How Bridging Loans Work in the UK: The Complete 2026 Guide

Everything you need to know about bridging loans: what they are, how they work, costs, types, process timeline, risks, exit strategies, and real examples. The most comprehensive guide on the internet.

Interest Rates

0.45-0.80%

monthly

LTV Range

50-75%

typical

Completion

5-7 Days

via broker

Loan Term

3-24 Months

typical

What is a Bridging Loan?

Simple Definition

A bridging loan is short-term financing (3-24 months) secured against property. It 'bridges' the gap between needing funds immediately and your long-term financing solution (sale, refinance, development completion).

Typical scenario: You're buying at auction requiring completion in 28 days. Your mortgage offer takes 8 weeks. A bridging loan provides funds within 5-7 days, bridging the timing gap.

Key Characteristics

Short-term: 3-24 months (not 25 years like mortgages)
Higher interest: 0.45-0.80% monthly (5-10% annually)
Secured: Against property value (LTV 50-75%)
Fast: DIP 59 mins to 4 hours, completion 5-7 days
Flexible: Open (no fixed end) or closed (fixed term)

Bridging Loan vs Mortgage: Key Differences

Aspect	Bridging Loan	Mortgage
Loan Term	3-24 months (short-term)	25 years (long-term)
Interest Rate	0.45-0.80% monthly (5-10% annual)	3-5% annual (0.25-0.42% monthly)
Completion Speed	5-7 days typical	8-12 weeks typical
Focus	Property value (security)	Affordability (income check)
Regulation	Mostly unregulated (flexible)	FCA-regulated (consumer protection)
Monthly Payment	Interest only (or deferred)	Capital + interest repayment
Repayment	Lump sum at end (exit)	Monthly instalments over 25 years

How Bridging Loans Work: 6-Step Process

Initial Consultation & Case Appraisal

You contact us (or a lender) and discuss your situation: property, loan amount needed, exit strategy, and timeline.

What Happens:

Describe your situation and what you need the bridging loan for
Provide details of the property: location, value, type
Discuss your exit strategy: sale, refinance, development completion
Confirm your timeline and any urgent deadlines
Clarify any complex circumstances (overseas investor, development exit, etc.)

Timeline

30-60 minutes

Outcome

Clear understanding of your requirements and initial lender recommendations

Decision in Principle (DIP)

The lender or broker provides a formal DIP showing the loan amount, rates, fees, and terms they're willing to offer you.

What Happens:

Lender reviews your case against their lending criteria
For brokers: we obtain DIPs from multiple lenders
DIP confirms: loan amount available, interest rate, arrangement fee, exit fee, timeline
DIP is not a binding commitment but shows formal interest
You can accept or negotiate the terms shown in the DIP

Timeline

59 minutes to 4 hours (broker) or 24-48 hours (direct)

Outcome

Formal offer showing what you can borrow and at what cost

Full Application & Documentation

You submit a formal application with all required documents for underwriting review.

What Happens:

Complete full application form (provided by lender or broker)
Provide ID and proof of address
Bank statements (typically last 3-6 months)
Details of the property and its valuation
Details of your exit strategy and how you'll repay the loan
Land Registry title deeds or property information
Details of any other security (other properties if cross-collateralized)

Timeline

2-3 days to prepare and submit

Outcome

Complete application submitted to underwriting team

Underwriting & Conditions

The lender's underwriting team reviews your application in detail, assesses risk, and issues a formal offer with conditions.

What Happens:

Lender reviews all documentation and verifies information
Property valuation is arranged (usually your cost)
Credit check and affordability assessment completed
Underwriter assesses risk and loan-to-value ratio
Formal offer issued with specific terms and any conditions
Conditions typically include: satisfactory valuation, legal checks, further ID verification

Timeline

3-5 days typical

Outcome

Formal Mortgage Offer issued with specific terms and conditions

Property Valuation & Legal Work

Property is independently valued and legal work begins on title checks and documentation.

