Downsizing bridging loan
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Written by:
Simon Glass
Senior Mortgage Operations Manager
Last Updated:
24.07.2025
Written by:
Simon Glass
Senior Mortgage Operations Manager
Last Updated:
24.07.2025
Bridging loans for downsizing: Simplifying your move
Downsizing your home can be an exciting opportunity to simplify your lifestyle and free up equity for future needs. However, the process can be financially challenging, especially if the timing of selling your current home and purchasing a new one doesn’t align. This is where a bridging loan for downsizing can help.
Why use a bridging loan for downsizing?
With most house purchases, timing is often the biggest hurdle. When downsizing you are likely to be at the end of the chain so could be in a scenario where you are waiting for the rest of the chain and under pressure to complete on your new perfect home. A bridging loan lets you secure your new home while giving you the breathing space to sell your existing one.
Common scenarios:
- Avoiding property chain delays: keep your downsizing plans on track even if there’s a delay in selling your home
- Securing a new home quickly: take advantage of a great opportunity in the property market
- Freeing up equity: use the equity tied up in your current home to fund your move before you are ready to put it up for sale
How do bridging loans work?
- Loan approval: The lender evaluates the value of your current home and new property to determine the loan-to-value (LTV) ratio
- Securing funds: once approved, you’ll receive the funds to purchase your new property
- Repayment strategy: the loan is typically repaid when you sell your current home or refinance to a standard mortgage
Example:
You’re downsizing from a £500,000 house to a £300,000 home. If your current home hasn’t sold, a bridging loan can cover the £300,000 purchase price, allowing you to move forward. Once your £500,000 home sells, the loan is repaid, and you keep the remaining equity.
Costs and considerations
While bridging loans offer invaluable flexibility, it’s essential to understand the associated costs:
- Interest roll up: lenders will allow interest to be rolled up to elevate the pressure of having an additional payment to make during the process
- Fees: valuation fee, arrangement fees, broker fee, potential exit fee, and legal costs
- Exit strategy: lenders require a clear plan for repaying the loan, such as the sale of your current property
Is a bridging loan right for you?
A bridging loan for downsizing could be the perfect solution if you:
- Want to act quickly on a new property purchase
- Are confident in the saleability of your current home
- Avoid the tress of losing your dream property and having to start the search again
- Need short-term financing without the constraints of traditional loans
Why choose Ascot Mortgages for your bridging loan?
At Ascot Mortgages, we specialise in helping clients navigate the complexities of bridging finance. Our team ensures you find a loan tailored to your downsizing needs, offering competitive rates and expert advice.
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Legal
Ascot Mortgages authorised and regulated by the Financial Conduct Authority and can be found on the FCA register (www.fca.org.uk) under reference 776062. The FCA do not regulate some forms of mortgages. The guidance and advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. There may be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate it will be £599 per mortgage account. Ascot Mortgages Ltd give you the option to pay a non-refundable fee of £1299 payable with the application. If this option is taken, Ascot Mortgages Ltd will refund any procuration fee received by the lender.
Ascot Mortgages Limited is registered in England and Wales and have their registered office at 8 Webster Court, Westbrook, Warrington, WA5 8WD. The company’s registration number is 06764971.
We are a credit broker, not a lender. We work with the whole of the lending market. Typically; we will receive commission that will vary depending on the lender, product, or other permissible factors. The nature any commissions model will be confirmed to you before you proceed.
ICO Registration number is Z1842187
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON ITtypically; we will receive commission
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