A bridging loan is a short-term finance solution designed to ‘bridge’ the gap between the purchase of a new property and the sale of the existing home.

In simple terms, the loan is secured against the existing property and the new one being purchased. This allows you to purchase a new home before you have sold your current one.

When the existing property is sold, the bridging loan is repaid. This is where the term ‘bridge’ comes from - the loan is seen as a bridge from one property to another.

A bridging loan can also be used for alternate reasons, including an equity release before selling, release of funds for cosmetic improvements to a property before the sale, financial consolidation and investment property purchases.