Closed Bridging Loans
A closed bridging loan is a short-term, secured property loan with a fixed repayment date and a predetermined exit strategy — typically used when a property sale is already exchanged but not yet completed, or when a mortgage refinance is confirmed and in progress. Because the lender knows exactly how and when the loan will be repaid, closed bridging loans offer lower rates than open bridging, can complete in as little as 1–2 weeks, and usually run up to 12 months. Interest is typically rolled up and paid at the end, with no early repayment charges after any applicable minimum term.
What is a closed bridging loan?
A closed bridging loan is a short-term, secured property loan with a fixed repayment date and a predetermined exit strategy, typically used when a property sale is already exchanged but not yet completed. Offering lower rates than open bridging due to reduced lender risk, these loans usually last up to 12 months, providing fast capital for chain breaks, auction purchases and development exits. Interest is typically rolled up and paid at redemption, and most closed bridging loans do not carry early repayment charges after any applicable minimum term. They can be regulated by the FCA where the borrower intends to live in the security property.
Closed Bridging Loan Calculator
Estimate loan size, interest and costs for a closed bridging loan. Figures are indicative — final terms depend on the property, exit strategy and lender criteria.
Use the open market value or agreed purchase price the lender will underwrite against.
Closed bridging loans typically go up to 75% net LTV. Lower leverage usually means better pricing.
Closed bridging terms are matched to the confirmed exit date — commonly 1–12 months.
Closed bridging loans price from 0.55% pm. Rate depends on LTV, security and exit certainty.
Most closed bridging loans use retained or rolled interest to avoid monthly payment obligations.
Indicative only — varies by lender and case.
Often 0% on closed bridging loans. Confirm at DIP stage.
Indicative only — varies by complexity and solicitor.
Indicative only — varies by lender.
Indicative breakdown
Figures are indicative and do not constitute a binding offer. All terms subject to underwriting, valuation and legal due diligence.
What is a closed bridging loan?
A closed bridging loan is a short-term secured property loan where the borrower has a fixed, confirmed repayment date agreed at the outset — typically because contracts have been exchanged on a sale, or a mortgage Decision in Principle is in place. The certainty of repayment makes these loans lower risk for lenders, which is typically reflected in more competitive pricing than open bridging loans.
Fixed repayment date
The term of a closed bridging loan is set to match the confirmed exit event — not an estimated timeline. Lenders want to see documentary evidence of that date before proceeding.
Lower rates than open bridging
Because the exit is evidenced and the risk of non-repayment is reduced, closed bridging loans typically price more competitively than open bridging loans across the market.
Straightforward underwriting
A confirmed exit removes one of the biggest variables in bridging underwriting. Cases move faster when the exit is clearly evidenced from the outset.
Closed bridging vs open bridging — the key distinction
The difference between closed and open bridging is entirely about the exit strategy. On a closed bridging loan, you know the repayment date — typically because you have exchanged contracts, have a confirmed mortgage offer, or have another evidenced liquidity event. On an open bridging loan, the exit is intended but not yet confirmed with a fixed date. Open bridging is more flexible but typically priced higher to reflect that additional risk.
Key aspects of closed bridging loans
These are the defining characteristics that set closed bridging loans apart — and the factors Google, lenders and borrowers focus on most.
Defined exit strategy
The lender knows exactly how and when the loan will be repaid — typically via a confirmed sale (contracts exchanged) or a confirmed mortgage refinance (DIP or formal offer in place). This defined exit is what makes the loan "closed" and is the single most important factor in the underwriting process.
Lower risk — lower cost
Because the repayment date is set and evidenced, closed bridging loans typically come with more competitive rates than open bridging loans on the same asset. The reduced risk to the lender is passed on as a lower monthly rate — making closed bridging the cheaper option where an exit can be confirmed.
Fast funding — 1 to 2 weeks
Closed bridging loans are used to bridge a payment gap quickly — such as when a chain breaks, or when an auction purchase requires funds within 28 days. With exit evidence already in place, underwriting is faster. Most clean cases complete within 1–2 weeks; straightforward cases can complete in as little as 3 working days.
