Real Estate Blog Banner

09 Feb: What Is a Bridge Loan?

What is a bridge loan? A bridge loan is a short-term temporary financing option that typically has a loan maturity of 18 months or less. Bridge financing provides fast access to cash ordinarily used by a borrower purchasing a property to bridge the finance gap between the sale date of the current property and the completion date of the new property. However, bridging loans are ordinarily a financing means of last resort given that they come with much higher interest rates than traditional mortgages and are typically offered by advisers, specialist bridging finance companies and mortgage brokers and are not normally offered by high street banks. Failure to repay a bridge loan will likely lead to repossession and very significant adverse costs consequences.