What Happens:

Independent surveyor values the property (lender requirement)
Valuation confirms property worth covers the loan (within LTV)
Your solicitor begins title checks and legal work
Solicitor reviews mortgage offer terms and conditions
Solicitor searches Land Registry and carries out property searches
Any issues from searches are resolved before completion
You may be asked to provide further information or documentation

Timeline

3-7 days typical

Outcome

Valuation complete, legal work progressing, ready for completion

Final Approval & Funds Release

All conditions satisfied, lender releases funds and you complete the transaction.

What Happens:

Lender confirms all conditions have been satisfied
Lender approves funds release
Your solicitor confirms ready for completion
Completion takes place: funds transferred, mortgage registered
You receive the loan funds (minus fees and charges)
For house purchase: seller receives their proceeds
For development: funds available for your intended purpose

Timeline

1 day (completion day)

Outcome

Funds in your account, transaction complete, loan terms commence

Total Timeline From Start to Completion

Using a broker like FastBridge Funding: 10-14 days typical (as quick as 7 days for straightforward cases, up to 21 days for complex scenarios). Going direct to a lender: 14-21 days typical.

Types of Bridging Loans

By Duration

Open Bridging

Loan with no fixed end date - you repay when you're ready (usually when you sell your property)

Best For:

Property sales where you don't know exact completion date

Typical Term:

6-24 months

Rate Impact:

Standard rates apply

Closed Bridging

Loan with a fixed end date (e.g., 6 months) when you must repay

Best For:

Auctions, chain breaks, development projects with known timeline

Typical Term:

3-6 months typically

Rate Impact:

Better rates due to fixed timeline certainty

By Security

First Charge Bridging

Loan secured against the property as first legal charge (lender has first claim)

Best For:

Most common scenario - only other borrowings are registered after

Typical Term:

Most loans

Rate Impact:

Better rates (lower risk for lender)

Second Charge Bridging

Loan secured as second legal charge (another lender has first charge)

Best For:

Cases where existing mortgage or loan can't be discharged

Typical Term:

Less common but possible

Rate Impact:

Higher rates (higher risk for second-charge lender)

By Regulation

Regulated Bridging Loans

FCA-regulated loans for owner-occupiers buying their main residence

Best For:

Homeowners buying a home to live in

Typical Term:

Owner-occupiers

Rate Impact:

May have slightly different terms due to regulation

Unregulated Bridging Loans

Unregulated loans for investment property, developers, businesses

Best For:

Investors, developers, businesses (majority of cases)

Typical Term:

Investment properties

Rate Impact:

Standard market rates, more flexible terms

Bridging Loan Costs: Complete Breakdown

Cost Type	Range	Typical	How Calculated	Example (£200k)
Interest Rate	0.40% - 1.50% per month	0.45% - 0.80% per month	(Loan Amount × Monthly Rate × Number of Months)	£200,000 × 0.50% × 6 months = £6,000
Arrangement Fee	1.0% - 2.0% of loan amount	1.0% - 1.5%	Loan Amount × 1% to 2%	£200,000 × 1.5% = £3,000
Broker Fee	0.5% - 2.0% of loan amount	1.0% - 1.5%	Loan Amount × 1% to 2%	£200,000 × 1% = £2,000
Exit Fee	0% - 2.0% of loan amount	0% - 1.0%	Loan Amount × 0% to 2%	£200,000 × 0% to 1% = £0-2,000
Valuation Fee	£300 - £1,500	£400 - £800	Fixed fee based on property value	£500 for residential property
Legal Fees	£800 - £2,500	£1,000 - £1,500	Fixed fee from your solicitor	£1,200 for straightforward residential case
Insurance (Optional)	£300 - £1,000	£500	One-off premium	£500 for payment protection insurance

6-Month Loan Example (£200,000 at 0.50%)

