Bridging loans, priced from the whole market, completed at deal speed.

What a bridging loan is, and when professional landlords use one

A bridging loan is short-term property finance, typically 3 to 18 months, secured by a first or second charge and repaid in one lump sum from a defined exit. There is no requirement to service the loan monthly where interest is retained or rolled, and there is no income-multiple affordability test. The lender lends against two things: the security and the exit.

That structure makes bridging the right tool whenever term finance is too slow or the property will not qualify for it yet. On our desk the recurring use cases are:

• Speed. A vendor wants certainty in two weeks, not the eight to twelve a buy-to-let mortgage takes. Bridging closes the gap and a remortgage takes it out later.
• Auction purchases. The contract demands completion in 28 days, sometimes 21. See auction finance.
• Chain breaks. Your onward purchase is ready but your sale has stalled. A bridge against the unsold asset keeps the transaction alive.
• Refurbishment. The property has no kitchen, no bathroom, or needs structural work, so no term lender will touch it. Refurbishment finance funds the purchase and the works.
• Capital raise. Equity in the portfolio needs releasing quickly, for a deposit, a tax bill or a business need, often via a second charge behind a cheap fix you do not want to break.
• Title problems. Short leases, missing planning, defective titles, probate sales. Bridging buys the time to cure the defect, then term finance refinances the cured asset.

Where the project involves ground-up construction or major multi-unit conversion, bridging stops being the right product and development finance takes over. We run that judgement call on every refurbishment enquiry.

How bridging loan pricing works

Four numbers decide what a bridge actually costs, and lenders quote them in ways that are not directly comparable. The monthly rate is the headline: as of June 2026, residential first charge bridging runs 0.75% to 1.10% per month, second charge 0.95% to 1.35%, commercial 0.85% to 1.25%. The arrangement fee is typically 2% of the gross loan, added to the facility. Then comes the interest treatment, which changes the cash flow entirely:

• Retained interest. The lender deducts the full term’s interest from the advance on day one. Nothing to pay monthly, but your net day-one cash is materially lower.
• Rolled interest. Interest compounds onto the balance and is repaid at exit. Higher exit figure, better day-one cash than retained.
• Serviced interest. You pay monthly, like a mortgage. Maximises day-one cash but requires evidenced affordability, which partially defeats the point of bridging for most landlords.

The fourth number is the exit fee, and our position is blunt: we avoid lenders that charge them. An exit fee of 1% to 2%, sometimes calculated on the gross loan or even the property value, is a penalty for doing exactly what the loan was designed for. With a whole-of-market view there is almost always an equivalent facility without one, and the few exceptions get flagged to you in writing before terms are signed.

Gross versus net: the worked example that trips everyone

Lenders quote the gross loan. You spend the net. Confusing the two is the single most common error we see in bridging enquiries, so here is the deduction maths on a typical case: a £400,000 property, 75% LTV, 12-month term, 0.85% per month, interest retained.

The advertised 75% LTV delivers roughly 65% of the property value in usable cash. If your deal needs £290,000 on completion day, a "75% bridge" does not get you there. We model gross-to-net on every set of terms before you see them, and our bridging loan calculator runs the same maths on your own numbers.

The exit is the underwriting

A bridging lender is not lending against your income. It is lending against the probability of being repaid in 12 months, which means the exit strategy is the case. Sale exits are tested against realistic marketing periods and local comparables, not your asking price. Refinance exits are tested against the term mortgage you claim will repay the bridge: if the buy-to-let exit will not pass interest cover at today’s stressed rates, the bridge should not be written, and a good underwriter will not write it.

We pressure-test the exit before placing the case, because a bridge without a credible exit is just an expensive countdown. The full framework, including dual exits and what happens when an exit slips, is in our bridging loan exit strategies guide. For the buy-refurbish-refinance model specifically, where the exit is a remortgage at the post-works value, start with the buy, refurbish, refinance guide.

Enquiry to drawdown: the realistic timeline

Most bridging completes in 7 to 21 days. Here is how a well-run case actually sequences:

Compressing that to 5 to 7 days is possible when the case justifies it: desktop valuation, title insurance instead of full searches, dual legal representation, and a lender whose credit committee sits daily. Every shortcut carries a cost or a condition, and we will tell you which ones your case can safely take.

Bridging loan interest rates by scenario, as of June 2026

Arrangement fees run at typically 2% across the board. Rates indicative as of June 2026, confirmed in writing on a per-case basis; the spread within each band is driven by LTV, asset quality, location, exit strength and borrower track record.

Regulated versus unregulated bridging

One line matters here. If the bridge is secured on a property you or an immediate family member live in or will live in, it is a regulated mortgage contract, and we do not arrange it: Lenzie Consulting Ltd is not authorised or regulated by the FCA, and regulated cases are referred to an FCA-authorised firm. Bridging secured on investment property, which is nearly every landlord case, is unregulated lending and sits squarely on our desk.