A bridging loan is a brilliant facility for this scenario as it quite literally 'bridges the gap', providing you with the funds you need to complete the purchase of the new property. Once the sale of the other property has been finalised, you can then use the proceeds of the sale to repay the bridge.

What is a bridging loan and how does it work?

A bridging loan works by giving you the money to proceed with a purchase while you free up money from other assets / investments or secure a long-term finance plan, such as a buy-to-let mortgage. They're a handy way to access short-term cash injection, while you put a more sustainable plan in place or liquidise assets.

How much deposit do I need for a bridging loan?

between 25% to 40%

Every Bridging Lender will set out their maximums for deposit or equity in the asset being used as security this typically ranges between 25% to 40%. In most cases, the applicants will choose to have the fees deducted from this figure and often the interest payments upfront too.

How much can I borrow as a bridging loan?

There are no upper limits on the amount of money you can borrow through bridging. The cap on your borrowing will be set by your situation and the lender involved. In some cases, very experienced developers are able to borrow 100% of their development costs as a bridging loan.