Bridging Loans: The Complete Guide
Bridging loans are one of the most powerful — and most misunderstood — tools in UK property finance. This guide covers how they work, what they cost, every asset class and property type we fund, and the full application process.
In this guide
- What is a bridging loan?
- How bridging loans work
- What they are used for
- Bridging loan rates 2026
- Costs and fees
- Retained, rolled or serviced
- Bridging loan calculator
- How much you can borrow
- First vs second charge
- Regulated vs unregulated
- Open vs closed
- Exit strategies
- Valuations
- Property types
- Who can get one
- How to apply
- How long it takes
- Bridging vs alternatives
- Pros, cons and risks
- Choosing a lender
- Glossary
- FAQs
- About this guide
Key takeaways
- A bridging loan is short-term finance secured on property, usually for 3 to 18 months (available from 1 to 24), repaid in one lump sum from a sale or a refinance.
- Rates start from 0.61% per month on residential first-charge cases at up to 50% LTV, and rise with LTV, property type, credit and loan size.
- Maximum LTV is up to 90% on residential through our highest-net-advance route, 70% on commercial and semi-commercial, and 65% on land.
- Expect a 2% arrangement fee (minimum £2,000), a valuation, lender legal fees and a £395 admin fee. Interest is usually retained or rolled up, so there is no monthly payment.
- Lenders care most about the security and the exit. Income and credit score matter less than on a mortgage.
- Most cases complete in 5 to 15 working days. Urgent auction and chain-break cases can complete in 48 to 72 hours.
What is a bridging loan?
A bridging loan is a short-term loan secured against property, used to "bridge" a gap between needing money now and receiving it later, from a sale, a refinance or another source. Terms usually run from 1 to 24 months and the loan is repaid in one lump sum at the end.
The terms bridging loan, bridging finance and bridge loan mean the same thing in the UK. All three describe property-secured lending where the lender is more interested in the value of the asset and how you will repay than in your monthly income.
That focus on the asset is what makes bridging different from a mortgage. A mortgage lender assesses affordability over 25 years and needs the property to be habitable and mortgageable on day one. A bridging lender assesses whether the property is worth enough to secure the loan and whether your exit strategy will repay it within the term. That is why bridging can fund property a mortgage cannot: an uninhabitable house bought at auction, a building mid-conversion, a plot of land, or a purchase that must complete in days.
The trade-off is cost. Bridging is priced monthly rather than annually and carries higher fees than long-term borrowing, so it is designed to be held for months, not years. Used well, it buys speed and flexibility that are worth more than the extra interest.
How do bridging loans work?
Every bridging loan is built from the same five parts. Understanding each one makes it easier to compare quotes and see where the real cost sits.
- Security. The loan is secured by a legal charge over one or more properties. That can be the property you are buying, a property you already own, or both. A first charge means the bridging lender is repaid first if the property is sold; a second charge sits behind an existing mortgage.
- Loan amount and LTV. The lender advances a percentage of the property's value, known as the loan-to-value (LTV). On residential property it can go up to 90%. The lender calculates fees and interest on the gross loan.
- Interest. Interest is quoted as a monthly rate, for example 0.69% per month. It is usually retained (deducted upfront) or rolled up (added to the balance) so that you make no monthly payments. You can also pay it monthly.
- Fees. An arrangement fee, valuation, lender legal fees and an admin fee are normally deducted from the advance. Some lenders also charge an exit fee.
- Exit. At the end of the term you repay the whole balance in one go, usually by selling the property or refinancing onto a mortgage or longer-term loan.
A worked example
An investor buys a residential property worth £400,000 and borrows £260,000 (65% LTV) for 12 months with good credit and a full RICS valuation. Using the same rate ladder and fee model as our bridging loan calculator:
If the property sells after seven months, most lenders refund the unused retained interest, so the real cost falls with the term. Your own solicitor's fees and stamp duty sit outside these figures. We charge no upfront broker fees.
See the numbers on your own deal
Indicative rate, LTV and net advance in about a minute. No credit search, no fee.
What are bridging loans used for?
Bridging is used wherever money is needed faster, or against a property, than a mortgage lender will allow. These are the cases we arrange most often. Each links to a dedicated guide with product-specific rates and criteria.
Auction purchases
Complete inside the 28-day auction deadline, including lots a mortgage lender will not touch.
From 0.61% pcm · up to 90% LTVRefurbishment
Buy and renovate a property, with works funded in arrears on heavier projects.
