Bridging loans are perfect for securing finance when you need to fill a funding gap until traditional lending can be obtained, however, how much can you borrow on a bridging loan?
The biggest reason people in the UK apply for bridging loans is when a chain breaks. That’s when a series of connected property purchases and sales depend on the success of each transaction before and after it in a sequence.
According to latest figures from home buying company Quick Move Now, 4% of property sales in the first half of 2025 failed when chains broke. If you’re currently in a chain and someone pulls out and causes a break, what options do you have if you don’t want to lose your new property?
Bridging loans are a popular choice when this happens. It means keeping both your current home and the property you want to buy until the chain is reinstated. It’s a popular option in the UK. Figures show that 17% of bridging loans were taken out in the first quarter of 2025 because property chains broke.
How much bridging loan can you borrow?
When it comes to how much money you can borrow through a bridging loan, it all depends on your personal circumstances.
There are several details lenders will require. This includes the price of the property, how much you need to borrow, and your credit history.
Lending amounts are based on “loan to value” (LTV) This is the loan size against your property value.
Most cases are not income assessed, as the interest is rolled up and no monthly payments are required. Unless you have stated you would like to make monthly payments, then evidence of income will be required.
What do you need to know when applying for a bridging loan?
We’ll look at what to consider before using a bridging loan. It will also help you understand how to use our bridging loan calculator to help illustrate what you might be able to borrow.
Interest rates
A bridging loan is a short-term loan and that’s usually up to 12 months. As well as for helping when a chain breaks, they are often used to buy property that is going to be ‘flipped’ and sold quickly, so, they are different to long-term loans, such as mortgages. As they are not meant for long-term lending, the interest rates are higher than a mortgage.
Interest rates will also vary depending on the current financial situation therefore it’s worth contacting us for details for current rates. In the long run, you’ll pay back more than you borrow than you will with a mortgage so interest rates are key to understanding what you can afford and how much you will be allowed to borrow.
Loan to value
If you use a mortgage to buy a property you will have heard of Loan to Value (LTV) ratios. This equates to how much you are borrowing compared to the cost of the property.
So, if the property you are buying is worth £250,000 and your mortgage is £85,000, your LTV is 34%. That means your ‘equity’ (the percentage you own in basic terms) is 66%.
Mortgage lenders can often lend up to 90% of the property’s value and your interest rate will be higher the bigger the LTV ratio.
As with a mortgage, the more equity you own, the better the terms you can secure. This includes the possibility of lower interest rates, that’s because you are seen as being less risky to the lender.
Exit strategy
When you take out a bridging loan you need to have an exit strategy. With a mortgage, your exit strategy is when you sell your property or have paid your loan and all the interest. Bridging loans are different as they are short term. We’ve looked at exit strategies before but this is key to the kind of terms and how much bridging loan you will be offered.
Fees
As well as the interest you’ll pay on top of your loan amount, you will be charged fees. These include legal fees as well as valuation fees in some cases. You will need to include these when working out the overall cost of your bridging loan as this will impact how much you can borrow.
Bridging loan calculator
At Steel River Bridging Loans, we are passionate about helping people. To help you understand your options, you can use our simple Bridging Loan Calculator.
It will give you an indication of the loan you require and what the interest and repayments will be. Monthly interest rates can vary but are often between 0.5% to 2%.
If you need help, you can always contact us for a free chat before using the calculator. Contact our friendly team for help today.
Remember, your home could be at risk if you do not keep up repayments on a loan secured on your property
