If you’ve got your eye on a new home, but you haven’t sold your existing property yet, a bridging loan could be the solution. This type of loan literally bridges the gap, enabling you to borrow money for a short period of time.

Enabling you to put down a deposit on another home while the sale of your home – or another transaction – goes through, bridging loans also provide an invaluable way to buy a house for cash at auction while your home is sold.

They are also a way to fund a renovation until you can remortgage and release equity to do the work or buy land to build on while you apply for a mortgage.

There are many reasons why you might choose an abridging loan, you just need to be clear on how they work, which is where we can help.

At Smiths Financial, we’ll go through all the options to help you find the right bridging loan for you, with simple, clear advice all the way.


  • You can borrow larger sums of money than normal loans as they are secured against property or other valuable assets
  • Normal loans can take weeks to be approved, bridging loans can be paid out in just days
  • They offer choice and flexibility, fixed or variable, open-ended or closed loan terms


  • A bridging loan is short-term borrowing for a large sum of money to pay back quickly
  • You’ll typically be expected to pay the loan and interest, which could be fixed or variable, off within 12 months. Bear in mind rates can be higher because they are short-term and calculated monthly instead of annually
  • Can be regulated or unregulated – if you or close family are going to live in the property, it will typically be a regulated loan, if you want to buy a commercial property as an investment or for your own business, it will be an unregulated loan

Are there any extra fees?

Bridging loans can incur exit, arrangement (around 2% of the loan), valuation and legal fees, but we can help you understand what they are beforehand and look for loans that won’t charge exit fees if you pay back early.

Can I apply?

  • You must be 18 or over to apply
  • You must have a valuable asset to use as collateral (usually a home)
  • Live in the UK
  • You’ll need to show personal and employment details including salary, your outgoings and outstanding debts


  • You have fallen in love with a house priced £375,000
  • You need a £80,000 deposit – the rest is borrowed through a mortgage
  • You have 10,000 in savings, so need to find £70,000 to secure the property
  • Your existing home is waiting to sell, valued at £300,000
  • A bridging loan of £70,000 enables you to put down the deposit
  • You pay back the loan when your current home is sold

NOTE: Like all secured loans, a bridging loan will be secured on your property, so your home could be at risk if you don’t keep up the repayments.

Looking to make improvements to your property? Instead of remortgaging, you might want to consider a second-charge secured loan.

Need more advice? Please get in touch, we would be happy to help.

Ready to speak to us about bridging loans?

We’ll search through a range of policies from our extensive list of insurers to find what suits you best.