Why Choose Ascot Mortgages
Written by:
Phil Greenwood
Ascot Bridging Expert
Last Updated:
20.06.2025
A bridging loan is a short-term financial solution designed to cover immediate funding needs while awaiting long-term financing or the sale of an asset. Typically used for periods ranging from a few weeks to 24 months, these loans are tailored for quick access to funds, often within days.
Bridging loans are popular among property investors, homebuyers, and developers who need to secure opportunities or resolve cash flow issues quickly. They are commonly used for downsizing in retirement, buying properties at auction, the purchase and renovation of properties for ‘flipping’, and prevention of a breakdown of a property chain breakdown.
At a glance, the main advantages of a bridging loan are:
There are two different types of bridging loans. These are open bridging loans and closed bridging loans.
An open bridging loan has no specific date by which it must be repaid. However, the majority of lenders would expect you to pay off this loan within 12 months. Some lenders may offer an extended repayment period.
On the other hand, a closed bridging loan means you will have a fixed date by which you need to repay your loan. In most cases, this date will be determined by when you know you will have the funds available to pay it back, such as when the sale of your house has successfully gone through.
Generally speaking, a closed bridge loan is often cheaper than an open bridge loan because there is less flexibility in terms of repayment.
If you decide to take out a bridging loan, your lender will place a ‘charge’ against your property. If you fail to repay your bridging loan, this means that the lender can take the repayment from the property sale.
If you do not have any other loans tied up in your property, this is considered to be a first charge bridging loan. This may be the case if you own the property outright. Should you be unable to repay the loan, and the property is then sold to cover the debt, the bridging loan lender will then receive the repayment first.
If you have one or multiple loans against your property, like a mortgage, this is considered to be a second charge bridging loan. This means that if you fail to repay your bridging loan and the property is sold to cover the debt, the mortgage provider will be repaid first and the bridging loan lender will receive its repayment afterward.
Bridging loans are suitable for individuals or businesses in various situations and can mean the difference in not losing out on your dream home or investment opportunity. It allows you to act and move quickly in the property market and decrease the risk of losing out to cash buyers. Typical scenarios when bridging finance is used:
While we generally deal with bridging loans up to £25m, there are lenders willing to lend up to £100m, with the loan-to-value ratio typically capped at 80% of the properties value being used as security. Each lender has its own policy and criteria in relation to maximum loans and loan to values so it’s vital to seek professional advice. An experienced adviser can assess your individual circumstances and present the best available options.
There are many factors to take into account when it comes to deciding if a bridging loan is right for you.
Pros
Cons
Each lender has its own set of lending criteria a borrower must meet to be considered for a loan. Some lenders focus on the lower value and lower risk type lending while there are others that specialise in niche areas of the market. There are two main elements to consider before applying:
With the right help, the process of applying for a bridging loan can be straightforward. It typically involves the steps outlined below:
Before applying for a bridging loan, it’s a good idea to consult an expert. Here at Ascot Mortgages, we can give you advice that’s tailored to your unique circumstances. This can be done by phone or in person.
During this initial consultation, we’ll discuss:
We will assess your situation and recommend suitable lenders based on your circumstances and goals.
After the bridging loan broker has a clear understanding of what you want the bridging loan for, and is confident that you have a realistic plan to repay the loan, the advisor will approach lenders they believe are likely to approve your loan application.
If successful, your Agreement in Principle should be accepted within 24 hours or less. The initial offer will be conditional depending on a valuation of the property used as security and the legal work that needs to be done. The lender will also look into your financial situation. The borrower will need to provide a number of documents that need to be checked before a formal offer is provided by the lender.
Next, you’ll need to complete a formal application form and provide supporting documents, such as:
The property used as security for the loan must be valued to make sure that it will cover the loan. This is normally conducted by a professional valuer, who will write a report about the condition of the property and its value. If the property has had a recent survey, the lender may accept this instead of appointing a valuer. The borrower normally pays a fee for the valuation.
If you are an individual applicant, the property used as security should be your main residence. Landlords can use other rented property they own as security, and a business can use its work premises as security if it owns the building. Some lenders will consider other company assets as security, such as stock, the value of invoices due to be paid, or equity in the company.
