Bridging finance is a short-term loan — usually 1–24 months — secured against property and repaid from a defined "exit" such as a sale or remortgage. As of July 2026, UK bridging loans typically cost 0.55%–1.1% per month in interest, with the market average at 0.82% in Q1 2026 (Bridging Trends), plus fees of roughly 2–5% of the loan.
This guide explains how bridging works, exactly what it costs, how the interest can be structured, and when it is — and is not — the right tool. All figures are representative market ranges as at 8 July 2026, with the source and date given for every number.
What is bridging finance?
A bridging loan is a short-term loan — typically lasting 1–24 months — secured against property. It's designed to "bridge" a gap between a financial need and a longer-term solution. The name comes from its original use: bridging the gap between buying a new property and selling an existing one.
Unlike a conventional mortgage, bridging finance is fast (funds often within days), flexible, and assessed primarily on the exit route and property value rather than income. The average bridging loan term across the market was 12 months in Q1 2026, according to Bridging Trends, the quarterly industry dataset compiled by lender MT Finance.
When is bridging finance useful?
- Chain break: You want to buy before your existing home has sold
- Auction purchase: Auction purchases must complete within 28 days — too fast for a conventional mortgage. Bridging finance can complete in days.
- Uninhabitable property: Many mortgage lenders won't lend on properties without a working kitchen or bathroom. Bridging finance allows you to buy, renovate, and then refinance onto a standard mortgage.
- Development finance: Funding property conversions, extensions, or new builds before a development loan or sale.
- Business cash flow: Using property as security to release short-term funds for a business need
- Inheritance: Releasing funds from an inherited property while the estate is being settled
How much does bridging finance cost in July 2026?
Two things drive the cost of a bridging loan: the monthly interest rate and the fees. As of July 2026, typical monthly rates look like this:
| Scenario | Typical monthly rate (July 2026) | Approx. annualised |
|---|---|---|
| Prime residential, below 60% LTV, strong exit | from ~0.55% | ~6.6% |
| Mainstream residential & buy-to-let bridging | 0.65%–0.95% | ~7.8%–11.4% |
| Market average, all completed loans (Q1 2026) | 0.82% | ~9.8% |
| Higher LTV, adverse credit or complex security | 1.0%–1.5% | ~12%–18% |
Sources: Bridging Trends Q1 2026 (compiled by MT Finance, published May 2026) for the 0.82% market average; broker-quoted ranges as at July 2026. Representative figures only — your rate depends on LTV, property type, credit profile and exit.
At the Q1 2026 average of 0.82% per month, a £200,000 bridging loan costs about £1,640 a month in interest before fees. For a complete line-by-line worked example — a £200,000 bridge over nine months with every fee itemised — see our companion guide: what does a bridging loan cost in 2026? And for how LTV, property type and exit move the rate you're offered, see our bridging loan interest rates guide.
Costs also vary with local property values and lender appetite, so it often pays to start from a local page. We cover bridging hotspots across the UK: compare bridging loans in Stafford, bridging loans in Windsor, bridging loans in Camberley, bridging loans in Ipswich or bridging loans in Edinburgh; weigh up short term bridging loans in Doncaster or Ashfield bridging loans; or see what a bridging loan in Nottingham typically costs to arrange.
What fees do you pay on a bridging loan?
Fees typically add the equivalent of another 2–5% of the loan on top of interest. Here is the full list you should expect on a quote:
| Fee | Typical amount (July 2026) | When it's paid |
|---|---|---|
| Arrangement (facility) fee | 1–2% of the gross loan — ~2% is most common | Usually added to the loan at drawdown |
| Valuation fee | ~£300–£2,000+ on residential, scaling with property value; more for commercial or development sites | Upfront, usually non-refundable |
| Lender's legal fees | ~£750–£1,500+ (you pay the lender's solicitor as well as your own) | At completion |
| Your own solicitor | ~£750–£1,500 | At completion |
| Broker fee | £0–1% — many brokers are paid commission by the lender instead | On offer or completion |
| Exit fee | Often none; some lenders charge ~1% or one month's interest | On redemption |
| Telegraphic transfer (CHAPS) fee | ~£25–£50 | At drawdown |
| Redemption administration fee | ~£100–£300 (removes the lender's charge) | On redemption |
Typical market ranges as at July 2026, compiled from published lender and broker fee scales. Always check the full fee schedule on your illustration before committing.
Gross vs net loan: the "gross" loan is the total facility including any retained interest and fees added to the loan; the "net" loan is the cash you actually receive on day one. Always compare quotes on the net advance — two "£200,000" loans can put very different amounts in your hands.
⚠️ The costs add up quickly. A £200,000 bridging loan at the Q1 2026 average of 0.82% per month accrues around £1,640/month in interest alone, plus fees. Only use bridging finance when the alternative is worse — and always have a clear, realistic exit strategy.
How is interest charged on a bridging loan?
