A regulated bridging loan is short-term finance secured against the home you live in — or the one you are about to move into. Because the security is your main residence, the loan sits under Financial Conduct Authority regulation, with the extra protection and the shorter maximum term that brings.
What is a regulated bridging loan?
‘Regulated’ applies to any borrowing for a property that you are going to live in as your primary residence. For most people, that is the standard mortgage on their home. Buy-to-lets, investment properties and developments all use unregulated borrowing. With a regulated bridge, the regulated part simply means the loan is secured on a property you will live in — now, or at some point in the future.
The essentials:
- Term — 12 months maximum on a regulated loan; unregulated bridging can run to 24.
- Interest — retained by the lender at the outset, not paid monthly.
- Underwriting — led by the exit strategy rather than income or credit score.
- Protection — FCA regulation applies because your home is the security.
Regulated or unregulated — which do you need?
One question settles it: do you plan to live in the property? If the answer is yes, it's regulated. If the answer is no, it's unregulated.
From the borrower's side, the two products feel similar. The visible difference is the term — up to 24 months on an unregulated loan against a 12-month maximum on a regulated one. For the broker there is considerably more work in the background on the regulated side, but that is our problem rather than yours.
Who uses one
Nine times out of ten, a regulated bridge solves a timing mismatch: you are selling your current home and have found the next one, but the dates don't line up. The loan funds the new purchase so you can move in; when the sale of the previous home completes, the proceeds repay it.
Less commonly, owners use one to fund work on their existing home that a standard mortgage won't cover — a £500,000 house with £100,000 of extension or refurbishment work, say. The loan is repaid afterwards by refinancing onto a term loan, or from pension drawdowns, bonuses or other capital. It works, but it is the rarer case.
How much can you borrow?
Terms run very close to standard bridging: most lenders cap the gross loan at around 65% to 70% loan to value. If you are funding refurbishment work, you are unlikely to need that much.
On a purchase, the structure can go further. Where you are buying an onward home and selling your existing one, and there is enough equity in the current property, the lender can cross-charge the two — taking security across both. Structured that way, the loan can reach 100% loan to value, or slightly more where the equity allows, leaving you to cover only legal and valuation fees rather than putting cash into the purchase.
Costs and early repayment
Most regulated bridging lenders charge no early repayment penalty and rebate the unused interest — though some apply a minimum interest period (commonly three months), so always check the specific product. Again, as with the standard bridging loan process, most lenders will retain up to 12 months’ interest upfront. For every month you repay the loan early, you'll get a rebate of that interest. So it's in your interest to repay the loan as soon as you can.
The retained structure also answers the monthly-payment question: there isn't one. A few lenders will allow borrowers to service the interest subject to affordability, but most regulated lenders now prefer the retained structure — from a cash-flow perspective they want your exit, not a monthly payment, to be the focus. The interest builds within the loan and is repaid when you redeem.
The process
Proof of income isn't required; proof of exit is. If the exit is the sale of your existing home, the lender will want to see the property listed and a valuation that supports its saleability. If the exit is a refinance after refurbishment, they will want at least a Decision in Principle from a mortgage lender for the amount in question — evidence they will be repaid.
On timing: a regulated bridge can be arranged in two to three weeks at the quickest, and within a week in genuinely urgent cases. We tend to suggest a four to five week timeline — it gives valuers and solicitors time to do their work properly, without charging extra for working at a rush.
Our role is to structure the transaction and present the exit strategy in the way that best suits both the lender and you, drawing on a panel of 135+ lenders to secure the right terms.
Frequently asked questions
Can I get a regulated bridging loan if I'm self-employed?
Yes. Underwriting runs much as it does on a standard bridge: credit score and income carry little weight next to the exit. The one caveat is consistency — if your stated exit is a refinance with a high-street bank, the lender will want a Decision in Principle showing that refinance is realistic. Prove the exit is viable and it matters little whether you are employed or self-employed, or what you earn.
Can I get a regulated bridging loan with bad credit?
Yes. We have arranged regulated bridges to stop a repossession, and for clients with defaults and missed mortgage payments on file. The exit carried each case: the clients were selling assets — buy-to-let properties already on the market, alongside a downsize from the main residence — with substantial equity in the deal.
Are second charge bridging loans regulated?
It depends on the purpose. A second charge on your primary residence used for business purposes is unregulated. Used for a consumer purchase — a car, a holiday, refurbishments to your own home — it will qualify as regulated in almost all lenders' eyes.
Can I waive my rights and take an unregulated loan instead?
No — even though that would simplify matters for many borrowers. Lenders would not take the risk even if it were possible. Where your primary residence is the security, the borrowing will always qualify as regulated.
Listen to the episode
Regulated bridging is covered in more depth on the Propertyze podcast.
Your home may be repossessed if you do not keep up with your mortgage repayments.
To put numbers to your own scenario, use our bridging loan calculator — it estimates interest, fees, net advance and LTV.
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