Interest (0.50% × 6 months)£6,000

Arrangement fee (1%)£2,000

Broker fee (1%)£2,000

Valuation fee£500

Legal fees£1,200

Total Cost£11,700

12-Month Loan Example (£200,000 at 0.50%)

Interest (0.50% × 12 months)£12,000

Arrangement fee (1%)£2,000

Broker fee (1%)£2,000

Valuation fee£500

Legal fees£1,200

Total Cost£17,700

How to Reduce Bridging Costs

Keep bridge term short: Every month costs 0.50% of loan amount (£200k loan = £1,000/month). 6 months costs £6,000, 12 months costs £12,000.
Lower LTV = better rates: 50% LTV gets 0.45%, 75% LTV gets 0.70%. Lower LTV saves £200-300/month.
Use a broker: Better rates through relationships often offset broker fee (1-2%). Direct lender may charge 0.10-0.30% more.
Closed bridging: Fixed end date (e.g., auction completion) gets better rates than open bridging (sale unknown when).
Strong property security: Standard residential gets better rates than commercial or specialist properties.

Understanding Loan-to-Value (LTV)

What is LTV?

LTV (Loan-to-Value) is the loan amount as a percentage of the property's value. Example: £140,000 loan on a £200,000 property = 70% LTV.

Why LTV matters: It determines how much you can borrow and what interest rate you pay. Lower LTV = more equity = lower risk for lender = lower interest rate for you.

LTV Range	Risk Profile	Interest Rate	Example (£200k property)	Best For
Up to 50%	Very conservative	0.40% - 0.50% monthly	Borrow £100k on £200k property	Maximum LTV available, best rates, strongest position with lender
50-60%	Conservative to moderate	0.45% - 0.60% monthly	Borrow £120k on £200k property	Good position, competitive rates, most investment cases
60-70%	Moderate	0.50% - 0.70% monthly	Borrow £140k on £200k property	Common for auctions and chain breaks, most lenders offer this
70-75%	Higher (requires good case)	0.60% - 0.80% monthly	Borrow £150k on £200k property	Premium LTV, fewer lenders available, better case required
75-80%+	Very high (rare, specialist only)	0.80% - 1.50% monthly	Borrow £160k+ on £200k property	Specialist lenders only, strong exit strategy required, higher cost

Why Lower LTV Gets Better Rates

Lower risk for lender
More equity = larger safety buffer if property value drops
More recovery room
If you can't repay and lender sells property, they recover loan easily
Less default risk
You have more equity to protect, less likely to walk away

Interest Rate Impact by LTV

Same £200,000 loan, same property type, different LTVs:

50% LTV (£100k on £200k)0.45% monthly = £900/month
60% LTV (£120k on £200k)0.50% monthly = £1,000/month
70% LTV (£140k on £200k)0.60% monthly = £1,200/month
75% LTV (£150k on £200k)0.75% monthly = £1,500/month

Difference: 0.45% to 0.75% = £600/month extra cost (or £6,000 for 10 months)

8 Common Use Cases for Bridging Loans

1. Auction Purchase

Buying property at auction with fast completion deadline (typically 28 days)

Why Bridge:

Auctions require immediate commitment and fast funds. Can't wait for mortgage underwriting (3-8 weeks).

Timeline:

DIP within 24 hours, completion 5-7 days, ready for auction completion

Typical Structure:

Open or closed bridging, 3-6 month term, property sale as exit

Costs:

Standard rates 0.50-0.70% monthly, 1-2% fees

2. Chain Break/Gazumped

Need funds urgently because your purchase fell through or you're stuck in a chain

Why Bridge:

Bridges the gap between selling current property and buying new one

Timeline:

DIP same day, fast completion 5-7 days, typically 3-6 months

Typical Structure:

Closed bridging, first charge, property sale as exit

Costs:

Standard rates 0.50-0.70% monthly, 1.5-2% fees

3. Refurbishment/Renovation Project

Buying property requiring significant work to increase value

Why Bridge:

Funds purchase and renovation work, repay from refinanced property or sale

Timeline:

