Unlike a standard mortgage that you repay monthly, a bridging loan is designed to be repaid in one lump sum at the end of your term (usually 12 months). 

 

So you'll need an 'exit' to your bridge, which is most commonly selling another property (your old home, for example). 

 

They're often used to buy property while you wait for another property or asset to sell - bridging the gap in your funding - and are repaid when your sale completes. They're also secured against property - either one you're buying, one you currently own, or both.

 

Because bridging loans are secured against your existing property or assets, interest rates are much cheaper than what you’d expect to pay for an unsecured loan, and you can borrow a lot more.

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Generally, you can borrow as much as you want as long as you have a verifiable way to pay it back within 12 months. You can also get 24 month or even 36 month loans depending on your situation and the lender.

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In addition, the interest you pay on a bridging loan is rolled up into the total value of your loan instead of being charged monthly.

 

This means that you don’t have to worry about making monthly interest (or capital) repayments during the term of your loan, and you can protect your cash flow for your relocation or living costs.

Once your property or other asset has been sold, you can then pay off your interest comfortably with the proceeds of your transaction.