Bridging loans come from specialist lenders, not high street banks

Most of the banks you use for everyday accounts—Barclays, HSBC, Lloyds, NatWest—do not offer bridging loans. A bridging loan is a short-term loan designed to cover the gap when you need cash before a property sale completes or before longer-term financing arrives. Because the loan sits outside normal mortgage lending and carries higher risk, it lives in a separate part of the financial system.

The lenders who actually offer bridging loans are specialist finance companies, some of which are owned by larger banking groups but operate independently. These include Bridging Finance, Precise Mortgages, Shawbrook, and dozens of smaller regional operators. A few traditional banks—Barclays and HSBC among them—do offer bridging through dedicated divisions, but you cannot walk into a branch and ask for one. You explore through a mortgage broker or directly to the specialist arm.

The reason for this split is straightforward: bridging loans are short-term, high-interest products with fast turnaround times. They sit outside the regulated mortgage market and carry different underwriting rules. A bank's retail division focuses on long-term mortgages and savings accounts; the bridging side is a different business entirely.

Key Takeaways

  • Bridging loans come from specialist lenders and dedicated divisions of larger banks, not from your everyday current account provider.
  • The loan is secured against property you own or are buying, and the lender expects repayment within months, not years.
  • Interest rates are higher than mortgages—typically 0.5% to 1.5% per month—because the lender takes on more risk and moves faster.
  • A mortgage broker can search multiple lenders at once and is usually free to you because the lender pays the commission.
  • Bridging loans are regulated by the Financial Conduct Authority, but the rules differ from standard mortgages.

How bridging lenders assess the loan differently

A bridging lender cares less about your credit score and income than a mortgage lender does. They care about the property itself—specifically, whether they can sell it quickly if you cannot repay. This is called the exit strategy. The lender needs to know how you plan to repay: by selling your current home, by completing a purchase that brings in funds, by refinancing into a standard mortgage, or by some other route.

Because the lender is taking a short-term position and moving fast, they will lend against property value more aggressively than a bank would. A traditional mortgage lender might lend 75% of a property's value; a bridging lender might lend 80% or 85%, depending on how confident they are in your exit strategy. This speed and flexibility is why bridging exists—but it costs more.

The process process is also different. You do not need a formal mortgage offer or a full employment history. You need proof of the property (a contract, a survey, or a valuation), proof of your exit strategy (a sale agreed in principle, a mortgage offer from another lender, or evidence of a refinance plan), and proof that you can cover the interest payments while the loan is running. Many bridging lenders will lend to self-employed people and business owners more readily than a high street bank would.

Where to find bridging lenders and what to expect

The fastest route is through a mortgage broker who specialises in bridging. Brokers have relationships with 20 to 50 lenders and can submit your case to multiple ones at once. They know which lenders are currently active, which ones move fastest, and which ones suit your specific situation. Because the lender pays the broker a commission, you do not pay a fee upfront—though some brokers charge if the deal falls through or if you withdraw.

You can also approach lenders directly. The main ones are Bridging Finance, Precise Mortgages, Shawbrook, Kensington Mortgages, and Paragon. Smaller regional lenders exist too, and some high street banks have bridging divisions: Barclays has Barclays Mortgages (bridging), and HSBC has a bridging product through its mortgage division. Searching "bridging loan lender" will show you the current market, but a broker saves you the legwork of calling each one.

The timeline is compressed. A traditional mortgage takes 8 to 12 weeks from process to completion. A bridging loan can move in 2 to 4 weeks, sometimes faster. The lender will order a valuation (not a full survey), check your exit strategy, and make a decision within days. Interest accrues daily, so the faster you repay, the less you pay in total.

What bridging costs and how interest is calculated

Bridging interest is quoted as a monthly or annual rate, and it is higher than a mortgage. You might see rates of 0.5% to 1.5% per month (6% to 18% per year), depending on the lender, the loan size, and how confident they are in your exit strategy. A larger loan with a clear exit strategy costs less; a smaller loan or one with uncertain repayment costs more.

Interest is calculated daily and usually rolled up—meaning you do not pay it monthly, but it accrues and is deducted from the loan amount when you repay. If you borrow £100,000 at 0.75% per month for three months, you will owe roughly £102,250 at the end (the exact amount depends on the daily calculation). Some lenders offer monthly interest payments instead, which costs more upfront but may suit your cash flow.