After all the documents have been checked and the valuation completed, a formal offer letter will be sent. The offer letter usually comes with a legal pack sent to your solicitor to action. Most lenders will allow you to appoint your own solicitor, but some may have a specified panel of solicitors to choose from. If you choose your own solicitor, make sure it is one who understands bridging loans and the short timelines required for the legal work.
After the formal letter has been received and all legal work has been completed, the loan money will be released. This is usually transferred to the borrower’s solicitor, who will transfer the money to complete the property purchase. If a company is using the loan for short-term cash purposes, it will be put into the company’s bank account.
One advantage of bridging loans is that they can be arranged quickly. Traditional mortgages take about eight to twelve weeks to arrange. Depending on the complexity of the bridging loan, the time between starting the application process and having funds available can be a matter of days. However, it can take longer, depending on the lender and your specific circumstances.
It is possible for an application to be treated as a priority. Provided that all the documents to support the application are ready, and the solicitor can work quickly, a priority application can be completed within 48 hours.
Bridging loans can be applied and set up for private individuals, Limited Companies, Partnerships and Offshore Companies. If you have any questions about your eligibility or feel your circumstances are complex, you can speak to one of our advisers.
You can expect to pay various set-up fees when you take out a bridging loan. These include:
Arrangement fees – this cost can include lender arrangement fees, which are usually a percentage of the loan amount
Valuation fees – to be approved for a bridging loan, it’s likely you’ll need a valuation on the property
Legal fees – you will need legal representation, as will your lender, to cover the cost of drawing up legal documents
Exit fees – your lender may charge an exit fee when the loan comes to an end.
It’s important that you find the right bridging loan at the right rate. Keep the following points in mind when you’re looking to take out this type of loan.
To find the best bridging loan deal for you, you will need to be clear on what it is that you need from your loan in terms of how much you would like to borrow and for how long. It’s important to note that bridging loans are expensive, so the longer the term, the more it will cost you.
It’s also a good idea to fully understand your situation. This means knowing:
To ensure you take out a bridging loan that ticks all the right boxes, it’s important to do your research first. There are lots of loan types available, so it can be useful to compare your different borrowing options.
You might find it helpful to consider the following when it comes to choosing your bridging loan:
At Ascot Mortgages, our experts arrange and secure bridging finance every day. We have arranged finance for everything from small refurbishments to quick refurbishments to multi-million-pound developments. We can meet tight deadlines or find finance for complex situations.
Whatever your situation, contact us today. Call our team on 01925 711558 or book an appointment to speak to one of our professional advisers at a time that suits you.
Get things moving, apply for a bridging loan.
Free unbiased bridging loan advice is just a phone call away.
Bridging loans typically range from £25,000 to £25 million. The amount you can borrow will be determined by your specific requirements, the value of the property being used as security, your credit history and your current financial situation.
In most cases, the lender will allow you to borrow up to 75% of the property value, but this will depend on your personal finances.
Rates vary based on the property type, exit strategy, loan to value, and lender. Rates are typically between 0.5% and 2% per month.
Bridging loan interest rates can either be fixed or variable. Fixed interest rates mean that you will know exactly how much you will be charged, and your monthly repayments are guaranteed to remain the same for the duration of the loan. Meanwhile, a bridging loan with a variable interest rate means the amount you pay can change.
Most lenders require equity in the form of property as security, but specific deposit requirements depend on the lender.
Bridging loans typically last between 1 and 18 months, with flexible repayment terms.
Yes! Bridging finance often focuses on the value of the security property rather than your credit score. However, it is important to note that you will be considered ‘higher risk’, so therefore the cost of your loan will likely be higher too.
It’s a good idea to check your personal credit score before you apply for a bridging loan. This will enable you to get an idea of what your current credit history looks like.
A bridging loan can take anywhere from a few days to several weeks to complete. This is due to the fact that it is a secured loan which, if you’re using a property as collateral, will require a valuation and credit checks.
A bridging loan could be the right decision for you if you need a short-term loan for a large sum of money that you will be able to repay quickly. To be eligible for a bridging loan, you will need to be aged 18 or over, a UK resident and have a valuable asset to use as collateral, such as a property. Whether a bridging loan is right for you or not will also depend on your personal financial situation and your borrowing requirements.
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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. We may receive commissions 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.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT
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