Bridging loans are a short term funding option typically used by property buyers to ‘bridge’ the gap  when buying a new property and waiting for a traditional mortgage to be approved or  capital to be released from the sale of their current home.

Bridging Loans are most commonly used to help fund a new house purchase while you’re waiting for your existing property to sell.  But bridging loans can also be used for a variety reasons such as major structural home improvements and renovation projects. Bridging loans are also often used to help those looking to buy at auction where you have a short timeframe to exchange contracts.


There are two types of bridging loan, closed and open. With a closed loan you are given a set repayment date – this type of bridging loan is traditionally used when contracts have been exchanged but you are waiting for the sale of your property to complete. With an open loan there’s no fixed repayment date but most lenders will expect the balance to be repaid in full within one year.

As with any loan, the lender will need evidence of a clear repayment strategy. This could be using equity from the sale of a property or evidence that you have a mortgage offer in place. You’ll also need to provide information regarding the new property you are purchasing and the price you are planning to pay for it  – as well as proof of what you are doing to sell your current property (if relevant). As they are a stop-gap measure, bridging loans can be significantly more expensive than a ‘traditional’ loan or mortgage.


Bridging loans can be beneficial in a number of circumstances but are generally speaking, aimed at experienced landlords and property developers, including those purchasing at auction. They can also be used for wealthy or asset-rich borrowers looking to release short term capital quickly without the necessity for traditional mortgage underwriting.

When taking out a bridging loan you could face much higher interest rates than with a traditional mortgage and, as the loans are short-term, rates are sometimes expressed as the rate per month.


Varsity Finance are highly-experienced bridging loan brokers. When you come to us for mortgage advice, you can take advantage of the following benefits:

Our team of Bridging Loan Specialists will work with you to provide a simple and fast short-term funding solution. We’ll aim to give you a decision in principle within 24 hours and in some cases, funds can be available within 5 to 7 business days.

To find out how we can help with your bridging loan, call us on 01223 627999

Varsity Finance – NACFB Brokers

Commercial Finance is not regulated by the Financial Conduct Authority