Get Fast Funding For Your Property Purchase
Get a fast bridge loan to fund a fast purchase today. Get the best deal with ABC Finance.
Over 30,000 loan-seekers helped
5* Rated Business Loan Broker
Receive your funds in as little as days
Market-leading interest rates
Experienced Business Loan Advisors
No Broker Fees
Property purchase bridging loans by ABC Finance
Buying a house with a bridging loan, a short term loan secured against property, can be a great way to complete a purchase quickly. Bridging loans are also useful in situations such as a renovation investment where mainstream finance, typically a mortgage, may not be available.
Bridging finance is a unique type of finance, it is a fast and flexible form of funding yet not appropriate in all situations. Before taking out a bridging loan, it’s important to understand how they work and whether an alternative product would be more suitable.
While bridging finance is an excellent tool in certain situations, it should be used with caution and only where a suitable exit strategy is in place. For example, using a bridging loan to purchase a property because affordability is too tight to get a mortgage is likely to just push your problem into the future and solve very little.
Speak to Lee about financing a property purchase
If you need a bridging loan quickly to facilitate a property purchase then ABC Finance is here to help, speak to Lee today for a free no obligation quote.
Lee Hemming is a specialist bridging loan advisor at ABC Finance with years of experience arranging the right finance solutions for our customers. Call, email or contact ABC Finance today to learn more.
Request a free property finance quote
Complete the form below to receive a fast and free quote from our expert property financing team.
How much can I borrow with a property bridging loan?
We can arrange bridging loans from £10k to £250m, however the amount you can borrow with a bridging loan varies and depends on the equity, or value, of your property, minus any outstanding mortgages or loans you have secured against it.
The majority of lenders will loan up to 75% of the property’s value, also known as Loan To Value (LTV.) Loans up to 75% LTV are regulated by the Financial Conduct Authority, however, unregulated loans beyond this figure are possible up to 85% LTV.
In some circumstances a 100% loan will be possible, however, this is rare and usually for commercial properties where other assets are used in addition to property to secure the loan. Preferential bridging loan rates will usually apply to loans at under 50% LTV.
Use our bridging loan calculator to work out your LTV and see how much you could borrow.
Bridging loan criteria
Residential, commercial property or land acceptable
Available to individuals, partnerships, LLPs, Ltd companies, offshore companies, foreign nationals and pension funds
Minimum applicant age 18 years – no maximum age
Available in England, Scotland, Wales and Northern Ireland
Adverse credit accepted (on a case by case basis)
Key Features
Max LTV
Up to 85%
Interest rate
From 0.39% per month
Charge types
1st, 2nd & 3rd considered
Term
1-36 months (maximum 12 months for regulated loans)
Interest type
Added to the loan, deducted or serviced
Completion timescale
5 days – 3 weeks
How quickly can I access the money?
Bridging loans can be arranged relatively quickly, ordinarily within 5-21 days. If you are looking for fast funding for a property purchase then get in touch as ABC Finance can work with our wide panel of lenders and get a funding decision in hours. Bridging loans can be made available in a matter of days in some cases.
Typical bridging loan timescales:
Loan
Timescale
Up to £300k
3 Days
Up to £750k
7 Days
£750k or more
3 Weeks
How much deposit is needed for a house purchase bridging loan?
The minimum deposit required for a bridging loan is 20% of the value of the property, or 25% for regulated bridging loans. When deducting the interest from the loan, meaning you have no monthly payments to make this will reduce your net loan, meaning you may need a higher deposit.
If you’re unsure how much deposit you would need, our team will be able to quickly calculate this for you, just get in touch.
Why choose ABC Finance?
Established 2000
ABC Finance has been helping people get the best deal since 2000.
FCA Regulated
We’re fully regulated by the Financial Conduct Authority
We Save You Money
Our entire ethos is built around helping people save money.
What our customers say
Anita Q
Trustpilot
I cannot thank Richard and Sophie enough for helping me at a time when I needed financial guidance and support. They were simply amazing.
Daniel M
Reviews.io
Very professional in every way, the fees are extremely reasonable compared to other companies, thanks guys
B. Barber
Reviews.io
I am not normally one to leave reviews, however, the service I have received from ABC Finance is exceptional and I would recommend them to anyone who is struggling to find a reliable service.
Our awards & recognition
Commercial Finance Service of the Year
2022 Winner
Best Commercial Financial Experts (Midlands)
2022 Winner
Commercial Finance Company of the Year
2022 Winner
Best Broker: Commercial and Specialist Finance Broker of the Year / Bridging
2022 Nominated / 2020 Shortlisted
Request a fast & free property finance quote
Complete our quote request form below and a member of our bridging loans team will find the best deals for you.
