When timing matters more than pricing, bridging loans shine. They’re secured, short-term facilities designed to complete purchases quickly, fund refurbishments, or release cash pending a sale or refinance.
How bridging loans work
• Term: typically 3–18 months (up to ~24 months with some lenders).
• Security: usually one or more properties (1st/2nd charge).
• Interest: often charged monthly (e.g., 0.6–1.2%/month); can be rolled up, retained, or serviced.
• Exit strategy: essential—sale, refinance, or other liquidity event.
Common uses
• Buy before you sell (chain breaks).
• Auction purchases needing 28-day completion.
• Light/heavy refurbishment prior to BTL or residential refinance.
• Short-term cash flow for businesses or tax bills.
Illustrative example
Purchase price £300,000 at auction; deposit £60,000; bridging loan £240,000 at 0.8%/month for 12 months. Exit plan: refinance onto a BTL after works. Legal/valuation/arrangement fees apply—budget for them up front.
Benefits
Speed, flexibility on non-standard properties, potential to roll up interest (no monthly payments), and ability to unlock value-add projects.
Risks
Higher interest and fees than term mortgages, reliance on a viable exit, and risk of repossession if the exit fails or markets turn. Valuation and legal processes are accelerated but still rigorous.
Alternatives
Further advances, secured loans, development finance, or standard remortgages if timing allows.
Why Everest Mortgages?
We maintain relationships with specialist bridge lenders, know which will move quickest, align the loan structure with your exit, and manage legal/valuation timelines to close on schedule.
Final thoughts
Bridging is a powerful tool when used strategically and with a clear exit. It’s not cheap money—so planning and professional advice are crucial.
Need speed and certainty? Speak to Everest Mortgages about bridging options at Everest-Mortgages.co.uk.
