation projects with tight deadlines. Because bridging loans are short-term solutions, it’s important to understand the costs and risks before proceeding.
Who should consider a bridging loan?
Bridging loans can work well for homebuyers caught in a property chain break, property investors and developers, or homeowners funding refurbishments or extensions. They’re also frequently used by buyers purchasing auction properties, where completion timescales are much shorter than with standard mortgages.
Costs & timescales
The costs associated with bridging loans typically include interest, an arrangement fee, valuation fees, and legal costs. Many lenders can issue a decision in principle quickly, making bridging loans suitable for urgent purchases. Exact costs and timescales vary depending on the property, loan amount, and your exit strategy, which is why tailored advice is essential when planning to get a bridging loan.
Understanding bridging loans
Before deciding whether a bridging loan is right for you, it’s important to understand how these loans work in practice and when they may be suitable. The basics below explain how bridging loans are structured and what to expect.
How bridging loans work
Bridging loans are short-term, secured loans and are usually interest-only. They’re repaid through the sale of a property or by switching to a longer-term mortgage. Some bridging loans are regulated by the Financial Conduct Authority, typically when secured against your main residence, while others are unregulated, this will impact the type of protection applied to these loans. Approval times, loan-to-value limits, and required documentation depend on your circumstances and the lender.
When a bridging loan may be suitable
You might consider a bridging loan if you’re buying a new home before selling your current one, preventing a property purchase from falling through because another sale has been delayed or withdrawn, purchasing an auction or below-market-value property, or financing refurbishments ahead of refinancing.
How Flagstone supports you through the process
Our advisors have whole-of-market access to regulated and unregulated bridging options. We compare suitable lenders, explain costs clearly, and help you prepare the required documents and repayment strategy. You’ll be supported through application, underwriting, valuation, and completion, with dedicated admin support from our in-house processing team.
Next steps
Getting started is simple. You can request a call-back, complete a short enquiry form, or speak to us by phone. Your initial consultation will focus on your timeline, property details, and repayment plan, so we can assess suitability and outline your options. Our friendly team at Flagstone is here to support you throughout the process, taking the time to understand your needs and help you move forward with confidence.
A bridging loan is a short-term finance option that helps you complete a property purchase before selling your existing one or while waiting for funds to be released. The loan is secured against property and usually repaid in full at the end of the term, either through sale proceeds, refinancing, or other funds. Interest is charged monthly, and you can either pay it each month or roll it up to settle at completion.
A bridging loan can be useful if you need quick access to funds to secure a property or complete a chain-break purchase. It’s most effective when you have a clear exit strategy – for instance, selling another property or refinancing onto a mortgage. Flagstone’s advisors can help you assess whether a bridging loan suits your circumstances and long-term plans.
Bridging loans come with higher costs and short repayment periods (usually 6–12 months). If your property sale or refinance is delayed, you could face extra fees or need to extend the loan. You’ll also be paying interest on two loans at once if you still hold your original mortgage.
Typical bridging loan rates range from 0.5 % to 1.5 % per month (around 6 %–18 % APR) depending on your loan-to-value (LTV), term, and credit profile. You’ll also pay arrangement, valuation, and legal fees, plus a possible exit fee when the loan is repaid. Flagstone’s team calculates all costs upfront so you know the total commitment before proceeding.
To apply for a bridging loan, you’ll need to provide details of the property, its valuation, the amount you wish to borrow, and – most importantly – your exit strategy (how you’ll repay the loan). Lenders also review your credit history and the security’s value. A specialist adviser like Flagstone can identify suitable lenders and handle the application from start to finish.
You can often receive a decision in 24–48 hours, with funds released in one to three weeks depending on the lender, property valuation, and legal checks. Working with an experienced broker can speed up the process, especially when deadlines are tight or chains are at risk of collapsing.
Rates for bridging loans are usually quoted monthly, ranging between 0.5 % and 1.4 % per month, influenced by loan amount, term, and risk level. The lower the LTV and the stronger your exit strategy, the better the rate. Flagstone will compare deals across the market to find the most competitive rate for your scenario.
Most lenders require you to retain at least 20 %–30 % equity in the property after the loan is taken out. Borrowing is typically capped at 70–80 % of the property’s combined value to ensure adequate security. Flagstone will assess your assets and repayment route to confirm the minimum equity you’ll need.
Yes, bridging loans are usually interest-only, with interest either rolled up and paid at the end, or serviced monthly during the term. The capital is then repaid in one lump sum once the property sale or refinance completes. Your adviser can help choose the repayment structure that best fits your exit plan.
A bridging loan is best used when timing is critical. For example, buying a new property before your current one sells, purchasing at auction, or funding short-term refurbishment projects. It’s not designed as long-term finance, so you should have a clear exit plan before committing. Flagstone’s brokers will ensure a bridging loan is suitable before proceeding.