Beyond interest, you will pay arrangement fees (typically 1% to 2% of the loan amount), valuation fees (£300 to £1,000), legal fees (£500 to £2,000), and broker fees if you use one. These add up quickly, so bridging is only worth it if the gap is genuinely short—weeks or a few months, not years.

Regulated bridging versus unregulated bridging

Most bridging loans are regulated by the Financial Conduct Authority (FCA). This means the lender must follow rules about how they assess affordability, how they disclose costs, and how they handle complaints. If you are borrowing to buy a residential property, the loan is almost certainly regulated.

Some bridging loans sit outside FCA regulation—typically loans for commercial property, development finance, or loans where the borrower is a company rather than an individual. Unregulated bridging can move faster and has fewer affordability checks, but you have fewer protections if something goes wrong. Most people borrowing for a home will encounter regulated bridging.

The FCA rules mean that a lender must assess whether you can afford the interest payments, must give you a clear breakdown of costs, and must provide a key information document before you commit. This is the same framework as a mortgage, though the underwriting is faster and less stringent.

When bridging makes sense and when it does not

Bridging works when you have a clear, short-term need and a solid exit strategy. The classic case: you have found a property you want to buy, your offer is accepted, but your current home has not sold yet. A bridging loan covers the purchase price for three months while your sale completes. You repay the bridging loan from the proceeds of your sale, and you move into the new property.

Bridging also works for property developers who need to buy a site, renovate it, and sell it—the loan covers the purchase and works, and the developer repays from the sale. It works for people buying at auction, where you need funds in days, not weeks. It works when you are waiting for a mortgage offer to be issued and need to exchange contracts before the offer expires.

Bridging does not work if you are uncertain about your exit strategy. If you do not know whether your home will sell, or when, or for how much, a bridging loan becomes expensive and risky. If you need the money for more than six months, a standard mortgage or personal loan is cheaper. If you cannot afford the interest payments while the loan is running, you cannot afford bridging.

How to compare bridging lenders

Because bridging is not a standardised product, comparing lenders is harder than comparing mortgages. Each lender has different criteria, different rates, and different terms. A broker will do this comparison for you, but if you are comparing yourself, focus on these points:

  • Interest rate: Ask for the rate as a monthly percentage, not an annual one, so you can calculate the total cost for your expected loan period.
  • Arrangement fee: This is usually 1% to 2% of the loan amount and is charged upfront or rolled into the loan.
  • Exit strategy assessment: Does the lender believe your exit strategy is solid? If they are sceptical, they will charge more or decline.
  • Speed: How long from process to funds in your account? Some lenders promise 5 to 10 working days; others take longer.
  • Flexibility: Can you repay early without penalty? Can you extend the loan if your sale takes longer?

A broker can get quotes from multiple lenders in a day or two. Each quote is usually free and non-binding, so you can compare without committing. Once you choose a lender, they will order a valuation and move toward completion.

Frequently Asked Questions

Can I get a bridging loan from my high street bank?

Some high street banks offer bridging through specialist divisions—Barclays and HSBC do—but you cannot explore in a branch. You explore through a mortgage broker or directly to the bank's bridging division. Most of your everyday banking will still be with the retail side of the bank, but the bridging loan comes from a separate team.

What happens if I cannot repay the bridging loan when it is due?

The lender can extend the loan, usually for another month or two, but you will pay additional interest. If you still cannot repay, the lender can force a sale of the property the loan is secured against. This is rare if your exit strategy was realistic, but it is the lender's ultimate protection.

Do I need a mortgage broker to get a bridging loan?

No, but a broker saves time and money. They search multiple lenders at once, negotiate on your behalf, and are usually free because the lender pays them. If you approach lenders directly, you will spend days calling and comparing, and you may miss better deals.

Is bridging interest tax deductible?

If you are borrowing for a buy-to-let property or a business purpose, you may be able to offset the interest against rental income or business profits. If you are borrowing for a residential property you will live in, the interest is not deductible. Speak to an accountant about your specific situation.

How long can I keep a bridging loan?

Bridging is designed for short-term use—typically three to six months. Some lenders will extend for longer, but the interest rate may increase and the loan becomes expensive. If you need money for more than six months, a standard mortgage or personal loan is usually cheaper.