Lite Mortgages > Bridging Loans

Bridging Loans

A bridging loan is a short-term financing option designed to bridge the gap between purchasing a new property and selling an existing one. It is commonly used when buyers need quick access to funds, such as securing a home before selling their current property.

The loan amount is typically secured against the equity in the existing property and is repaid once the property is sold or a standard mortgage is used to settle the loan. The repayment period is usually 12 months or less.

Bridging loans can be beneficial for buying at auction, funding renovations, or preventing a property chain from collapsing. However, they often come with higher interest rates and fees compared to traditional mortgages due to their short-term and flexible nature.

For longer-term funding on property projects, explore our Self Build Mortgages page.

If you’re looking for a flexible and speedy finance options, we are here to guide you through the intricacies of bridging loans and help you secure the right financial bridge that aligns with your needs.

Mortgage Advice on Bridging Loans

As someone in need of bridging finance, you likely have many questions and concerns about the process.

By having an initial discussion with one of our team, we can answer your questions and guide you through the process, ensuring you can move forward with confidence—contact us today.

Two individuals share a joyful embrace in a bright, sunlit room filled with unpacked cardboard boxes.

Get in Touch with an Expert

Request a call back from a mortgage adviser at PLS Financial Services by entering your details below. One of our experts will be in touch with you soon.

    Who are PLS Financial Services?

    Lite Mortgages is a business introducer for PLS Financial Services Ltd, an authorised firm regulated by the Financial Conduct Authority (FCA). With over 15 years of experience as an independent broker, PLS offers a comprehensive range of mortgage services for all types of borrowers, along with free initial mortgage advice.

    Their dedicated mortgage brokers are available five days a week, providing friendly, honest guidance throughout the application process. With access to a wide range of mortgage products, they offer personalised financial advice to help you secure the most competitive mortgage deal, tailored to your individual needs and circumstances.

    Why use PLS Financial Services?

    Happy couple moving home resting and talking.

    Whether you’re remortgaging, purchasing, or moving home, the process can feel overwhelming with countless tasks to manage. At PLS Financial Services, we take the stress out of securing your mortgage, so you can focus on settling into your new home.

    From assessing affordability to finding the best mortgage rates, our expert team will guide you every step of the way—making the process as smooth and hassle-free as possible.

    PLS Financial Services Ltd are whole-of-market independent mortgage advisers, giving them access to the full range of mortgage products available. This means they can find the best mortgage solutions tailored to every type of buyer, ensuring you get the most competitive deal for your needs.
    PLS Financial Services go beyond just securing your mortgage. They provide expert financial guidance, helping you analyse the costs associated with your move and make informed decisions that align with your long-term financial goals.
    Avoid the stress of navigating the mortgage market alone. We’re here to save you time, effort, and money by finding the best mortgage solution for you.

    Our relationship doesn’t end once your mortgage is secured. We’re here for the long run—whether you need help with future mortgages or financial advice on pensions, savings, or investments.

    What interest rates are available with bridging finance?

    Interest rates on bridging loans tend to be higher because you’re paying for the privilege of borrowing a large sum quickly. Since bridging loans are short-term, interest is charged daily rather than annually.

    There are three ways that interest on a bridging loan can be charged:

    Interest payments are added to the loan and paid when the bridging loan is cleared.

    You borrow the interest upfront for an agreed period and then when the loan is paid back, any unused interest is returned to you.

    How long does it take to get a bridging loan?

    Bridging loans are typically approved quickly, usually within 5-21 days. In some cases, approval can happen even faster, making them a speedy financing option for property transactions.

    Is bridging finance worth it?

    Bridging loans can be a good option if you need to borrow money quickly and flexibly to keep your property transaction on track. However, they are secured against property and typically come with higher interest rates and fees.

    Can I use bridging finance for a buy to let property?

    Yes, it is possible bridging loans can be a great way to secure investment properties quickly before refinancing with a Buy to Let Mortgage.