DIP 24-48 hours, completion 7-10 days, 6-12 month term typical

Typical Structure:

Rolled-up interest common (save cashflow for works), development lenders

Costs:

Rates 0.50-0.80% monthly (rolled-up), exit: refinance or sale

4. Development Project

Acquiring land and developing residential or commercial property

Why Bridge:

Short-term funding while property is developed and sold

Timeline:

DIP 48 hours, completion 10-14 days, 12-24 month term typical

Typical Structure:

Rolled-up interest, development exit (selling off-plan or completed units)

Costs:

Rates 0.55-1.0% monthly, development lenders specialize in this

5. Portfolio Expansion

Buying additional investment properties quickly while current properties sell

Why Bridge:

Bridges gap between buying new property and selling old ones

Timeline:

DIP 24 hours, completion 5-7 days, 6-12 month term

Typical Structure:

Cross-collateralization across portfolio, strong exit strategy

Costs:

Rates 0.50-0.75% monthly, portfolio lenders understand scenario

6. Buying Uninhabitable Property

Property is unmortgageable (fire damage, subsidence, etc.) requiring bridge to buy and fix

Why Bridge:

Mainstream lenders won't mortgage uninhabitable properties

Timeline:

DIP 24-48 hours, completion 7-10 days, 6-12 months

Typical Structure:

Specialist lenders, rolled-up interest, refinance as exit

Costs:

Higher rates 0.70-1.20% monthly due to risk, specialist lenders

7. Overseas Investor

Foreign investor buying UK property without being resident

Why Bridge:

Can't easily get UK mortgage as overseas investor

Timeline:

DIP 48 hours, completion 10-14 days, slightly slower due to verification

Typical Structure:

Specialist lenders experienced with overseas borrowers

Costs:

Rates 0.55-0.85% monthly, possibly slightly higher than UK investors

8. Commercial Property Purchase

Buying commercial building, office, retail, or mixed-use property

Why Bridge:

Commercial financing is slower and more rigid than bridging

Timeline:

DIP 24-48 hours, completion 7-14 days, 6-12 months typical

Typical Structure:

Commercial bridging specialists, strong exit strategy required

Costs:

Rates 0.60-1.0% monthly, commercial property assessment adds time

6 Exit Strategies for Bridging Loans

Sale of Property

Strategy 1

Most common exit - you repay the bridge from proceeds of selling the property

Timing & Requirements:

Typically 3-6 months, can extend to 12-24 months

Market to sale often takes longer than expected

Risk & Mitigation:

Risk: Market downturn means lower sale price, can't cover loan + interest

Mitigation: Buffer funds, backup plan to extend or refinance if sale delayed

Refinance to Mortgage

Strategy 2

Repay bridge by obtaining a standard mortgage (residential or buy-to-let)

Timing & Requirements:

Property must be mortgageable (habitable, standard use)

Good credit, sufficient income/resources to qualify for mortgage

Risk & Mitigation:

Risk: Mortgage rates may have increased, or you may not qualify for mortgage

Mitigation: Get mortgage agreement in principle before taking bridge

Sale After Development/Refurbishment

Strategy 3

Complete development work or renovation, then sell at higher value

Timing & Requirements:

Depends on scope of work, typically 6-18 months

Project must be completable within loan term, realistic value increase

Risk & Mitigation:

Risk: Renovation costs overrun, project delays, market conditions change

Mitigation: Contingency fund (10-20% of budget), realistic timelines, expert advice

Portfolio Refinance

Strategy 4

Refinance multiple properties together to repay bridge, common for investors

Timing & Requirements:

Properties must be rentable and generate sufficient income

Strong rental income, good credit, sufficient number of properties

Risk & Mitigation:

Risk: Fewer lenders offer portfolio mortgages, tighter lending criteria

Mitigation: Specialist mortgage broker familiar with portfolio lending

Loan Extension

Strategy 5

Extend the bridge loan if your primary exit strategy is delayed

Timing & Requirements:

Extension costs additional interest (typically 1-3 months worth)

Lender agreement (usually granted if you're performing well)

Risk & Mitigation:

Risk: Additional cost, compounds interest charges, delays resolution

Mitigation: Plan for potential extensions, ensure you can cover extended costs

Sale of Property at Auction

Strategy 6

For properties difficult to sell on open market (specialist, investment, etc.)