Secured against property — usually first charge
Closed bridging loans are secured against property or land, most commonly on a first-charge basis. Second-charge structures are available on the right case. The lender holds a legal charge over the security property for the duration of the loan.
FCA regulation where applicable
Closed bridging loans can be regulated by the Financial Conduct Authority where the borrower — or a close family member — intends to live in the security property. Regulated loans carry FCA-compliant advisory requirements and are typically capped at 12 months. Investment and company borrowing is usually unregulated.
Related: regulated bridging loans.
Interest rolled up — no early repayment charges
Interest on closed bridging loans is typically rolled up and paid at redemption alongside the capital — there are no monthly payments to manage during the loan term. Most closed bridging loans do not carry early repayment charges after any applicable minimum term, so borrowers who exit early only pay for the days they actually held the loan.
Closed vs open bridging loans
Understanding the difference helps you choose the right product and present your case to a lender in the way most likely to achieve the best rate and fastest approval.
Side-by-side comparison
| Feature | Closed bridging loan | Open bridging loan |
|---|---|---|
| Repayment date | Fixed and evidenced at outset | No fixed date — usually within 12–18 months |
| Exit strategy | Confirmed — contracts exchanged, DIP in place, or equivalent | Intended but not yet confirmed with a date |
| Lender risk | Lower — repayment certainty is higher | Higher — exit is less defined |
| Rates | Typically lower | Typically higher |
| Flexibility | Less flexible — exit date is fixed | More flexible — exit can be confirmed later |
| Best for | Post-exchange purchases, confirmed refinances, known liquidity events | Cases where the exit timeline is not yet confirmed |
| Common scenarios | Chain breaks (post-exchange), auction purchases with clear plan, pre-agreed mortgage refinance | Properties being marketed for sale without a buyer yet confirmed |
If your exit is not yet confirmed with a fixed date, an open bridging loan or a no valuation bridging loan may be more appropriate depending on the scenario.
Common uses for closed bridging loans
Closed bridging loans are used wherever the borrower has a confirmed repayment event in place and needs short-term capital to bridge the gap before that event completes.
Chain break — post exchange
Contracts have been exchanged on your existing property sale. You need to complete on a new purchase before your sale completes. A closed bridge covers the gap with a fixed term matched to your completion date.
Purchase before mortgage completes
You have a confirmed mortgage offer or Decision in Principle in place but need to complete the purchase faster than the mortgage timeline allows. The closed bridge is repaid when the mortgage draws down.
Auction purchase with confirmed refinance
You buy at auction with a 28-day completion deadline and a confirmed refinance exit — either a mortgage DIP or confirmed buy-to-let product. The closed bridge funds the purchase; the refinance repays it.
Related: auction finance UK.
Development exit with confirmed sale
A development has completed and units are under offer or sold subject to contract. A closed bridge provides liquidity while the sales complete, repaid on completion of each sale.
Related: development exit bridging loans.
Equity release against a property under offer
Your property is under offer and contracts are being prepared. A closed bridge releases equity ahead of completion, repaid when the sale funds arrive.
Refinance of expiring facility
An existing bridging loan or short-term facility is coming to its end date and a confirmed replacement product is in place. A closed bridge covers the gap without penalty charges.
Related: refinance bridging loans.
Exit strategy requirements for closed bridging loans
The exit strategy is the defining feature of a closed bridging loan. Lenders need to see clear, documentary evidence of the confirmed exit before proceeding — not a plan, but a confirmed event with a known date.
What counts as a confirmed exit
- Exchange of contracts on a sale — the strongest closed exit evidence; contracts signed, completion date agreed
- Mortgage Decision in Principle or formal offer — lender confirmation that the refinance will proceed
- Confirmed buy-to-let mortgage offer — for investment property refinance exits
- Development sales under contract — units exchanged, completion scheduled
- Confirmed liquidity event with a fixed date — inheritance probate confirmed, pension drawdown scheduled, business sale with signed heads of terms
Exit evidence lenders want to see
- Signed exchange of contracts (for sale exits)
- Mortgage DIP or formal offer letter (for refinance exits)
- Solicitor confirmation of completion date
- Estate agent correspondence confirming sale status
- For liquidity events: written confirmation of date and amount
The stronger and more clearly evidenced the exit, the faster underwriting moves and the better the rate. We help you package exit evidence correctly at the outset.