Light and heavy worksLight refurbishment
Cosmetic, non-structural works with no planning, typically capped around 15% of value.
From £50kChain breaks and fast purchases
Buy your next property before your current one has sold, or secure a below-market deal quickly.
Completion from 5 working daysDevelopment exit
Repay expensive development finance at practical completion while units sell or let.
Lower rate than most dev loansLand
Land with or without planning, including hope value, site assembly and auction plots.
From 0.99% pcm · up to 65% LTVCommercial and semi-commercial
Shops, offices, industrial, mixed-use and vacant commercial property.
From 0.79% pcm · up to 70% LTVHMO purchase and conversion
Fund an HMO, or a house you are converting into one, before it qualifies for a term loan.
Priced on the residential ladderRefinance and re-bridge
Replace a maturing or defaulting bridge, or release equity quickly against property you own.
Close in 5–10 daysPermitted development
Office, retail and commercial-to-residential conversions under prior approval.
Purchase plus worksBad credit bridging
CCJs, defaults, arrears or a past IVA. Specialist lenders price the property, not the score.
Priced by credit profileBridge to let
Bridge the purchase and refurbishment, then move onto a buy-to-let mortgage with the same lender.
Exit agreed upfront
What are bridging loan rates in 2026?
Bridging loan interest rates are quoted per month. Our rates currently start from 0.61% per month, which equals 7.32% a year before compounding. The rate you are offered depends mainly on four things: the LTV, the property type, your credit profile and the loan size.
The table below is the rate ladder our bridging loan calculator uses. It reflects the lenders we place business with most often, and is the starting point before a lender underwrites the case.
| Property type | LTV band | Rate from (pcm) | Annual equivalent |
|---|---|---|---|
| Residential / HMO, first charge | Up to 50% | 0.61% | 7.32% |
| Residential / HMO, first charge | 50–65% | 0.69% | 8.28% |
| Residential / HMO, first charge | 65–75% | 0.73% | 8.76% |
| Residential / HMO, first charge | 75–90% | 0.89% | 10.68% |
| Commercial / semi-commercial | Up to 50% | 0.79% | 9.48% |
| Commercial / semi-commercial | 50–70% | 0.89% | 10.68% |
| Land | Up to 65% | 0.99% | 11.88% |
Indicative, October 2026. Annual equivalent is the monthly rate × 12. All rates subject to lender underwriting, valuation and legal due diligence.
What moves the rate up or down
| Factor | Effect on pricing |
|---|---|
| CCJs, defaults or missed payments | +0.10% pcm and maximum LTV capped at 70% |
| Loan under £100,000 | +0.10% pcm, with a minimum rate of 0.82% pcm |
| AVM or desktop valuation (fastest route) | The full-valuation rate at up to 65% LTV plus 0.10% pcm, with a maximum LTV of 75%. In exchange: no valuation fee and completion in about 5 working days |
| Lower LTV | Each step down the ladder reduces the rate; 50% LTV or below gets the best pricing |
| Clear, evidenced exit | Widens the lender panel and supports pricing at the lower end of each band |
| Uninhabitable or non-standard property | Fewer lenders; priced case by case, typically above the standard residential ladder |
The headline rate is only part of the cost. A loan at 0.65% with a 1% exit fee and a three-month minimum interest period can cost more over a short term than a loan at 0.73% with neither. Always compare the total cost of finance across the term you actually expect to hold the loan.
What rate would you get?
We place cases across a wide panel and show you the cheapest, fastest and highest-advance option side by side.
How much does a bridging loan cost?
Most of the cost of a bridging loan is interest, but the fees are significant on short terms and should be budgeted from the start. Most are deducted from the loan on completion rather than paid upfront.
| Cost | Typical amount | When it is paid |
|---|---|---|
| Interest | From 0.61% pcm | Retained or rolled up on completion; or monthly if serviced |
| Arrangement fee | 2% (min £2,000) | Deducted from the gross loan on completion |
| Valuation | £850 RICS · £0 AVM | Full RICS valuations are usually paid when instructed; AVM and desktop routes often have no fee |
| Lender legal fees | 0.25% (min £750) | Deducted on completion |
| Admin fee | £395 | Deducted on completion |
| Exit fee | Nil to 1% | On redemption. Many of the lenders we use charge none |
| Your own solicitor | Varies | Paid directly by you |
Fees to look for in the small print
- Minimum interest period. Some lenders charge one to three months' interest even if you repay in week two.
