Bridging is a short-term finance solution designed to allow you to purchase or remortgage a property when long-term finance isn't an option.

When is Bridging used?

Bridging finance can be used for any legal purpose. Examples of short-term finance include:

- Buying a new property before selling an existing one.
- Purchasing where quick completion is required e.g. at auction.
- Refurbishing property.
- Raising funding quickly e.g. for business or personal use.
- Change of use e.g. HMO/multi-unit conversions.
- Home Improvements e.g. EPC, extensions, barn/garage/loft conversions.

Is Bridging expensive?

In an increased interest rate environment, term lending has become more expensive, while bridging rates have stayed relatively static.

Bridging interest rates are charged monthly though, not annually like most other types of loan. Their annual equivalent rate of interest will be much higher than the monthly interest rate.

In some circumstances Bridging can be great value for money by delivering a short-term solution that traditional long-term lenders can't.

Serviced Interest vs Rolled Up Interest

Serviced Interest is when the interest is paid monthly by the borrower to the lender like a standard mortgage or loan.

Rolled up Interest is when the monthly interest payment is not paid monthly but is instead added to the original loan balance and paid when redeemed.

Regulated or Non-Regulated?

Regulated

In simple terms, a regulated mortgage contract is a loan secured by a charge over a residential property which has been lived in by the applicant or a family member.

The purpose of the loan is not wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by you.

Non-Regulated

The loan is unregulated if it's secured against a property that you have never, and will never, reside in i.e. purchasing a buy-to-let property to retain or develop.

Some forms of Buy to Let mortgages are not regulated by the Financial Conduct Authority.

Get in touch with our friendly and knowledgeable team for more information.