Fast and Flexible
Property bridging finance solutions with written terms in 2 hours and funding within 72 hours
Expert Team
Friendly specialist team to guide you through the process
A range of funding options
Loan from £10k to £2m for residential and commercial purposes
Low Interest Rates
Rates from as low as 0.43%
Learn more about bridging loans for property purchases
We’ll now break down some of the key points that you should understand when looking to use a bridging loan for a house purchase.
In this article:
- What is bridging finance?
- How do bridge loans work?
- Are bridging loans available for house purchases?
- When might a bridging loan be used for a house purchase?
- What interest rates will I pay on a house purchase bridging loan?
- How is a bridging loan different from a mortgage?
- What are the advantages of using a bridging loan for a house purchase?
- What are the alternatives to a bridging loan when buying a house?
- How do I apply for a bridging loan?
- What documents will I have to provide to get a bridging loan for a house purchase?
- Frequently Asked Questions
What is bridging finance?
A bridging loan is a short-term loan that is secured against property; the name bridging loan comes from the phrase ‘to bridge a gap’ as this type of loan is used whilst you are waiting for funding from another source. For example, if you’ve purchased a house and are waiting to sell your own property.
Bridging loans for residential properties ordinarily have a 12 month repayment term and you will be able to raise up to 75% of the equity, or value, of your property minus any loans against it. Loans up to 75% equity are regulated in the United Kingdom by the Financial Conduct Authority.
How do bridge loan work?
A bridging loan allows you to borrow money quickly and is paid to you as a lump sum to enable you to purchase a property or land. This type of loan is often used before a sale has completed so home buyers can secure a property.
Interest charges are usually ‘rolled up’ into the loan, leaving you with no monthly interest payments to make until the end of the loan term.
Repayment of a bridging loan is usually funded through the sale of your property or by taking out a remortgage. Your plan for repaying the loan is known as your exit strategy.
You can read more about how bridging loans work in our expert blog.
An example of how a bridging loan would work:
- You want to buy a house for £600,000 and you need to put down a £200,000 deposit and borrow the rest on a mortgage.
- Your house hasn’t sold yet and you only have £50,000 in savings.
- You ‘bridge’ the gap and get a bridging loan for £150,000 to cover the deposit until you sell your house.
- When your house sells you pay off the bridging loan with interest (accrued on a monthly basis and payable at the point of loan exit.)
Are bridging loans available for house purchases?
Yes, bridging loans can be arranged for house purchases. This is a common use of bridging finance and is offered by most bridging loan brokers and lenders. Taking a short term loan to secure a house takes the uncertainty out of the purchase process.
When using a bridging loan to purchase a property whilst waiting for your own home to sell, most lenders will allow you to borrow against both properties, in many cases removing the need for a deposit.
What types of property can I purchase using a bridging loan?
Bridging loans can be used to purchase land or a diverse range of properties and are a good temporary option in many situations.
- Houses
- Bungalows
- Apartments
- Flats
- Semi-commercial property
- Property in need of repair or refurbishment
- Holiday homes
- Land
- Commercial property
- Unmortgabeable property (subject to having a suitable exit strategy)
How long does it take to buy a house with a bridging loan?
When buying a house with a bridging loan, the transaction can usually be completed in between 5-14 days. The legal process may delay this slightly on some purchases, although when this happens, it shouldn’t add more than 1-2 weeks to the overall process.If you are looking to arrange a bridging loan in a matter of days then this is possible in some cases. Call ABC to discuss fast bridging loans and read our guide on getting written terms within hours and funding within days.
Can bridge finance be used for auction purchases?
Yes, bridging loans are often used by property investors and developers for auction purchases. The short duration of the application process and quick access to funds make bridging loans the ideal choice for purchasing property at auction where a fast completion time is key.
When planning to use a bridging loan for this purpose, it is crucial to have a clear exit plan in place, such as refinancing or the resale of the property, to repay the loan within the agreed term.
Consulting with a credit broker or bridging loan broker can provide valuable tips and guidance to ensure that the financing meets the requirements of your auction purchase.
Bridging loans for an auction purchase is known as auction finance.
Can a bridging loan help with property chain completion?
Bridging loans are a useful tool for those in a property chain. A short term loan allows applicants to access the necessary funds to complete their property purchase while waiting for the sale of their current home.
This ensures that they don’t miss out on your next house or property investment opportunity owing to delays securing a mortgage.
Bridging loan providers typically offer flexible loan terms that can be tailored to fit the specific situation of property chains, reducing risks and facilitating a smooth transaction for buyers and investors alike.
The speed and flexibility of bridging loans allows a fast, hassle-free way to repair a property chain that is at risk of failure.
When might a bridging loan be used for a house purchase?
Bridging loans are commonly used to purchase a house in the following situations:
Purchasing a property quickly – If you’re in need of a quick property completion, a bridging loan can be used to finance your transaction.