- Refund of retained interest. Check that unused retained interest is refunded if you redeem early. Most lenders do; a few do not.
- Extension fees and default rates. If the exit runs late, a lender may charge an extension fee or move to a default rate, often 1% to 3% per month higher. Know these numbers before you sign.
- Works drawdown fees. On heavy refurbishment, each drawdown may need a monitoring surveyor visit, charged per visit.
How is bridging loan interest paid? Retained, rolled-up or serviced
How you pay interest changes how much cash you receive on day one and how much you repay at the end. Using the £260,000, 12-month example above:
| Method | How it works | Net advance | Monthly payment | Repay at end |
|---|---|---|---|---|
| Retained | The full term's interest is deducted from the loan upfront. Unused interest is usually refunded on early repayment. | £231,277 | £0 | £260,000 |
| Rolled up | Interest is added to the balance each month and repaid with the loan. | £252,805 | £0 | £281,528 |
| Serviced | You pay the interest monthly, like an interest-only mortgage. | £252,805 | £1,794 | £260,000 |
Retained interest is the most common, because the lender knows the interest is covered and you have no monthly outgoing during a refurbishment or sale. Serviced interest gives the largest day-one advance for the same gross loan but needs provable income. Rolled-up interest is rarer on standard bridges and, where offered, usually means a lower maximum gross LTV.
Bridging loan calculator
Work out your own figures below. The calculator uses the same rate ladder, LTV caps, credit loadings and fee model as our full bridging loan calculator, so the numbers match whichever page you use.
Need second-charge, refurbishment, GDV or multi-property figures? Open the full bridging loan calculator
How much can you borrow with a bridging loan?
Bridging loans through Aura Capital run from £26,000 to £10 million and above. How much you can borrow on a given property is set by its value and the maximum LTV for its type. Gross LTV is the full loan, including retained interest and fees, divided by the property value. Net LTV is the cash you actually receive divided by the value. Lenders cap the gross figure, so always check which one a quote uses.
| Security | Standard max LTV | Notes |
|---|---|---|
| Residential, first charge | 90% | Highest-net-advance route at 0.89% pcm, including refurbishment purchases. Houses, flats and portfolios |
| HMO and multi-unit freehold blocks | 90% | Priced on the residential ladder |
| AVM or desktop valuation route | 75% | Faster, no valuation fee, priced 0.10% pcm above the 65% LTV rate |
| Semi-commercial and commercial | 70% | Shops with flats, offices, industrial, mixed-use |
| Any security with adverse credit | 70% | CCJs, defaults or missed payments |
| Land | 65% | With or without planning; lower for strategic or greenbelt land |
| Second charge | Lower combined LTV | Combined with the first mortgage; priced above first-charge equivalents |
Can you borrow 100% with a bridging loan?
Not against a single property at its full value. But you can fund 100% of a purchase price in two ways: by buying below market value, where the lender lends against the true value rather than the price, or by offering additional security, such as equity in another property you own. Both are common on auction and off-market purchases.
First charge vs second charge bridging loans
A first charge bridging loan is the main loan on the property, either because the property is unencumbered or because the bridge repays the existing mortgage. It gets the lowest rates and highest LTVs.
A second charge bridging loan sits behind an existing mortgage that stays in place. It is useful when you have a good mortgage rate you do not want to lose, or when the first lender would charge large early repayment charges. Because the second-charge lender is repaid only after the first, pricing is higher and the maximum combined LTV is lower. Some lenders also need the first lender's consent. An equitable charge is a further option where a legal charge cannot be registered, for example on property held through a company.
Regulated vs unregulated bridging loans
Whether a bridging loan is regulated by the Financial Conduct Authority depends on who will live in the property, not on the loan's size or purpose.
| Regulated bridging | Unregulated bridging | |
|---|---|---|
| Security | A home that you or a close family member live in, or will live in | Investment, commercial or development property; land |
| Typical borrower | Homeowner buying before selling, or a chain break on their own home | Investors, landlords, developers, companies and SPVs |
| Maximum term | Usually 12 months | Commonly up to 18–24 months |
| Consumer protection | FCA rules, including affordability and the Financial Ombudsman Service | Contract terms; no FCA consumer protections |
Aura Capital is not authorised or regulated by the FCA and arranges unregulated bridging only. If your case is regulated, we will tell you so at the first call and refer you to an FCA-authorised firm.