Timing & Requirements:

Faster than private sale (6-8 weeks typically)

Property suitable for auction, realistic reserve price

Risk & Mitigation:

Risk: May not meet reserve, lower auction price than private sale

Mitigation: Auction specialist valuation, realistic reserve, fallback plan

Critical: Have a Clear Exit Strategy Before Taking a Bridge

Most bridging loan issues arise from unclear or over-optimistic exit strategies. Before committing to a bridge, you must:

Have a realistic, detailed exit plan (not a vague hope)
Get professional advice on exit feasibility (broker, surveyor, accountant)
Have a backup plan if your primary exit doesn't work
Allow buffer time and money for delays or cost overruns
Ensure you can extend if your timeline is optimistic

Risks & Considerations of Bridging Loans

Cost of Borrowing

Bridging loans cost significantly more than mortgages

Impact:

Interest 0.5-1% monthly (6-12% annually) vs mortgage at 4-5% annual

Timeline Concern:

Matters most for longer-term bridges - 12 months costs double

How to Mitigate:

Keep bridge term as short as possible, have realistic exit timeline

Exit Strategy Failure

What if your property doesn't sell or refinance isn't approved?

Impact:

You cannot repay the loan on time, breach loan terms, face lender action

Timeline Concern:

Critical when bridge term expires - must have funds to repay

How to Mitigate:

Have backup exit plan, don't rely on single strategy, keep buffer funds

Market Downturn

Property values drop, reducing equity and sale proceeds

Impact:

Sale price may not cover loan + interest, creating shortfall

Timeline Concern:

Risk increases during longer bridge terms (12+ months)

How to Mitigate:

Conservative LTV (borrow less than you think), maintain equity buffer

Project Overruns

Development or renovation project takes longer than planned

Impact:

Bridge term extends, additional interest accrues, costs increase

Timeline Concern:

Common in development/refurbishment bridges

How to Mitigate:

10-20% time contingency, 15-20% budget contingency, realistic planning

Rising Interest Rates

For variable-rate bridges, rates could increase during loan term

Impact:

Monthly costs increase, refinance terms may worsen

Timeline Concern:

Risk increases in longer bridges (12+ months)

How to Mitigate:

Fix rates if possible, budget for potential increases, shorter terms

Cashflow Pressure

Monthly interest payments strain your cashflow, especially development stage

Impact:

Can't pay monthly interest, breach loan terms, relationship with lender suffers

Timeline Concern:

Monthly throughout loan term if not rolled-up

How to Mitigate:

Rolled-up interest for projects, monthly serviced for income-producing properties

Regulatory Changes

FCA rules change or lending regulations tighten during your loan

Impact:

May affect terms available or require refinancing

Timeline Concern:

Longer-term bridges more exposed

How to Mitigate:

Work with experienced brokers and lenders who monitor regulations

Personal Circumstances Change

Job loss, health issues, business downturn affecting ability to repay

Impact:

Can't service loan or cover exit strategy costs

Timeline Concern:

Risk throughout loan term

How to Mitigate:

Contingency funds, insurance (optional), realistic risk assessment

Bottom Line on Risks

Bridging loans are appropriate for specific scenarios with clear exit strategies. They are NOT appropriate if:

You don't have a clear, realistic exit strategy
You're relying on speculative market appreciation to exit
You can't afford the interest costs if timeline extends
You're overleveraged beyond comfortable LTV
You haven't discussed with a professional advisor