What if my exit is not yet confirmed with a fixed date?
If you have a clear exit plan but the date is not yet fixed — for example your property is listed but you don't have a buyer yet — an open bridging loan is likely the more appropriate product. We confirm the right product for your scenario at the feasibility stage, not after you've applied.
Typical terms for closed bridging loans
Terms on closed bridging loans are set to match the confirmed exit date. These ranges reflect what is commonly available across the market.
Common ranges (guide only)
| Feature | Typical range | Notes |
|---|---|---|
| Loan size | £26,000–£10,000,000 | Higher by scenario and lender appetite |
| Net LTV | Up to 75% | Case dependent; lower LTV typically achieves better pricing |
| Rates | From 0.55% pm | Lower than comparable open bridging; exact rate depends on LTV, security and exit |
| Term | 1–12 months | Set to match the confirmed exit date; can be extended in certain circumstances |
| Decision speed | Same day indicative | Full approval typically within 2–5 working days |
| Completion | From 3 working days | Depends on legal complexity, title and valuation route |
| Charge type | First or second charge | First charge most common; second charge available on the right case |
| Borrower type | Individual, SPV, limited company | Both regulated and unregulated structures available |
Regulated vs unregulated closed bridging loans
Whether a closed bridging loan is regulated or unregulated depends on how the property is being used — not the borrower's preference. Understanding this distinction matters because it determines lender pool, advisory requirements and maximum term.
Regulated closed bridging loans
If you or a close family member will live in the security property, the loan is regulated under the Financial Services and Markets Act and overseen by the FCA. Regulated closed bridging loans are commonly used for residential chain breaks — where contracts have been exchanged on your existing home and you are completing on a new one before the sale funds arrive.
- Maximum term typically 12 months
- FCA-compliant advisory process required
- Exit must be confirmed and evidenced
- Suitable for owner-occupier chain breaks
Related: regulated bridging loans.
Unregulated closed bridging loans
If the security property is an investment property, buy-to-let, commercial asset or land — or if the borrower is a limited company or SPV — the loan is unregulated. Unregulated closed bridging loans are commonly used by property investors and developers with confirmed sale or refinance exits.
- Terms can exceed 12 months in some cases
- Wider lender pool and more flexible criteria
- SPV and company borrowers accepted
- Suitable for investment and development exits
Related: unregulated bridging loans.
Closed bridging loan rates and costs
Closed bridging loans are typically cheaper than open bridging loans because the lender has greater certainty over the repayment date. Rates are still determined by LTV, the quality of the security, the borrower profile and the exit evidence.
Interest rates
Rates on closed bridging loans start from 0.55% per month. Most cases price between 0.65% and 1.10% pm depending on leverage and risk. The most competitive rates are available on low-LTV cases with strong, clearly evidenced exits on standard residential or commercial property.
Arrangement fees
Typically 1–2% of the gross loan amount. Some lenders absorb the arrangement fee into the rate on smaller loans. Larger or more complex cases may negotiate lower percentage fees. Always factor arrangement fees into total cost comparisons.
Other costs to factor in
Legal fees (both your solicitor and the lender's), a valuation fee where required, and an administration or draw-down fee. Exit fees are less common on closed bridging loans than on some other short-term products but should always be confirmed at DIP stage.
No early repayment charges — you only pay for the days you use
Most closed bridging loans do not carry early repayment charges after any applicable minimum term. This means if your sale or refinance completes ahead of the agreed loan term, you repay the loan and interest stops accruing from that date — you do not pay for the remaining months. Interest is typically calculated daily and rolled up to be paid at redemption alongside the capital. This makes closed bridging loans efficient for borrowers with confirmed exits, as total interest cost is directly tied to how long the loan is actually held.