Open vs closed bridging loans
A closed bridging loan has a fixed repayment date, usually because contracts have already been exchanged on the sale that will repay it. The lender knows exactly when and how it will be repaid, so closed bridges tend to be cheaper and quicker to approve.
An open bridging loan has no fixed repayment date, only a maximum term, because the exit has not yet been secured. Most investment, auction and refurbishment bridges are open. Lenders want to see a credible plan, such as comparable sales evidence or a mortgage agreement in principle, and may price slightly higher to reflect the uncertainty.
What is a bridging loan exit strategy?
The exit strategy is how you will repay the loan, and it is the single biggest factor in whether a lender says yes. A strong exit can unlock a higher LTV and a lower rate; a weak one will narrow the panel to a handful of lenders.
| Exit | What lenders want to see |
|---|---|
| Sale of the property | Comparable sales, an agent's marketing appraisal, a realistic timeline and enough margin for price falls |
| Refinance onto a buy-to-let mortgage | Rental evidence or a letting agent's appraisal, a stress-tested rental cover calculation and, ideally, a mortgage agreement in principle |
| Refinance onto a commercial mortgage | Lease terms, tenant covenant, trading accounts if owner-occupied and a commercial lender's indicative terms |
| Sale of another asset | Evidence of that asset's value and progress of its sale; often taken as additional security |
| Development or bridge-to-let exit | Planning position, build programme, GDV evidence and the takeout lender's appetite |
What happens if your exit is delayed?
Talk to the lender before the term ends. The usual options are a short extension with the same lender, normally for a fee; a re-bridge onto a new lender, which works best when started at least six to eight weeks before expiry; or, if nothing is agreed, the loan moves into default and a higher default rate applies. Building three to six months of headroom into the original term costs little and avoids most of these situations.
Do bridging loans need a valuation?
Every bridging lender needs to know what the property is worth. How they find out has a large effect on cost and speed.
| Route | Turnaround | Typical cost | Best for |
|---|---|---|---|
| Automated valuation (AVM) | Same day | £0 | Standard residential property with good comparable data |
| Desktop valuation | 1–2 days | £0–£300 | Residential and some light-refurb cases |
| Full RICS valuation | 3–10 days | £850+ | Highest LTV, lowest rate, commercial, land and non-standard property |
AVM and desktop routes cut a week or more from the timeline and remove the valuation fee, in exchange for a slightly higher rate and a 75% LTV cap. We are one of the UK's specialists in no-valuation bridging loans, including AVM bridging, desktop valuation bridging and no-valuation heavy refurbishment.
What properties can you get a bridging loan on?
Bridging is asset-led, so almost any property with a clear value and a realistic exit can be used as security. The asset type sets the lender panel, the LTV and the rate band.
Residential
Houses, flats, portfolios, high-value homes and properties needing works. Uninhabitable property, such as homes without a working kitchen or bathroom, is fundable where a mortgage is not.
HMOs and multi-unit blocks
Licensed HMOs, conversions in progress and multi-unit freehold blocks, including blocks to be split and sold.
Semi-commercial
Shops with flats above, pubs with accommodation and other mixed-use buildings.
Commercial
Offices, retail, industrial, warehouses, leisure, care homes and vacant or under-let buildings.
Land
Residential land with full or outline planning, land without planning, brownfield, agricultural and strategic sites.
Non-standard
Listed buildings, short leases, non-standard construction, properties above commercial units and ex-local-authority blocks, case by case.
Who can get a bridging loan?
Bridging lenders lend to a wider range of borrowers than mortgage lenders, because they rely on the property and the exit rather than income. Eligible borrowers include:
- Individuals, including first-time investors, retired borrowers and the self-employed.
- Limited companies and SPVs, usually with personal guarantees from the directors.
- LLPs, partnerships and trusts.
- Foreign nationals and UK expats buying or refinancing UK property.
- Borrowers with adverse credit, including CCJs, defaults, arrears, past IVAs and discharged bankruptcy.
What lenders assess
In order of weight: the value and saleability of the security, the strength of the exit, the LTV, the borrower's experience on projects like this one, and credit history. Income is important where the loan is serviced or where the exit is a refinance that needs affordability at the end of the term.
How to apply for a bridging loan
A well-prepared bridging application moves quickly. Most delays come from missing documents or late solicitor instructions, not from the lender.
