When a Bridging Loan Is Used for a House Purchase

Bridging loans are commonly used when timing, property condition, or transaction structure prevents the use of a standard mortgage.

Typical scenarios include:

Buying before selling

Purchasing your next property without waiting for your current home to sell, then repaying the loan once the sale completes.

Breaking a property chain

Completing as a cash buyer to avoid delays or collapsed chains.

Buying at auction

Meeting short auction completion deadlines where mortgage finance would be too slow.

Purchasing a property that needs work

Funding the purchase of a property that is not yet mortgageable, with refinance once works are complete.

GPS Financial supports homeowners, landlords, and investors. Each loan is structured around the property, the risk profile, and a realistic exit strategy.

Key Features of Bridging Loans

• Short term finance, typically up to 12 months
• Fast decisions, with funds often released in a matter of days
• Borrowing commonly up to 75 percent loan to value
• Higher leverage possible with additional security
• Rolled up or retained interest options
• Flexible exits through sale or refinance
• Suitable for residential, mixed use, and commercial property

We arrange both regulated and unregulated bridging loans, ensuring each case is structured correctly based on property use and lender requirements.

How Much Does a Bridging Loan Cost?

Bridging loans focus on speed and flexibility rather than long term borrowing, which is reflected in the pricing.

Costs may include:

• Interest, usually charged monthly or rolled up
• Arrangement fees, often around 1 percent to 2 percent of the loan
• Valuation and legal fees, depending on the property and lender

Example
On a £400,000 purchase with a £300,000 loan:

• Arrangement fee at 2 percent: £6,000
• Interest at 0.5 percent per month over six months: £9,000
• Approximate total cost: £15,000

While bridging finance costs more than a mortgage, it can prevent chain failures, secure discounted purchases, or avoid losing a property altogether.

Example: Bridging Loan for a House Purchase

A client needed to complete a house purchase before their existing property had sold. The seller required certainty, and delays risked losing the property.

GPS Financial arranged a bridging loan to allow the client to complete as a cash buyer. The loan was agreed and completed within days, providing the certainty the seller required.

Once the client’s previous property sold, the bridging loan was repaid in full. The transaction completed smoothly without chain related pressure.

Is a Bridging Loan Right for You?

A bridging loan can help you move quickly, secure opportunities, and unlock capital tied up in property. However, because costs are higher than a mortgage, careful planning and expert advice are essential.

At GPS Financial, every case starts with the exit strategy. From day one, we structure the loan around how it will be repaid, ensuring clarity before you proceed.

We manage the process from start to finish, working with lenders, solicitors, and valuers so you can focus on securing the property.

Speak to GPS Financial

If you are considering a bridging loan for a house purchase, speak to the team at GPS Financial.

We will review the property, your timeline, and your exit strategy, then recommend a solution that supports a smooth and confident completion.

Call 029 2267 7707 or visit our Contact page to arrange a no obligation discussion