TL;DR
- A bridging loan broker searches the specialist lending market for short-term secured finance.
- Bridging loans in the UK typically charge 0.5% to 1.5% interest per month in June 2026.
- Most bridging loans run for 1 to 24 months with no monthly repayments required.
- Brokers typically charge 1% to 2% of the loan amount as a fee, or work on lender commission.
- Bridging loans are secured against property and can complete in 3 to 14 days for straightforward cases.
- Always use an FCA-regulated broker and ensure the exit strategy is clear before applying.
Key Facts
What Is a Bridging Loan Broker?
A bridging loan broker is a specialist finance intermediary who sources short-term secured loans from a panel of bridging lenders on behalf of a borrower. Unlike high street mortgage brokers who predominantly work with mainstream lenders, bridging loan brokers operate in the specialist and alternative finance market, which includes a large number of private lenders, challenger banks, and specialist finance houses that do not deal directly with the public.
Bridging loans are short-term loans secured against property, typically used to bridge a gap between two financial events: for example, purchasing a new property before the sale of an existing one completes, buying a property at auction where completion must happen within 28 days, or funding a property refurbishment before refinancing to a standard buy-to-let mortgage. The specialist nature of this lending market, and the speed at which decisions need to be made, means that experienced brokers with direct lender relationships add significant value over trying to source bridging finance independently.
What Does a Bridging Loan Broker Do?
A bridging loan broker assesses the borrower circumstances and requirements, identifies suitable lenders from their panel, presents the case to selected lenders, negotiates the terms, and manages the application through to drawdown. The process involves packaging the borrower information in a format that the target lenders require, which varies significantly between specialist lenders.
A good bridging broker will assess not just the rate and fees but the lender track record for speed of completion, their flexibility on edge cases, and the security of drawdown once a decision in principle is issued. In bridging finance, the headline rate is rarely the most important factor. The lender willingness to complete quickly and reliably is often worth more than a 0.1% per month rate difference.
Current Bridging Loan Rates: June 2026
Bridging loan interest in the UK is quoted monthly rather than annually. In June 2026, standard bridging rates from mainstream bridging lenders range from approximately 0.5% to 0.75% per month for well-secured cases at low LTV, rising to 1.0% to 1.5% per month for higher-risk transactions, unusual security, or high LTV. Development finance and mezzanine products sit at the higher end of this range.
On an annualised basis, 0.75% per month is equivalent to approximately 9% AER. 1.25% per month is approximately 16% AER. Bridging finance is significantly more expensive than standard mortgage finance and should only be used where the cost is justified by the specific circumstances, such as the ability to secure a below-market-value property, the profit from a refurbishment project, or the avoidance of a collapsed chain.
The total cost of a bridging loan includes the monthly interest, the arrangement fee (typically 1% to 2% of the loan), the exit fee (some but not all lenders charge this, typically 1% of the loan), legal fees for the lender solicitor, and the broker fee. On a 500,000 pound loan at 0.75% per month for 6 months, the interest alone is 22,500 pounds. Add a 1.5% arrangement fee of 7,500 pounds and legal costs of 3,000 to 5,000 pounds and the total cost of the facility is approximately 33,000 to 35,000 pounds before the broker fee.
Open vs Closed Bridging Loans
A closed bridging loan has a defined exit date, typically because contracts on the sale of the security property or a refinancing have already been exchanged. Closed bridges are lower risk for lenders because the repayment route is confirmed. They typically attract lower rates than open bridges.
An open bridging loan has no confirmed exit date. The borrower expects to repay within the loan term but has not yet exchanged contracts on a sale or confirmed a refinancing. Open bridges are more expensive and carry a higher risk for the borrower: if the exit does not materialise within the loan term, the borrower faces extension fees, additional interest, and potentially enforcement action by the lender.
When Does a Bridging Loan Make Sense?
Bridging finance is appropriate in a limited set of circumstances where the cost is justified. Auction purchase where completion is required within 28 days is one of the most common uses: standard mortgage finance cannot complete in this timeframe. Chain break, where a seller has found their next purchase but their buyer has fallen through, is another common use. Property refurbishment where the property is uninhabitable and does not qualify for a standard buy-to-let mortgage until works are completed is a third.
