Closed Bridging Loans

Closed bridging loans and open bridging loans are the two main types of bridging finance. Open bridging is less secure for the lender and allows for a bridging loan even though one or more properties are being used as security and one has not been sold.

Closed bridging finance is commonly used when buying a new home while awaiting the completion (after the exchange of contracts) of your current property. Very few sales fall through after the exchange, so lenders are happy to offer closed bridging finance, potentially at a reduced interest rate.

Closed bridging loan for property purchase


In this example, finance was taken out when a property was sold, and contracts were exchanged with completion taking place at an agreed-upon date in the future. While waiting, your dream property is put up for sale and gets potential buyers interested relatively quickly. You feel you will complete the sale of your current property in time to purchase your dream property prior to it being purchased by someone else. A closed bridging loan can be secured on your current property or the new property (or both), allowing you to make the purchase on your dream property. You pay the bridging loan back when you receive the proceeds from the property sale. Use our bridging calculator now to work out your repayment.