Unlike a mortgage, you usually choose how the interest is paid:
- Serviced (monthly): you pay the interest each month, like an interest-only mortgage. Cheapest overall, but the lender must be satisfied you can afford the payments.
- Retained: the lender deducts the expected interest for the whole term from the advance at the start. No monthly payments, but your day-one cash is lower.
- Rolled up: interest compounds monthly and is repaid in one go at the exit. No monthly payments; the most expensive option overall.
Our bridging loan costs guide compares all three structures on the same £200,000 loan, with pound-for-pound totals.
Open vs closed bridging loans
Closed bridging loans have a fixed repayment date — typically because you have contracts exchanged on a property sale. Lower risk for the lender, so rates are slightly better.
Open bridging loans have no fixed repayment date. You must repay within the loan term (usually 12–24 months) but there's no set date. More flexible, but slightly higher rates.
Is bridging finance regulated by the FCA?
It depends what the loan is secured on:
- Regulated bridging: if the loan is secured on a property that you or an immediate family member live in — or intend to live in — it is a regulated mortgage contract, and the lender and any adviser must follow FCA rules. Most residential, owner-occupier bridging (chain breaks, downsizing, buying before selling your home) falls in this category.
- Unregulated bridging: loans for buy-to-let, commercial property, land and most investment or business purposes sit outside FCA mortgage regulation. This is the larger part of the market — 59% of bridging transactions were unregulated in Q1 2026, per Bridging Trends.
Unregulated does not mean unsafe, but it does mean fewer formal protections — which makes using a reputable, FCA-authorised broker and an independent solicitor even more important. You can check any firm on the FCA register, and MoneyHelper (the government-backed guidance service) has a plain-English overview of the risks.
What is an exit strategy?
Every bridging loan requires a clear exit strategy — the defined means by which you'll repay the loan. Lenders will scrutinise this carefully. Common exit strategies include:
- Sale of the bridged property
- Sale of another property
- Refinancing onto a conventional mortgage or development loan
- Repayment from business income or investment
The exit also determines your realistic term. Build in headroom: if your sale or remortgage slips past the loan term, default interest rates are punitive. Bridging Trends data shows the average loan is written for 12 months even though many repay earlier — that buffer is deliberate.
How quickly can I get bridging finance?
Fast is the point. In straightforward, well-prepared cases, bridging finance can complete in 5–10 working days. Complex cases (unusual property, multiple security) may take 3–4 weeks. Across the whole market — including slow-moving cases — the average completion time was 53 days in Q1 2026 (Bridging Trends), which is exactly why having your valuation access, solicitor and paperwork lined up from day one matters.
Do I need a specialist bridging broker?
In practice, yes. Much of the market is unregulated, lenders' criteria and fee structures vary enormously, and many bridging lenders only accept applications through intermediaries. A whole-of-market bridging loan broker will source the most competitive rate, structure the loan correctly (serviced vs retained vs rolled up, gross vs net), and stress-test your exit before you commit.
Nesto is an introducer, not an adviser: we match you with an FCA-authorised bridging specialist for free, with no obligation. Tell us what you need and we'll connect you with the right broker, usually the same day.
Bridging finance FAQs
How much does a £200,000 bridging loan cost per month?
At the Q1 2026 market average rate of 0.82% per month (Bridging Trends, MT Finance), interest on a £200,000 bridging loan is about £1,640 a month. Across the typical July 2026 range of 0.55%–1.1% per month, that is roughly £1,100–£2,200 a month before fees.
What is the maximum LTV on a bridging loan?
Most UK bridging lenders lend up to 70–75% loan-to-value on residential property, with a smaller number going higher where additional security over another property is available. Lower LTVs attract the best pricing — rates from around 0.55% per month are generally reserved for loans below 60% LTV (typical market terms, July 2026).
Can I get a bridging loan with bad credit?
Often, yes. Bridging lenders focus on the property security and the credibility of your exit rather than your credit score, especially where the exit is a sale. Expect pricing towards the top of the range — typically 1%–1.5% per month as of mid-2026 — and a lower maximum LTV. For a deeper look at which lenders accept CCJs, defaults and low credit scores, read our answer to can I get a bridging loan with bad credit.
Are bridging loans regulated by the FCA?
Bridging loans secured on a property you or an immediate family member live in (or will live in) are regulated mortgage contracts overseen by the FCA. Most buy-to-let, commercial and investment bridging is unregulated: 59% of bridging transactions were unregulated in Q1 2026 (Bridging Trends).
Do you make monthly payments on a bridging loan?
Not necessarily. Interest can be serviced monthly, retained (deducted from the advance at the start) or rolled up and paid when the loan redeems. Rolled-up and retained structures mean no monthly payments — useful when cash flow is tight — but the total interest bill is higher.
Is bridging finance more expensive than a mortgage?
Yes. Typical bridging rates of 0.55%–1.1% per month equate to roughly 6.6%–13.2% a year before fees — well above standard mortgage rates. Bridging is priced for speed and short terms; it is designed to be repaid within months, not held for years.