Bridging is not appropriate as a substitute for standard mortgage finance that has taken longer to arrange than expected, as short-term stopgap lending to cover temporary cash flow problems, or where there is no clear exit strategy. The most common cause of bridging loan problems is a borrower taking out a bridge without a concrete, realistic exit route.
How to Choose a Bridging Loan Broker
Regulated vs Unregulated Bridging Loans
Bridging loans secured against a borrower main residence are regulated by the FCA under the Mortgage Credit Directive. A regulated bridge must be arranged through an FCA-authorised firm. The borrower has access to the Financial Ombudsman Service and FSCS protections. Bridging loans secured against investment property, commercial property, or limited company-owned property are unregulated. FCA authorisation is not required for unregulated transactions, though reputable market participants typically hold FCA authorisation regardless. The lack of regulation on unregulated bridges makes the quality and reputation of the broker and lender more important.
The Role of the Valuer in Bridging Finance
All bridging lenders require an independent RICS valuation of the security property before completing a loan. Most mainstream bridging lenders maintain a panel of RICS-qualified valuers who can turn around a report in 3 to 5 days for standard residential properties. For development sites and commercial property, specialist valuers are required and the process takes longer. Many lenders lend against the lower of the purchase price and the valuation, which affects auction purchasers who may be buying at a discount to market value.
Bridging Loan Default and Enforcement
A bridging loan that cannot be repaid at the end of the term puts the borrower at risk of enforcement. The lender has a first charge over the security property and can appoint a receiver or commence possession proceedings if the loan is in default. Unlike a residential mortgage, unregulated bridging lenders are not subject to the FCA mortgage arrears handling rules and can move to enforcement more quickly. Before taking any bridge, the borrower and their adviser should stress-test the exit strategy: what happens if the sale takes longer than expected or falls through? Extensions come at additional cost and are not guaranteed.
Check FCA registration for regulated bridging loans (those secured against a main residence). For unregulated bridging (commercial or investment property), FCA regulation is not mandatory but membership of the National Association of Commercial Finance Brokers (NACFB) indicates a professional standard. Ask how many lenders are on the broker panel and whether they have direct relationships with those lenders or work through packagers. Ask for a full illustration of costs including all fees before proceeding. Check the broker experience with transactions similar to yours in terms of loan size, security type, and timescale.
Be wary of brokers who quote rates without first understanding the security and the exit strategy. A reputable broker will ask detailed questions about the property, the purpose of the loan, and the exit route before quoting. Headline rates from brokers who do not ask these questions are often not deliverable in practice.
Frequently Asked Questions
How quickly can a bridging loan complete?
For straightforward cases with clean title, a cooperative borrower, and a motivated lender, a bridging loan can complete in 3 to 7 days. More complex cases typically take 10 to 14 days. Cases involving non-standard security, title defects, or complex ownership structures take longer.
What is the maximum LTV on a bridging loan?
Most mainstream bridging lenders lend up to 70% to 75% LTV on standard residential security. Some specialist lenders will consider up to 80% in certain circumstances. Commercial property and development sites are typically subject to lower maximum LTV limits.
Do I need to make monthly payments on a bridging loan?
On most standard bridging products, interest is either retained (deducted from the loan advance upfront) or rolled up and added to the loan balance. There are no monthly payment obligations. Some lenders offer serviced interest products where monthly payments reduce the total interest cost, which can be worthwhile on longer bridges.
Are bridging loans regulated?
Bridging loans secured against a borrower main residence are regulated by the FCA under the Mortgage Credit Directive. Bridging loans secured against investment property, commercial property, or land are unregulated. Use an FCA-authorised broker for regulated bridging and check NACFB membership for unregulated transactions.
What is the exit strategy and why does it matter?
The exit strategy is how the bridging loan will be repaid at the end of the term. Common exits are the sale of the security property, refinancing to a term mortgage or buy-to-let mortgage, or the receipt of funds from another source. A clear and realistic exit strategy is essential before taking out a bridging loan. Lenders will assess the exit as part of their underwriting. A borrower with no credible exit faces enforcement risk at the end of the term.
