First-Time Buyer Bridging Mortgage

What is an exit strategy?

The exit strategy is simply how you will pay back your bridging finance. A bridge is only for a specified period of time. It can be as short as a month, for example, although it’s more commonly 12 or 24 months – and anywhere in between.

If you’ve agreed finance for 12 months, how will you pay that loan back? If you can’t pay it back within that period, there can be significant penalties and additional interest.

Having an exit strategy means there’s a plan in place for repayment. It could be refinancing to a standard mortgage. In that case, have you got your Agreement in Principle?

Or, you might plan to sell the property and perhaps use the funds left over for your next project. There are risks with that, as well. Will the market hold up? Will it get the value you expect? A lender will really want to understand your plan and check you’ve thought it through.

How much does a bridging loan cost for a First Time Buyer?

The cost varies depending on your position, your plans and the lender. Be aware that interest is usually charged monthly, not annually. You’ll often see figures like 0.6%, 0.7%, 0.8% per month as we speak today in April 2026 – but that could change. It depends on the market at the time.

On top of that, lender arrangement fees could be anywhere between 1% to 2% of the total loan. There’s normally a valuation fee for bridging finance, which is higher than with mortgages – they go into more detail to understand the property you’re buying.

There are also legal fees to think about – both your fees and the lender’s solicitor’s fees. Remember, bridging finance is short-term lending, and it’s all about risk management.

Those risks bring higher costs. This is short-term money to help you deliver a project and then come out.

What are the pros and cons of a bridging loan?

The big pro is that it’s fast. You can get the funds from a bridging finance company in three or four weeks – sometimes quicker. It also gives you the ability to buy properties that wouldn’t be appropriate for a standard mortgage; those that are distressed, that need work or need a quick sale.

The disadvantages are that there’s a higher cost, and a higher risk of losing that property if you can’t pay that loan back at the end of the deal.

It’s very complex finance, and you need to think about the interest. You can pay this each month or add it to the loan, so it’s really important to talk to someone to make sure you fully understand everything before going ahead.

Are there any alternatives?

Yes. When you’re buying at auction, sometimes the auction house allows you longer to arrange a mortgage. They can allow up to 56 days, which is usually enough time for your borrowing to go through if everything runs smoothly.

If you are planning to do that, speak to a broker first and arrange the mortgage ahead of time. Get that Agreement in Principle before you push the button.

If you’re doing work on the property, there could be specialist products to look at. A self-build mortgage could be a better option than bridging finance. Again, talk to a broker to explore your options.

How long is the process for a first-time buyer bridging loan?

Speak to a broker that does this type of lending. We’ll assess your plans and talk to you about your exit strategy. We look at your potential borrowing capacity and can usually secure an Agreement in Principle from a bridging lender within 24 to 48 hours.

If they agree to lend you this money, there’s still a lot of due diligence and underwriting to take place and it moves on to the valuations and legal stages.

If you are successful in your bid at auction or your offer on the property, that’s when the real work starts. We always recommend working with an experienced solicitor that deals with bridging on a regular basis. There are certain complexities and quirks, so having the right legal team in place is really important.

Once all that’s done, the funds will be released for completion. Unlike a standard mortgage, it’s not normally exchange and completion, it’s straight to completion, although if you’re buying at auction, there can be exchange dates.

A standard bridge probably takes three to four weeks, and can be quicker if something urgent needs to happen. I have known deals take just a matter of days in the right circumstances, but it’s unusual.

You’ve demonstrated how a mortgage broker can help – anything else you’d like to add?

If you’re a first-time buyer thinking about the bridging route, do speak to a broker because it’s complex. There’s a lot you need to think about.

It can get very expensive if you don’t take the right advice. We’ve seen people rush into bridging finance that hasn’t worked out and they’ve lost a lot of money. Get advice before you make any decisions.

We have access to a very wide range of lenders, and many are intermediary-only, which means you can only go to them through a broker. While some do direct business, you would be limiting your options.

A broker will also get all the paperwork and packaging done in the right way so that the deal goes as smoothly as possible. There’s lots of ways we can help, so if you’re a first-time buyer thinking about this, we would love to talk to you.

Key Takeaways:

• Bridging loans are available to first-time buyers, mainly for fast purchases at an auction or for renovating properties that are currently unmortgageable.
• Lenders primarily focus on the value of the property (the asset) and require a detailed plan, including a robust “exit strategy” for how the short-term loan will be repaid.
• It is not a low-cost option; you will typically need a deposit of 25% to 35% of the property’s value, and you should plan for a contingency fund of at least 15% to 20% for project costs.
• The key advantage is speed (funds can be released in three to four weeks), but the main disadvantages are higher costs, higher risk, and the fact that some bridging finance is not regulated by the Financial Conduct Authority.
• Given the complexity and risk of the finance, it is strongly advised to speak to an experienced mortgage broker to help navigate the process and access a wider range of available lenders

YOUR HOME IS AT RISK IF YOU FAIL TO KEEP UP PAYMENTS ON YOUR MORTGAGE OR ANY OTHER LOANS SECURED AGAINST IT.