A bridge loan is a short-term loan designed for property buyers and developers. Think of it as either a temporary loan or even a short-term mortgage.

Bridging can be used in a variety of circumstances to provide finance until a more permanent form of finance can be arranged, such as a mortgage. The term ‘bridge’ is often used, as that’s exactly what a bridging loan is designed to do. Finance to get you from A to B. You may need to ‘bridge the gap’ due to monetary issues or time constraints (or both).

Funds are provided very fast in comparison to mortgages and can therefore make a great alternative. A word of caution, bridging loans usually come with high-interest rates and fees and for this reason, are generally used as a last resort. Nonetheless, they can make financial sense when used correctly.


Here’s how a bridge loan would work:


You want to purchase a property, but it isn’t possible to get a mortgage due to its condition


The property is valued at £200,000 and you have a £50,000 deposit


You then get a bridge for £150,000 so you can buy the property outright


You can then sell the property to repay the loan plus the interest or get a mortgage once you’re able

Bridge loans is often repaid within one year, as interest rates are a lot higher when compared to mortgage rates.

How much your buy-to-let mortgage will cost you will depend on several factors. The main ones are:

  • Size of your deposit: The bigger deposit you can put down, the smaller the mortgage you’ll need to borrow. Lenders will usually ask for 25% of the property’s value, although it can be higher

  • Interest rate: You’ll only pay back the interest each month, not the full capital amount

  • Loan term: You’ll pay back the full cost of the mortgage at the end of the loan term

With a buy-to-let mortgage, you’ll only usually pay the interest each month, not the full capital amount. But while this might mean your monthly repayments are cheaper than a standard residential mortgage, you’ll need to consider how you’ll repay the full cost of your mortgage debt at the end of the loan term.

To get an idea of your buy-to-let mortgage eligibility and affordability, we can work out what your repayments will cost you each month. This will be based on how much you’re borrowing, the interest rate and fees of your mortgage deal, and how long you’ll have to pay it off (the term).


Stephanie Drew

"Working with Canaan Finance was a breath of fresh air. Their team demonstrated exceptional knowledge and professionalism throughout the mortgage process. They were proactive in providing updates and ensured I felt supported and informed every step of the way. I would not hesitate to recommend Canaan Finance to anyone in search of a reliable and trustworthy mortgage adviser."

Michael Uyo

Stock Trader
"I am grateful to have chosen Canaan Finance as my mortgage adviser. Colin team was attentive, responsive, and guided me through the entire process with ease. He took the time to understand my financial goals and presented me with suitable mortgage options. Canaan Finance made the journey to home ownership a smooth and enjoyable one. I highly recommend this company."