    What are the alternatives to a bridging loan?

    Let to Buy mortgages can help you buy your next house when you haven’t got a buyer for your existing home. It essentially means you’ll have two mortgages. You’ll need a Let to Buy mortgage for your current property and a standard residential mortgage for the property you want to buy. Find out more in our guide Let to buy mortgages explained.

    You could take out a secured homeowner loan. However, as with bridging loans, your home is at risk if you don’t keep up the repayments.

    If the amount you want to borrow on a bridging loan is relatively small, this may be a cheaper option than a bridging loan.

    Due to the complexities involved and the fact that each individual’s circumstances are different, it is crucial to seek expert mortgage advice. Get in touch with a mortgage adviser at PLS to see how they can help.

    What fees can be involved in a bridging loan?

    A mortgage valuation fee covers the cost of assessing the value of the property you plan to buy. This mortgage valuation is carried out by a certified surveyor or an Automated Valuation Model (AVM) to confirm if the property qualifies as suitable collateral for your mortgage.

    The valuation cost varies by lender and property price, typically around £300, but it may be higher for high-value properties. Some lenders include this valuation at no extra cost.

    It’s important to note that this valuation is for the lender’s benefit only, not yours. If you need a more detailed assessment, consider:

    • Homebuyer’s Survey (RICS Level 2 Survey) – Ideal for conventional properties in reasonable condition, providing insights on repairs and maintenance.
    • Full Structural Survey (RICS Building Survey) – A comprehensive inspection for older, unusual, or heavily modified properties.

    For tailored mortgage advice, get in touch with us today.

    A booking fee (also known as an application or reservation fee) is a charge some lenders require when you apply for a mortgage. It helps secure the loan during the application process.

    This fee typically ranges from £100 to £300 and is usually paid upfront. However, not all mortgage deals include a booking fee, so it’s worth checking before applying.

    A telegraphic transfer fee (also known as a CHAPS fee) is a charge for transferring mortgage funds to the seller’s solicitor on completion day. This ensures a same-day transfer between banks.

    The fee is usually £25 to £50 and is either added to your mortgage amount or deducted from the funds transferred.

    When using a mortgage broker, you may need to pay a broker fee for their services, such as arranging the mortgage and providing expert advice.

    The fee structure varies—some brokers charge a fixed fee, while others take a percentage of the loan amount.

    If you repay your mortgage during a fixed-rate tie-in period, you may have to pay an early repayment charge (ERC).

    This charge is typically a percentage of the outstanding mortgage balance and usually reduces each year until the fixed-rate period ends.

    Once you’ve repaid your mortgage, your lender may charge an exit fee, also known as a discharge fee, to close your mortgage account.

    This fee typically ranges from £0 to £300, depending on your lender’s terms.

    The average solicitor fees for buying and selling a house in the UK vary based on transaction complexity, property value, and location.

    Legal costs typically range between £1,000 – £1,800, with additional expenses such as disbursements and local searches, which can add £250 – £350 when purchasing a property.

    These are estimates, and actual costs may vary. It’s best to obtain a detailed quote from your solicitor or conveyancer to fully understand the expenses involved.

    We can assist you with this! To learn more about the home-moving process, explore our blog post, which simplifies conveyancing for you.

    The cost of moving is often overlooked, but it’s important to budget for it.

    We recommend gathering quotes from multiple local removal companies to find the best deal. On average, moving from a 3-bedroom house to a new home 50 miles away costs around £1,181.

    Stamp Duty is a tax that usually applies when buying a property in the UK. The amount you pay depends on your personal circumstances, the property price, and its location within the UK.

    Use our Stamp Duty Calculator to determine how much you may owe in your specific situation.