Regulated vs Unregulated Bridging Loans

Aspect	Regulated Bridging	Unregulated Bridging
Definition	FCA-regulated loan for buying your main residence (owner-occupier)	Loans for investment property, development, business, commercial use
Borrower Type	Homeowner buying house to live in permanently	Investors, developers, businesses, buy-to-let investors
Property Type	Residential property (single home)	Any property type: investment, commercial, development land, etc.
Affordability Rules	Lender must assess affordability in detail	Lender focuses on security (property value), not affordability
Consumer Protection	Full FCA consumer protection rules apply	Limited consumer protection - more flexible but less protected
Cooling-Off Period	14 days statutory cooling-off period	No statutory cooling-off period
Interest Rate Flexibility	More restricted, rates must be fair and clearly disclosed	More flexibility, rates negotiable based on risk
Lender Panel Size	Fewer lenders (must be FCA-regulated)	Many more lenders (specialist non-bank lenders)
Speed of Process	Slower (affordability checks take time)	Faster (DIP often within 59 minutes, completion 5-7 days)
Typical Interest Rate	Similar to unregulated (0.50-0.80% monthly)	Similar to regulated (0.50-0.80% monthly) plus specialist access

When Regulated Applies

Regulated bridging loans only apply to specific scenarios:

Owner-occupier: You are buying a property to live in as your main home
Residential only: Single residential dwelling, not investment property
Consumer protection needed: You need FCA consumer protections

When Unregulated Applies (90% of Cases)

Unregulated bridging applies to the vast majority of cases:

Investment property: Buy-to-let or rental property investment
Development: Development projects or refurbishment
Commercial: Commercial property or business use
Multiple properties: Portfolio expansion or refinancing

Frequently Asked Questions

Get answers to the most common questions about bridging loans

A bridging loan is short-term financing (3-24 months) at higher interest rates (0.5-1.5% monthly) secured by property. Unlike mortgages (long-term, 25 years, 3-5% annual rates), bridging is designed for temporary situations: buying at auction (fast completion), chain breaks, development, or refurbishment. Mortgages are regulated consumer products requiring affordability checks. Most bridging loans are unregulated and focus on security (property value) rather than affordability.

You can typically borrow 60-75% of the property's value (the LTV - Loan-to-Value ratio). For example, on a £200,000 property: 60% LTV = £120,000 borrow, 70% LTV = £140,000 borrow, 75% LTV = £150,000 borrow. Some specialist lenders offer up to 80% LTV for strong cases. The higher the LTV, the higher the interest rate charged (risk premium). Lower LTV (50-60%) gets the best rates.

Bridging loan interest typically ranges 0.45-0.80% per month (5-10% annually). For a £200,000 loan at 0.50% monthly for 6 months: you pay £6,000 in interest. For 12 months at 0.50%: you pay £12,000 in interest (if monthly serviced) or £12,650 (if rolled-up/compounded). Rates depend on: loan-to-value ratio, property type, borrower profile, market conditions, and your exit strategy certainty.

Total costs include: interest (0.5-1% monthly), arrangement fee (1-2%), broker fee if using broker (1-1.5%), valuation fee (£300-800), legal fees (£800-1,500), and exit fee (0-2%). For example, £200,000 loan for 6 months: interest £6,000, arrangement £3,000, broker £2,000, valuation £500, legal £1,200, total approximately £12,700. Some lenders waive exit fees, reducing total cost.

Using a broker like FastBridge: DIP (Decision in Principle) within 59 minutes to 4 hours, completion typically 5-7 days, total 10-14 days from initial contact. Going direct to a lender: DIP takes 24-48 hours, completion 7-14 days, total 14-21 days. For urgent auctions with pre-approval or strong cases, completion in as little as 3-5 days is possible. Speed depends on: application completeness, document quality, property straightforwardness, and how quickly you respond to lender requests.