Enquiry and indicative terms
Share the property, value, loan needed, term and exit. You receive indicative rate, LTV and fees, with the cheapest, fastest and highest-advance options compared.
Decision in principle
The chosen lender reviews the case and issues a DIP setting out terms, conditions and the valuation route.
Valuation
An AVM, desktop or full RICS valuation is instructed, depending on the route.
Underwriting and formal offer
ID, credit and exit checks run alongside the valuation. The lender issues a formal offer.
Legal work
Your solicitor and the lender's solicitor complete title checks, searches and the charge. Instructing your solicitor on day one saves the most time.
Completion
Funds are sent to your solicitor and the purchase or refinance completes.
Documents you will need
- Photo ID and proof of address for every borrower, director and guarantor
- Property address, purchase price or estimated value, and the memorandum of sale or auction legal pack
- Evidence of the exit: agent's appraisal, comparables, rental appraisal or mortgage agreement in principle
- Statement of assets and liabilities, and a property portfolio schedule if you own others
- For companies: certificate of incorporation, shareholder details and the directors' details
- For refurbishments: schedule of works, costings and the contractor's details
- Your solicitor's details
Ready to start?
Get indicative terms now and a specialist will call you within the hour during working hours.
How long does a bridging loan take?
Most bridging loans complete in 5 to 15 working days from enquiry. The fastest cases complete in 48 to 72 hours.
| Scenario | Typical completion | What makes it possible |
|---|---|---|
| Urgent, simple residential | 48–72 hours | AVM valuation, solicitors pre-instructed, clean title, clear exit |
| Standard residential | 5–10 working days | Desktop or RICS valuation, documents ready on day one |
| Refurbishment or HMO | 10–15 working days | Schedule of works and costings reviewed alongside the valuation |
| Land | 7–25 working days | 7 days up to £300,000; 10–15 days up to £750,000; 14–25 days above |
| Commercial or complex | 15–25 working days | Full RICS valuation, leases or planning reviewed |
Bridging loan vs mortgage: what is the difference?
| Bridging loan | Buy-to-let / mortgage | Development finance | Secured loan | |
|---|---|---|---|---|
| Typical term | 1–24 months | 2–30 years | 12–36 months | 1–25 years |
| Speed | Days | 4–12 weeks | 4–10 weeks | 2–6 weeks |
| Pricing | Monthly, from 0.61% | Annual, lowest | Monthly, higher | Annual, mid |
| Uninhabitable property | Yes | No | Yes | Rarely |
| Income-based | Mainly no | Yes | Partly | Yes |
| Best for | Speed, works, short holds | Long-term holds | Ground-up and major conversions | Raising money on a home |
Bridging and mortgages are often used together: bridge the purchase and works, then refinance onto a buy-to-let mortgage once the property is mortgageable. That is the basis of most refurbish-to-rent strategies and of our bridge-to-let product.
Is a bridging loan a good idea? Pros, cons and risks
Advantages
- Completion in days, not months
- Funds property a mortgage cannot, including uninhabitable and mid-works
- No monthly payments with retained or rolled interest
- Asset-led, so less weight on income and credit score
- Flexible security, including other property you own
Disadvantages
- Higher monthly cost than long-term finance
- Fees are significant on short terms
- The whole balance is due at the end of the term
- Default rates and extension fees if the exit runs late
- Your property may be repossessed if the loan is not repaid
The main risk is the exit. Before borrowing, test it: what happens if the sale takes three months longer, or the property values 10% lower, or mortgage rates rise before you refinance? If the deal still works, bridging is likely to be suitable.
How do you choose a bridging lender or broker?
- Compare total cost, not the headline rate. Include fees, exit fees and minimum interest over the term you expect to need.
- Check how the lender values. AVM, desktop and RICS routes change both speed and cost.
- Read the extension and default terms. These matter more than a 0.05% rate difference.
- Confirm early repayment rules. Is retained interest refunded? Is there a minimum interest period?
- Ask about the lender's track record on your property type, and whether they lend from their own funds.
- Use a broker with direct lender access. We work directly with lenders, without master brokers or networks, so you see more of the market and your case is presented by the person who underwrote it.
Bridging loan glossary
- Gross loan
- The total amount borrowed, including any retained interest and fees added to the loan.
- Net loan
- The cash actually released to you after fees and retained interest are deducted.
- LTV (loan to value)
- The loan divided by the property value, expressed as a percentage.
- LTGDV
- Loan to gross development value: the loan as a share of the property's value after works.