    An estate agent fee is the payment made for the services an estate agent provides when selling a property. These services typically include:

    • Property valuation
    • Written description & floor plans
    • Professional photography
    • Marketing & advertising
    • Organising viewings
    • Negotiating the sale price

    Estate agent fees are usually a percentage of the sale price, payable once the property is sold. In the UK, fees typically range from 0.9% to 3.6%, with the 2024 average (including VAT) at 1.42%. For example, on a £275,000 home, fees would be approximately £3,900.

    Some agents offer flat-fee rates instead of percentage-based fees. It’s always best to compare options and consult multiple agents to understand what their fee covers.

    Frequently asked questions

    Yes, it’s possible to get a mortgage with irregular income, but lenders will assess your financial situation carefully. Here’s how different income types are considered:

    Employed with a Permanent Contract

    • Lenders verify your basic annual salary.
    • Overtime, commission, or bonuses are averaged (usually over 3 months).

    Zero-Hour Contracts / Irregular Hours

    • Most lenders require a minimum of 12 months’ employment history in the same role.
    • The income used will depend on the lender’s criteria.

    Self-Employed Applicants

    • A minimum of 12 months trading and at least one year’s accounts is required.
    • Lenders typically use an average of the last two years’ declared income (or the latest year if lower).
    • Income is assessed based on your SA302/tax calculation.

    Limited Company Directors & Shareholders

    • You’ll be considered self-employed if you own a large shareholding.
    • Lenders assess income based on salary + dividends or net profit, using tax records and certified company accounts.

    Need tailored advice? Speak to a mortgage adviser today to explore your options.

    Your credit score plays a crucial role in your ability to secure a mortgage. Mainstream lenders use it—along with other factors—to assess your creditworthiness and the risk involved in lending to you. However, each lender has its own in-house scoring system, which is where our expertise can help.

    Why Your Credit Score Matters

    • Eligibility – A higher credit score increases your chances of mortgage approval. If your score falls below a lender’s threshold, securing a mortgage may be challenging.
    • Interest Rates – A strong credit score can unlock lower interest rates, potentially saving you thousands over the life of your loan.
    • Loan Amount – Lenders may offer larger loan amounts to applicants with a good credit history.
    • Deposit Requirements – If your credit score is low, you may need to provide a larger deposit to offset the lender’s risk.
    • Mortgage Approval – Lenders review your credit history in detail. Missed payments, defaults, or bankruptcy could result in your application being declined.

    How to Improve Your Credit Score Before Applying

    • Pay bills on time – Late payments on credit cards, loans, or utility bills can negatively impact your score.
    • Manage credit utilisation – Keep your credit card balances low relative to your credit limit.
    • Reduce outstanding debts – Paying down debts improves your credit profile and affordability.
    • Avoid multiple credit applications – Applying for several credit products in a short time can lower your score.

    Can You Get a Mortgage with a Poor Credit Score?

    Yes! Even if your credit score isn’t perfect, specialist mortgage lenders may still be able to help. Some lenders do not use credit scoring but instead assess your application based on set lending criteria. This is why obtaining a copy of your credit report is crucial when applying for a mortgage.

    Need mortgage advice? Get in touch with a mortgage expert today!

    When choosing a mortgage, it’s important to understand the different types of interest rates available. Each option has its own advantages, depending on your financial situation and preferences.

    Fixed-Rate Mortgage

    • The interest rate stays the same for a set period (typically 2–10 years).
    • Monthly payments remain predictable and stable.
    • Ideal if you want protection from interest rate increases.

    Tracker Mortgage

    • The interest rate follows the Bank of England’s base rate.
    • If the base rate changes, your mortgage rate and payments will adjust accordingly.
    • Good for those comfortable with fluctuating payments and potential savings if rates drop.

    Standard Variable Rate (SVR) Mortgage

    • This is the lender’s default rate after your initial deal ends.
    • The lender can increase or decrease the rate at any time.
    • Usually higher than fixed or tracker rates, making it less predictable.

