UK Bridge Loan (UK Bridging Loan)

A UK bridge loan (or UK bridging loan) is a short term loan designed to cover the costs of temporary property ownership. For example you may need to temporarily own two properties (the one you're buying and the one you're selling) in order to help a property chain move. You could take out a bridging loan on the property you are buying, while still waiting to sell your current property, if the property you want to buy may be sold to someone else if you wait too long. A bridging loan can allow your purchase to go ahead, before your sale has taken place, and will keep the whole chain of property deals moving forward.

Another example of where a UK bridge loan may be useful is where a property developer expects to buy a plot of land, gain planning permission, then remortgage at a higher value within in a short timescale. This would allow a property developer to raise build development funding at the time they need it.

Benefits of a UK Bridge Loan

A bridging loan can help to keep a property deal moving, to ensure you get the property you want, or allow other short term funding to take place, such as funding a property auction purchase, with the expectation of remortgaging the property once the purchase is complete.

Risks of a UK Bridging Loan

Interest rates are usually higher, due to a bridging loan being short term in nature.

For a period of time you may be paying for two loans so this may put stress on your monthly budget. If your sale becomes delayed, or falls through, this dual payment may last many months.

For further advice and to talk to a mortgage adviser about arranging a UK Bridge Loan just click on the enquiry button below, fill in brief details, and an adviser will call you within the next 24 hours.