Purchasing a property before selling your existing one – When you need to complete a property purchase before selling your current home, a bridging loan can be used as a fast, temporary solution and can be repaid on the sale of your current property.
Buying a property in need of major refurbishment – When buying a property that is in need of major refurbishment, traditional mortgage lenders may be unwilling to lend until the work is complete. In this situation, a bridging loan can be used to purchase the property, and is then repaid once the refurbishment is finished using a mortgage.
Breaking a chain – A property chain is where parties are reliant upon others to complete their sale; for example a seller may need to wait for their buyer to sell their own home. Using a bridging loan makes funds available quickly allowing a house purchase to progress.
Buying a property at auction – Auction purchases must usually be completed within 28 days. This is quicker than most mortgages can be arranged, but comfortably long enough for an auction finance bridging loan to be completed. Additionally, auction purchases often involve properties in need of renovation or repair where traditional finance products would not be available.
What interest rates will I pay on a house purchase bridging loan?
The interest rates charged on bridging loans usually vary depending on the loan to value (LTV), property type and why you are taking out the loan. The lowest rates are usually reserved for applications at 50% LTV or below and secured against a residential property that won’t be subject to heavy refurbishment.
Interest rates tend to follow the Bank of England interest rate, and this can vary. Small changes to interest rates can make a significant difference to the amount you pay back. If you are looking for more certaintanty around your repayments then some lenders offer a fixed rate bridging loan.
Your LTV may be slightly reduced for refinance bridging loans.
As a guide, here are some example bridging loan rates:
Bridging loan type
Maximum LTV
Rates from
Regulated bridging loans
75%
0.41% per month
Residential bridging
85%
0.39% per month
Semi-commercial
75%
0.39% per month
Land
65%
0.39% per month
Commercial
75%
0.39% per month
Property refurbishment
85%
0.39% per month
How is a bridging loan different from a mortgage?
A bridging loan can appear to be very similar to a mortgage, however, there are some clear differences. Whilst a bridging loan and a mortgage are secured against property, a bridging loan is a short-term financial product, not meant to be used for more than a year in the residential market.
Mortgages are long term products and less flexible than bridging loans in terms of the type and condition of property that can be mortgaged.
The speed of arrangement is also a key difference between these two financial products. Bridging loans can be arranged quickly, whereas mortgages take longer to complete. If you need fast, flexible funding to secure a property urgently then a bridging loan could be the right option for you.
There are a number of fees associated with bridging loans and you will be required to pay your lender’s legal costs. Mortgages incur comparatively fewer fees than bridging loans although you will be charged a fee for early repayment, which is not the case for a short term bridging loan.
What are the advantages of using a bridging loan for a house purchase?
When you are looking to purchase a house a bridging loan can facilitate the transaction during the period when you are waiting for funds, for example by selling your own home. Once you have sold your property you will be in a position to take a longer term loan in the form of a mortgage at a lower rate.
There are advantages and disadvantages to taking out a bridging loan to purchase a house; here we list the key points to consider if you are thinking about this type of finance.
Advantages of using bridging finance
They can be arranged quickly
Bridging loans can be arranged quickly and can facilitate urgent transactions. If you are in need of fast funding for a significant amount then a bridging loan is a useful and flexible way to bridge a gap. Whilst most bridging loans take from 7-21 days to arrange, they can be completed very quickly in urgent situations. For example, if a house sale falls through, a bridging loan can be used to ensure a purchase goes ahead.
Flexibility
Bridging loan lenders tend to be very flexible, allowing you to borrow even if your credit rating is less than perfect. Often bridging loans are used when a mortgage would be unavailable.
No monthly payments
The interest charged on bridging finance is often added to the loan, leaving you with no monthly payments to make. Bridging loans are popular with the investment community as interest can be paid once a property has been sold and a profit has been made.
Unusual property
Bridging loans can be arranged against unusual or even unmortgageable property, allowing you to acquire and improve it before taking out a mortgage. This is often the case with properties purchased at auction, or those in need of major renovations.
No exit penalties
Bridging loans can be paid off at any time and usually have no penalties for doing so. If you are purchasing a property and looking to take a bridging loan whilst selling your own home you are unlikely to know how long this will take. Using a bridging loan gives the certainty of being able to progress with a purchase alongside a longer grace period to sell your home.
Disadvantages of using a bridging loans
Higher interest rates
In the majority of cases, the interest rates charged on bridging loans are higher than those charged on an equivalent mortgage. Bridging loans are short term loans and lenders look to make their profits by charging higher interest. Mortgages are long term products and the interest rates are lower yet profits will mount up over time for lenders.