LTV is the loan amount as a percentage of property value. Example: £140,000 loan on a £200,000 property = 70% LTV. LTV matters because: (1) Higher LTV = higher risk for lender = higher interest rate charged to you. 50% LTV might get 0.45% monthly, while 75% LTV might get 0.70% monthly. (2) LTV limits how much you can borrow. (3) Strong exit strategy allows higher LTV. Conservative LTV (50-60%) gives best rates.

Open bridging: no fixed end date, you repay when ready (usually when you sell). Best for property sales where exact completion unknown. Closed bridging: fixed end date (e.g., 6 months), you must repay by that date. Best for auctions, chain breaks, or development with known timeline. Closed bridging typically gets better interest rates because lender knows exactly when they're getting repaid. Open bridging is more flexible but costs slightly more.

Yes, most lenders allow extensions if you're performing well (paying interest on time, communicating). Extension typically costs additional interest (1-3 months worth) plus lender administration fee. Extension doesn't reset your exit timeline - you still need a clear plan to exit. Extensions are common in development/refurbishment projects that run longer than planned. Discuss extension terms upfront with your lender.

The 'best' exit depends on your situation: (1) Sale of property: simplest and most common, but market-dependent. (2) Refinance to mortgage: requires property be mortgageable and you qualify for mortgage. (3) Development sale: works if you're adding value through development/refurbishment. (4) Portfolio refinance: common for investors. Critical: have a clear, realistic exit strategy. Don't take a bridge relying on speculative profit or unproven market assumptions.

Use a broker if: you want to compare 100+ lenders quickly, need expert guidance for complex case, want DIP in under 4 hours, or have specialist requirements. Go direct if: you already know your ideal lender, want to save broker fee (though brokers often provide better rates offsetting fee), or have very straightforward case. For most people, brokers deliver better value: faster completion, better rates through relationships, expert guidance, and full application management.

It depends on the loan type: (1) Regulated bridging loan: for owner-occupiers buying their main residence - FCA-regulated with consumer protections. (2) Unregulated bridging loan: for investment property, development, commercial use - not FCA-regulated, more flexible terms. Most bridging loans (90%+) are unregulated because they're used for investment/development. Regulated bridging is slower due to affordability checks but offers more consumer protection.

Red flags: (1) Interest rates significantly below market (0.30%/month) - likely hidden fees. (2) Vague fee structure - should be clear upfront. (3) Rigid exit terms - good lenders offer flexibility. (4) No pre-approval process - suggests less serious lender. (5) Pushy sales tactics or pressure to commit quickly. (6) Lender won't explain terms clearly. (7) No professional legal review offered. Always: get quotes from multiple lenders, have a solicitor review terms, ask all questions upfront.

Yes, bridging loans are ideal for auctions. Timeline: auction online/in-person, you win with your bid, you need funds within 28 days (auction completion). Bridging timeline: DIP same day or next day, completion in 5-7 days, funds ready for auction completion. This is the perfect use case for bridging - fast funds, clear exit (you must sell within 12 months anyway, or renovate and sell). Auction properties often get 10-30% discounts, making bridging interest worth it.

If you can't repay on the agreed exit date: (1) Discuss with lender immediately - don't avoid communication. (2) Request extension if performing well - usually granted with additional interest. (3) If extension denied, lender can take possession and sell property to recover loan. (4) You're liable for any shortfall between sale price and loan + interest + legal costs. Prevention: have backup exit plan, don't over-stretch with LTV, maintain buffer funds, be realistic about timeline, get professional advice on exit feasibility.

Monthly serviced: you pay interest each month (best total cost), requires cashflow. Rolled-up: interest accrues and paid at end (higher total due to compounding), improves monthly cashflow. Choose monthly if: you have steady income (rental property), want lowest total cost, working with traditional lenders. Choose rolled-up if: doing development/renovation (need all capital), uncertain monthly cashflow, confident of exit date. For example: £200k at 0.50% for 6 months = £6,000 (monthly) or £6,150 (rolled-up). The £150 difference is worth monthly cashflow flexibility for many projects.