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A bridging loan is what is used to help buyers that are stuck between selling their home and purchasing their new one. The bridging loan works to ‘bridge the gap’ through out the process.


There are two types of bridging loans. A closed bridging loan has a fixed repayment date, this will usually be used when you are waiting for a sale to complete.

An open bridging loan is when there is no fixed repayment date set, however you will be expected to repay the loan within the space of a year. As this is a short term finance, the loan will need to be re-payed within 1-12 months.

It is important to know that you are able to pay this loan back within a short space of time whether the house goes through or not. You will need a clear payment plan to prove this.


When you may need a Bridging Loan:


  • Development projects
  • Creditor settlements
  • Purchase of property
  • Renovation of property
  • Land acquisitions 
  • Divorce settlements
  • Inheritance tax
  • Save repossessions
  • Paying off bankruptcy
  • IVA’s
  • Paying off HMRC


Like everything, there are pros and cons when it comes to the loan. Some of the pros include the options to pay interest later, quick arrangement and the flexibility of it. The cons consist of the legal and broker fees and the high interest rates.

If you’re unable to sell your property but you want to move, why not consider Let to Buy.



If you would like more information on this subject, contact us today and an advisor will happily explain everything to you.