A bridging loan is a short-term loan used to buy property. You pay it back when you get long-term funding, e.g. a mortgage or by selling the property.

Unlike a mortgage, where you pay a bit back every month, with a bridging loan, you pay everything back in one go after about a year.

To pay back the loan, you need a plan called an 'exit.' Usually, this means selling another property (like your old house), selling the property you bought with the loan, or getting a mortgage.

People often use bridging loans to buy property while waiting to sell an existing property e.g. their current home. Once they sell, they can use that money to pay back the bridging loan.

Bridging loans are useful for chain breaks, downsizing or upsizing property, auction purchases and where you need to act fast to secure a property sale.