Higher deposits
The deposit needed when taking out a bridging loan is usually much higher than would be the case when taking out a mortgage. Lenders will look for a substantial deposit of 20% and above when providing finance for a bridging arrangement. The deposit required will depend on your circumstances and in some cases lenders may accept a smaller deposit, although this will likely reflect by way of a higher interest rate.
Lender choice is key
While the bridging loan market is strong and reputable as a whole, there are a few bad actors who charge high fees and can be seen to act unreasonably when things don’t go according to plan. This includes high default interest rates, high default fees or being quick to repossess. It must be stressed that this is a real minority, and is not the norm. Dealing with a reputable broker, such as ABC, can help to avoid these kinds of lenders.
What are the alternatives to a bridging loan when buying a house?
There are alternatives to a bridging loan when buying a house that it is worth considering; for example:
- Mortgages
- Secured loans
- Using savings or approaching family
- Commercial mortgages
- Private investors
- Development finance
How do I apply for a bridging loan?
You can approach lenders individually or use a broker, such as ABC Finance to match you with the right lender for your circumstances. Here we explain the process and how to apply step by step:
1. The enquiry stage
This is where you investigate options. You can approach lenders individually or use a broker, such as ABC Finance to match you with the right lender for your circumstances. Whichever option you choose, you should not be charged for your initial enquiry. ABC will never charge for an enquiry.
With ABC fill in a simple form, and one of our friendly experts will call you back. During the call we will discuss your needs, your budget, inform you about the options available and give you approximate costs.
During the call you will be given a decision in principle (DIP). This confirms how much a lender is likely to give you.
2. Loan acceptance
You select the loan that matches your requirements and the lender is instructed.
3. Valuation
This is where the assets you provide as collateral, usually a property, are valued. This process can often be a desktop valuation; for example, a residential property. If however, your property is of significant value or unique then a survey may be required.
4. Legal process
The legal process is particularly relevant with a bridging loan, as a legal charge is placed upon your property giving the lender an interest in the property during the loan term. You will need to pay for the lender’s solicitor and you may choose to use your own solicitor. Read our ABC guide on using a solicitor for a bridging loan to understand the pros and cons of getting expert advice.
If you are looking to complete quickly then legal work can be instructed at the same time as the valuation.
5. Completion
Funds are transferred directly to you at the final stage of the process.
Property bridging loans by ABC Finance
There is a wide choice of lenders available when you are looking for a bridging loan. Using a specialist loans broker, such as ABC Finance, means that we can negotiate with lenders to find you the best possible deal.
Getting a quote is easy, our advisors will call you back for a confidential, friendly no-obligation discussion. If you wish to proceed they will help you fill in a simple form to begin searching for the right lender for you. Initial approval can move quickly and in straightforward cases funding can be made available within a few weeks.
What documents will I have to provide to get a bridging loan for a house purchase?
Bridging loans are available to individuals, partnerships, Limited Liability Partnerships (LLP), Ltd companies, offshore companies, foreign nationals and pension funds.
To apply for a bridging loan you will need to be 18 or over and a UK resident. You will also need to provide proof of income, bridging loan lenders in England commonly accept:
- Payslips
- Bank statements
- Tax returns
- Property income (demonstrated through bank statements)
You will need to provide detailed information about the property you intend to use as security, or a clear business plan for land or property development.
Financial history is less of a concern to lenders as compared to a mortgage in England as interest is, in most cases, paid at the end of the loan period and secured on a property.
Bridging loans are unlikely to be offered to those over 85 years old, however, there are other options available if you are looking to secure finance against property. Our friendly team can help guide you through the options, request a free callback for a no obligation quote.
There are many different reasons for securing a bridging loan and no one-size fits all, with our range of specialist lenders we can help most people find a loan.
Frequently Asked Questions
Can you get a bridging loan to buy a house if you have bad credit?
Yes, bad credit bridging loans can be used to fund a property purchase in this situation. As bridging loans are secured on property, personal credit history is less of an issue.
A poor credit history won’t usually prevent lending, although depending on your exit strategy, it may result in you paying a slightly higher interest rate.
That said, some lenders won’t increase your rate in this situation. If you would like to know how much you could pay, contact us now and we’ll offer a quote within no more than two hours.
Will I qualify for bridging loans if I’m retired and living on pensions?
Yes, bridging loans are often taken by retired borrowers who are looking to downsize while waiting to sell their old home, especially where speed and cash flow are important.
Will I qualify for bridging if I’m self-employed?
Yes, we can offer a bridging loan to self-employed borrowers. Applications from self-employed consumers are common and loans for this group are offered by most lenders.
Read our bridging loan guides
Below Market Value Bridging Finance
Bridging Loan To Buy Before Selling
The Importance of an Exit Strategy
See our bridging loan case studies
Quick Regulated Bridging Loan Secured for Property Purchase
Urgent Bridge On An Un-Mortgageable Property