    Discounted Rate Mortgage

    • Offers a lower rate for a set period (typically 2–3 years).
    • The discount applies to the lender’s SVR, so payments can still fluctuate.
    • Can be a good short-term option, but payments may rise if the SVR increases.

    Capped Rate Mortgage

    • Works like a tracker mortgage, but with a maximum interest rate limit.
    • Protects you from significant rate increases while still allowing for savings if rates fall.
    • Provides some security with added flexibility.

    Offset Mortgage

    • Links your mortgage to your savings and current account.
    • The interest is calculated on your mortgage balance minus your linked accounts, reducing the total interest paid.
    • Can be useful if you have substantial savings and want to lower mortgage costs.

    Which Mortgage Interest Rate is Right for You?

    The best option depends on your financial goals, risk tolerance, and preference for stability or flexibility.

    Need expert advice? Speak to a mortgage adviser at PLS Financial Services today to find the best mortgage deal for your situation.

    An Agreement in Principle (AIP)—also known as a Decision in Principle (DIP) or Mortgage in Principle (MIP)—is a preliminary indication of how much a lender may be willing to lend you based on an initial financial assessment.

    Purpose: Helps you understand your borrowing potential before making an offer on a property.

    How to Get an AIP: You provide basic financial details (income, employment status, debts), and the lender performs a soft credit check (which does not impact your credit score).

    Important Note: An AIP is not a guarantee of a mortgage—it is simply an estimate based on preliminary checks. A full mortgage application is required to secure a formal mortgage offer.

    Formal Mortgage Offer

    A formal mortgage offer is the lender’s official confirmation that they will provide you with a mortgage. It includes the specific terms and conditions of the loan, such as:

    • Loan amount
    • Interest rate
    • Repayment schedule
    • Any special conditions

    To receive a mortgage offer, you must complete a full mortgage application. The lender will then conduct:

    • A thorough credit check
    • Verification of your income & financial documents
    • A property valuation

    Once the lender is satisfied, they will issue a formal mortgage offer, which moves you one step closer to purchasing your new home.

    Is a Mortgage Offer Legally Binding?

    No, a mortgage offer is not legally binding. While rare, lenders can withdraw an offer before completion if your financial circumstances change or if new risks arise.

    The house-buying process only becomes legally binding at the exchange of contracts stage.

    Exchange of Contracts:

    • This is when both the buyer and seller commit legally to the transaction.
    • If either party pulls out after this stage, they could lose their deposit or face legal action.
    • The completion date (when the property officially changes ownership) is set during this stage.

    Need more guidance? Our blog on The Conveyancing Process explains this in detail.

    Most lenders apply a loan-to-income (LTI) ratio, which typically allows borrowing up to 4.5 times your gross annual income. However, some lenders may offer higher LTI ratios in specific cases.

    Example Calculation:
    If your gross annual income is £40,000, your estimated maximum mortgage might be:
    £40,000 x 4.5 = £180,000

    Factors that impact your borrowing capacity:

    • Credit score – A higher score may increase loan eligibility
    • Existing debts – Lenders consider your current financial commitments
    • Monthly expenses – Higher expenses may reduce the amount you can borrow
    • Lender policies – Some lenders factor in bonuses, overtime, or self-employed income

    Since each lender has different criteria, speaking with a mortgage adviser can help you explore the best borrowing options for your situation.

    Buy-to-Let Mortgages

    For buy-to-let mortgages, lenders use a stress test that evaluates rental income alongside your personal income.

    Key requirements for buy-to-let lending:

    • Rental income – Must typically cover 125% to 145% of mortgage payments
    • Interest rate stress test – Ensures affordability even if interest rates rise

    If you’re considering a buy-to-let investment, a mortgage adviser can help you navigate lender requirements and find the best deal for your investment strategy.

    Next Steps

    Every lender assesses affordability differently, so it’s essential to get personalised advice. Contact us today for a tailored mortgage assessment and expert guidance.