- Retained interest
- Interest for the full term, deducted from the loan on day one.
- Rolled-up interest
- Interest added to the balance each month and repaid at the end.
- Serviced interest
- Interest paid monthly by the borrower.
- Exit strategy
- How the loan will be repaid: usually a sale or a refinance.
- DIP
- Decision in principle: a lender's conditional agreement to lend, before valuation and legals.
- First charge
- The main legal charge on a property; repaid first on sale.
- Second charge
- A charge behind an existing mortgage; repaid after the first charge.
- Default rate
- A higher interest rate that applies if the loan is not repaid when due.
- Personal guarantee
- A director's promise to repay a company's loan if the company cannot.
- Additional security
- A second property charged to the lender to increase how much you can borrow.
Bridging loan FAQs
What is a bridging loan?
A bridging loan is a short-term loan secured against property, used to bridge the gap between needing money now and receiving it later from a sale or refinance. Terms usually run from 1 to 24 months and the loan is repaid in one lump sum at the end.
How does a bridging loan work?
The lender advances a percentage of the property value (the LTV), secured by a legal charge. Interest is charged monthly and is usually retained or rolled up, so there are no monthly payments. Fees are deducted on completion, and the whole balance is repaid at the end of the term from a sale or refinance.
How much does a bridging loan cost?
Interest starts from 0.61% per month, plus a 2% arrangement fee (minimum £2,000), lender legal fees of 0.25% (minimum £750), a £395 admin fee and a valuation, typically £850 for a full RICS report. On a £260,000 loan at 0.69% for 12 months, the total cost of finance is about £28,723.
What are current bridging loan rates?
As of October 2026, rates through Aura Capital start from 0.61% per month on residential first-charge loans at up to 50% LTV, rising to 0.69%, 0.73% and 0.89% at higher LTVs. Commercial starts from 0.79% and land from 0.99% per month. Adverse credit and loans under £100,000 each add 0.10%.
What is the minimum and maximum I can borrow?
Bridging loans through Aura Capital run from £26,000 to £10 million and above. There is no fixed ceiling: larger facilities are arranged on commercial and development cases.
How much deposit do I need for a bridging loan?
At the 90% maximum LTV on our highest-net-advance route for residential property, you need a 10% deposit plus fees. Commercial needs about 30% and land about 35%. You can reduce the deposit by buying below market value or offering another property as additional security.
Do I need to prove my income for a bridging loan?
Not necessarily. Income evidence matters most on regulated cases or where the exit is a refinance requiring affordability at the exit date. On unregulated, asset-led cases, security and exit carry far more weight.
How quickly can a bridging loan complete?
Most bridging loans complete in 5 to 15 working days. Simple, urgent residential cases using an AVM valuation, with solicitors instructed on day one, can complete in 48 to 72 hours. Land completes in 7 to 25 working days depending on loan size, and commercial or complex cases usually take 15 to 25 working days.
Can I get a bridging loan with bad credit?
Yes. Bridging lenders focus on the property and the exit, so CCJs, defaults, arrears and past IVAs do not rule you out. On our calculator, CCJs, defaults or missed payments add 0.10% per month and cap the LTV at 70%; specialist lenders then price by how recent and how serious the issue is. See our bad credit bridging loans guide.
What is an exit strategy?
The exit strategy is how you will repay the bridging loan, usually by selling the property or refinancing onto a mortgage. It is the single most important part of the application, and lenders will want evidence such as comparable sales or a mortgage agreement in principle.
What happens if I cannot repay a bridging loan on time?
Speak to the lender before the term ends. Options include a short extension with the same lender, normally for a fee, or a re-bridge onto a new lender. If nothing is agreed the loan goes into default, a higher default rate applies, and ultimately the lender can repossess the property.
Are bridging loans regulated?
Only when the security is a home that you or a close family member live in or will live in. Bridging on investment, commercial or development property is unregulated. Aura Capital arranges unregulated bridging only and refers regulated cases to an FCA-authorised firm.
Can I get a bridging loan without a valuation?
Yes, on suitable residential cases. Lenders can use an automated (AVM) or desktop valuation instead of a full inspection, which removes the valuation fee and can save a week or more. The trade-off is a maximum LTV of 75% and around 0.10% per month more. See no-valuation bridging loans.
What is the difference between gross and net loan?
The gross loan is the total borrowed, on which fees and interest are calculated. The net loan is the cash released to you after the arrangement fee, legal fees, valuation and any retained interest are deducted.
