Bridging Finance for Mortgage Brokers

You already know lending. Here's what's different about bridging.

What is bridging finance?

Bridging finance is short-term secured lending, typically lasting 1 to 24 months, used when speed or property condition makes a conventional mortgage impossible. The loan is secured against property and repaid when the borrower sells, refinances, or completes works. Most bridging loans complete in 2-4 weeks, compared to 8-12 weeks for a standard mortgage. Around 68 specialist lenders operate in the UK market, with rates typically ranging from 0.55% to 1.5% per month.

For mortgage brokers, bridging opens up a category of deals you're currently turning away. The client who needs to complete before selling. The investor who buys at auction. The landlord converting a house into an HMO. These are all bridging deals, and they're more common than most residential brokers realise.

How is it different from a mortgage?

Bridging and mortgages are both secured lending, but the underwriting logic is fundamentally different. There is no affordability assessment, no minimum income requirement, and completion happens in days rather than weeks. Interest is typically rolled up into the loan rather than paid monthly. The lender cares about the property, the exit strategy, and the borrower's experience — not their payslips.

Mortgage Bridging
Speed to completion 8-12 weeks 1-4 weeks
Income assessment Full affordability check Not required
Typical term 25-35 years 1-24 months
Interest Paid monthly Rolled up (paid at exit)
Security focus Borrower income Property value + exit strategy
Property condition Must be habitable Any condition accepted

What deal types will you see?

Six deal types account for the vast majority of bridging cases. Each has different lender appetite, LTV limits, and pricing. Understanding which type you're dealing with is the first step to placing the deal correctly.

The terms you need to know

Bridging has its own vocabulary. If you already speak mortgage, you're halfway there — but these terms trip up brokers who assume they mean the same thing as in residential lending.

Proc fee
The broker's commission, paid by the lender on completion. Typically 0.5% to 2% of the gross loan. This is NOT the borrower's arrangement fee — all lenders charge roughly 2% arrangement fee to the borrower regardless. Higher proc fee means higher broker earnings, not higher cost to the borrower.
LTGDV (Loan to Gross Development Value)
Used in refurbishment deals. The total debt exposure (day-1 loan + rolled-up interest + lender-funded works) divided by the expected end value after works. Each lender has different LTGDV caps per works intensity band. Getting this wrong is the fastest way to have a deal declined.
Day-1 advance
The amount released on completion day, before any works funding. In standard bridges this is the full loan. In refurbishment deals, works funding may come later in staged tranches.
Exit strategy
How the borrower will repay the bridge. Sale, refinance to BTL or residential mortgage, or refinance to a longer-term development loan. Lenders assess exit credibility carefully — a weak exit kills deals.
Staged drawdowns
In refurbishment deals with arrears/tranched funding, the lender releases works funding in stages as work is completed. A quantity surveyor inspects progress before each release. Adds complexity but reduces lender risk.
Gross vs net LTV
Gross LTV includes retained interest and fees in the headline percentage. Net LTV is pure loan amount. A lender quoting "75% gross" gives less cash in hand than one quoting "70% net" depending on term and rate. Comparing LTVs without standardising gross/net is meaningless.

How much can you earn?

Bridging proc fees typically range from 0.5% to 2% of the gross loan amount. On a typical residential bridge of 300,000 to 500,000, that's 1,500 to 10,000 per deal. Refurbishment deals tend to be larger — a medium-intensity refurb might involve a 600,000 gross facility, generating 3,000 to 12,000 in proc fees.

Compare that to residential mortgage proc fees of 0.3-0.4% on smaller loan values. A single bridging deal can match the proc from three or four residential cases. The deal flow is lower, but the economics per case are substantially better.

Most bridging brokers don't do bridging exclusively. They keep their mortgage book running and add bridging deals as the opportunities arise. The skills transfer — you already know how to qualify a borrower and package a case. The difference is learning which lender fits which deal.

Common mistakes brokers make

These are the patterns that cost brokers time and clients money. Most come down to applying mortgage assumptions to bridging deals — understandable, but avoidable once you know what to watch for.

How BridgeMatch helps

BridgeMatch filters 68 specialist bridging lenders against 113 criteria points per lender. You input the deal parameters — loan amount, property value, type, location, borrower structure, works needed — and see which lenders actually fit, which are borderline, and which are excluded. Each exclusion has a reason.

The database is built from direct relationships with lender BDMs and structured questionnaires covering everything from geographic exclusions to per-intensity-band LTGDV caps. It handles both regulated and unregulated bridging — something comparison sites can't do because they're not FCA-authorised.

The alternative is phoning round BDMs, waiting for callbacks, and hoping you remember which lender does what. On a 28-day auction completion, that approach puts deposits at risk.

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