Why closed bridging loans price lower than open bridging
Lenders price bridging loans based on the certainty of repayment. On a closed bridging loan, the exit is confirmed and evidenced — contracts are exchanged, the mortgage offer is in place, or the completion date is known. This reduces the default risk significantly compared with an open bridging loan where the exit is intended but not guaranteed with a fixed date. The lower risk is typically passed on to the borrower as a more competitive rate.
Closed bridging loans with bad credit
Because closed bridging loans are asset-led — secured against property with a confirmed exit — lenders focus primarily on the security quality and the certainty of repayment rather than credit score alone. Adverse credit can be considered on the right case.
Adverse credit types that can be considered
- Missed payments or defaults (historic or recent)
- CCJs (County Court Judgements)
- IVAs and previous bankruptcy (subject to discharge)
- Low credit score without specific adverse events
- Complex or non-standard income profiles
What lenders focus on instead
- Exit certainty — a confirmed, evidenced exit is the single most important factor on a closed bridge with adverse credit
- Security quality — standard, liquid, well-evidenced property
- LTV — lower leverage gives lenders more comfort
- Explanation — context around adverse events can help lender appetite
Related: bridging loans for bad credit.
Timeline: quote to completion on a closed bridging loan
Closed bridging loans can move quickly because the exit is already confirmed. The fastest completions come from having exit evidence ready and solicitors instructed from day one.
What to include in your first enquiry
- Property address and type
- Estimated value or purchase price
- Loan amount required and term
- Exit strategy and evidence available (exchange confirmation, DIP letter, etc.)
- Any existing debt on the property
- Borrower type (individual, company, SPV)
- Whether the loan is regulated or unregulated
Closed bridging loan case examples
Illustrative scenarios showing where closed bridging loans are the right solution. Figures are indicative and anonymised.
Case 1: residential chain break
Borrower exchanges contracts on the sale of their existing home (completion in 8 weeks) but needs to complete on a new purchase in 2 weeks. A closed bridge funds the purchase; the sale proceeds repay it on completion.
- Loan: £280,000 (70% LTV)
- Term: 3 months
- Exit: exchange of contracts confirmed
- Regulated: yes
Case 2: auction purchase — confirmed BTL refinance
Investor purchases a residential investment property at auction. A mortgage DIP from a buy-to-let lender is in place. Closed bridge completes in 7 working days to meet the auction deadline; refinance repays within 3 months.
- Loan: £210,000 (70% LTV)
- Term: 4 months
- Exit: BTL mortgage DIP confirmed
Related: auction finance.
Case 3: development exit — units under contract
Developer completes a scheme of 4 units. Three are under offer with exchange imminent. A closed development exit bridge provides liquidity while sales complete over the following 6 months.
- Loan: £1.1m (65% LTV of GDV)
- Term: 6 months
- Exit: unit sales — contracts near exchange
Related: development exit bridging loans.
Want a quote for a closed bridging loan?
Send the property address, value or purchase price, loan amount, term and exit evidence. We will confirm lender fit and realistic pricing quickly.
Ready to proceed with a closed bridging loan?
Send the property address, value or purchase price, loan amount, term, exit evidence and borrower type. We will confirm lender fit, realistic pricing and completion timeline quickly — and let you know if a closed structure is the right product for your case.
Any mortgage or debt facility secured against property may be subject to repossession if repayments are not maintained or terms are not met. All finance is subject to underwriting, valuation and legal due diligence. Aura Capital arranges bridging loans as a broker. Where regulated advice is required, this will be confirmed at the outset.
Closed bridging loan FAQs
The most common questions about closed bridging loans — answered properly.
Do closed bridging loans have early repayment charges?
Most closed bridging loans do not carry early repayment charges after any applicable minimum term. If your sale or refinance completes ahead of schedule, you repay the loan and interest stops accruing from that date — you only pay interest for the days you actually held the loan. Interest is typically calculated daily and rolled up to be paid at redemption. Always confirm the specific terms with your lender at DIP stage.
How is interest paid on a closed bridging loan?