What is retained interest on a bridging loan?
Retained interest is the full term's interest deducted from the loan on day one, so you make no monthly payments. If you repay early, most lenders refund the unused portion. Rolled-up interest is added to the balance instead, and serviced interest is paid monthly.
Can I repay a bridging loan early?
Yes. Most bridging loans have no early repayment charge, although some lenders apply a minimum interest period of one to three months. Check that unused retained interest is refunded on early redemption.
Can a limited company or SPV get a bridging loan?
Yes. Limited companies and SPVs are among the most common bridging borrowers. Lenders usually ask for personal guarantees from the directors. See SPV bridging loans.
Can I use a bridging loan to buy at auction?
Yes. Bridging is the standard way to fund an auction purchase because it can complete inside the usual 28-day deadline and can fund properties a mortgage lender will not. Arrange a decision in principle before you bid. See auction bridging loans.
Can I get a bridging loan on an uninhabitable property?
Yes. Bridging lenders fund uninhabitable and non-mortgageable property, for example homes without a working kitchen or bathroom, then the loan is repaid by a sale or a mortgage once the works are done.
What is the difference between light and heavy refurbishment bridging?
Light refurbishment covers cosmetic, non-structural works not needing planning permission, typically capped around 15% of the property's value. Heavy refurbishment covers structural works, extensions and conversions, usually needing a defined scope of works and contractor quotes.
What is a second charge bridging loan?
A second charge bridging loan sits behind an existing mortgage that stays in place. It lets you raise money without repaying a good mortgage rate, but the maximum combined LTV is lower and rates are higher than on a first charge.
Is a bridging loan the same as a mortgage?
No. A mortgage is long-term, priced annually and based on affordability. A bridging loan is short-term, priced monthly and based mainly on the property and the exit. They are often used together: bridge the purchase and works, then refinance onto a mortgage.
Does a bridging loan enquiry affect my credit score?
Getting indicative terms from Aura Capital needs no credit search. Lenders normally run a credit search at full application, once you have chosen to proceed.
Can foreign nationals or expats get a UK bridging loan?
Yes. Several lenders on our panel lend to foreign nationals and UK expats buying or refinancing UK property, usually through a UK company or SPV. See foreign national bridging loans.
Is a bridging loan a good idea?
A bridging loan is a good fit when speed or flexibility is worth more than the extra cost: an auction deadline, a property a mortgage will not fund, or a short-term gap before a sale or refinance. It is a poor fit when the exit is uncertain or the hold will be long.
Who wrote this guide and how it is kept up to date
Harry Baker
Harry holds an MSc in Real Estate & Finance from the University of Reading and structures bridging, refurbishment and development facilities for UK investors and developers. He writes and maintains Aura Capital's bridging guides and calculators.
- Team transacted
- £500m+
- Combined experience
- 15 yrs
- Formal offers from
- 6 hrs
How we compiled the figures
Rates, LTV limits and fees in this guide come from the same lender rate ladder and fee model as our bridging loan calculator, and are checked against live cases each month. Worked examples use those figures with no rounding. Completion times are based on cases we have arranged, not on lender marketing claims.
Sources
- FCA Handbook, PERG 4: when a loan secured on land is a regulated mortgage contract
- GOV.UK, Stamp Duty Land Tax: purchase taxes that sit outside bridging finance costs
- HM Land Registry: registration of first and second legal charges
- RICS: standards for the full valuations bridging lenders rely on
Find the right bridging product.
Each product page has its own calculator, criteria and rates. Or use the full calculator to compare every option.
Indicative bridging terms in about a minute.
No commitment and no credit search. A senior specialist will confirm structure, timing and next steps, usually within the hour.
- Direct line
- 01451 514 563
- Enquiries
- enquiries@auracapital.co.uk
- Office
- 79 Palace Gardens Terrace, Kensington, London W8 4EF
Your property may be repossessed if you do not keep up repayments on a loan secured on it. Bridging finance is short-term borrowing and needs a clear, credible exit strategy. All figures in this guide are indicative, based on our lender panel in October 2026, and subject to lender underwriting, valuation and legal due diligence. Aura Capital is a trading name of Chammosair Limited, registered in England & Wales, company no. 15786496. Aura Capital is not authorised or regulated by the Financial Conduct Authority and does not arrange regulated loans or give financial advice; regulated cases are referred to an authorised firm.