Interest on closed bridging loans is typically rolled up and paid at redemption alongside the capital repayment — there are no monthly interest payments to manage during the loan term. Some lenders offer retained interest (deducted from the gross advance upfront) or serviced monthly interest as alternatives. The right structure depends on the borrower's cash flow position and exit timeline.
What is a closed bridging loan?
A closed bridging loan is a short-term secured property loan with a fixed repayment date confirmed at the outset. The borrower has an evidenced exit strategy — typically exchanged contracts on a sale or a mortgage Decision in Principle — that gives the lender certainty about when the loan will be repaid. This certainty typically results in lower rates than open bridging loans.
What is the difference between a closed and open bridging loan?
The key difference is the exit strategy. A closed bridging loan has a confirmed, evidenced repayment date — contracts exchanged, mortgage DIP in place, or equivalent. An open bridging loan has an intended exit but no fixed confirmed date. Open bridging is more flexible but typically priced higher to reflect the greater repayment uncertainty.
Why are closed bridging loans cheaper than open bridging loans?
Lenders price bridging loans based on repayment certainty. A confirmed exit — with documentary evidence such as exchanged contracts or a formal mortgage offer — significantly reduces the lender's risk of non-repayment compared with an open loan. That reduced risk is typically passed on as a lower interest rate.
What counts as a confirmed exit for a closed bridging loan?
The most common confirmed exits are: exchange of contracts on a property sale (with a completion date agreed), a formal mortgage offer or Decision in Principle from a lender, a confirmed buy-to-let mortgage product, and for development exits, units under contract with exchange imminent. Lenders want to see documentary evidence of the exit date, not just a plan.
What LTV is available on a closed bridging loan?
Closed bridging loans typically offer up to 75% net LTV, though the exact LTV depends on the property, borrower and exit. Lower LTVs generally attract better pricing. On regulated closed bridging loans for residential purchases, some lenders will go higher on the right case.
What rates are available on closed bridging loans?
Closed bridging loan rates start from 0.55% per month. Most cases price between 0.65% and 1.10% pm depending on LTV, security type, borrower profile and the strength of the exit evidence. Closed bridging rates are typically lower than comparable open bridging rates on the same asset.
How quickly can a closed bridging loan complete?
Clean closed bridging cases with confirmed, evidenced exits can complete from 3 working days. Most standard cases complete within 5–7 working days. The biggest variable is legal complexity — having a responsive solicitor instructed early is the single most effective way to keep a closed bridging loan on schedule.
Are closed bridging loans regulated?
It depends on the use of the property. If you or a close family member will live in the security property, the loan is regulated under the FCA. Regulated closed bridging loans are common for residential chain breaks. If the loan is for an investment property or is taken by a company, it is typically unregulated. We confirm the regulatory status at the outset.
Can I get a closed bridging loan with bad credit?
Yes, in many cases. Closed bridging loans are asset-led — the lender focuses on the security quality and the certainty of the confirmed exit rather than credit score alone. CCJs, defaults and missed payments can be considered where the exit is clearly evidenced and the LTV is sensible. See: bridging loans for bad credit.
Can I get a closed bridging loan after exchanging contracts?
Yes — post-exchange is one of the most common and well-accepted scenarios for a closed bridging loan. Exchanging contracts gives the lender documentary evidence of a confirmed completion date, which is the ideal exit evidence for a closed bridge. This is particularly common on residential chain breaks where the borrower needs to complete on a purchase before their existing sale completes.
What happens if I cannot repay a closed bridging loan by the agreed date?
Missing the agreed repayment date on a closed bridging loan can result in default interest charges and, in the worst case, enforcement action by the lender. If you anticipate a delay to your exit, contacting your broker and lender early is essential. Some lenders will consider an extension where the delay is minor and well-evidenced. The property securing the loan may be at risk if the loan is not repaid.
How do I apply for a closed bridging loan?
The fastest route is to send the property address, estimated value or purchase price, loan amount, term, exit evidence and borrower type via the enquiry form or WhatsApp. We will confirm lender fit and pricing quickly — the strength and clarity of your exit evidence is the most important factor in how fast we can move.
