Open vs closed bridging loans
A closed bridging loan has a repayment date the lender can treat as fixed — typically an exchanged sale or a confirmed refinance. An open bridging loan has no fixed repayment date, only a maximum term and a planned exit. Closed bridges are usually priced a little more keenly on equivalent cases because the lender’s risk of the loan overrunning is lower. Both still need a credible exit.
Last reviewed: 20 October 2026 · By Pasecom Group Ltd editorial team
BridgingLoans.online is an independent UK introducer operated by PASECOM GROUP LTD (company 17139327, ICO ZC117546). We do not lend and we do not advise. Nothing on this page is a quote, an MCOB illustration or an offer of credit.
What is the difference between open and closed bridging?
Open and closed are not two different products. They are the same short-term, property-secured loan, with one underwriting question answered differently: is there a repayment date the lender can rely on, or only a plan and a long-stop date?
| Closed bridge | Open bridge | |
|---|---|---|
| Repayment date | Known, because the exit is contracted | Not fixed; a maximum term applies |
| Typical exit | Exchanged sale, confirmed mortgage offer | Property on the market, refurbishment then sale or refinance |
| Lender’s main risk | The contracted exit falling through | The exit taking longer than planned |
| Typical uses | Chain gap after exchange, short timing gap | Auctions, refurbishment, unsold homes, development exit |
| Pricing | Often a little keener on equivalent cases | Priced for the risk of overrun |
“We hope to sell in eight weeks” is not closed. A closed bridge needs a contract or a firm offer the lender can see. Most auction, refurbishment and unsold-chain cases are open.
Why are closed bridges usually cheaper?
Lenders price the chance that they will still be secured on the property after the date they modelled. With a contracted exit that chance is lower, so pricing often reflects it. It is not a rule of physics, though: a messy closed case with a weak buyer can price worse than a clean open case with lots of equity. Lenders look at the whole file — LTV, property, borrower and exit — not just the label.
What risk does the label hide?
An exchanged sale can still collapse. A buyer can fail to complete; a mortgage offer can be withdrawn; a refinance can be declined after a fresh valuation. When that happens, a closed bridge becomes an open problem overnight — and the loan still has to be repaid. Ask what happens if the contracted exit fails: how long you would have, whether an extension is possible and at what cost.
Open bridges cost more because overrun is more likely, so the most important protection is a realistic term. Here is the same £250,000 bridge modelled over six and nine months with this site’s teaching defaults:
| Line | Amount |
|---|---|
| Security value | £450,000 |
| Net funds needed | £250,000 |
| Arrangement fee (2% of net, added to the loan) | £5,000 |
| Interest base (net + fee) | £255,000 |
| Monthly interest at 0.85% | £2,167.50 |
| Total interest (6 months, simple retained) | £13,005 |
| Gross facility | £268,005 |
| Net LTV | 55.6% |
| Gross LTV | 59.6% |
| Total cost of credit (fee + interest) | £18,005 |
Indicative educational example using this site’s calculator method: fee = net × 2%; interest = (net + fee) × 0.85% × months; gross = net + fee + interest. The 0.85% a month and 2% fee are teaching defaults, not our rates and not a quote. Valuation, legal and broker costs are not included.
Stretching the term from six to nine months raises retained interest from £13,005 to £19,507.50 and the gross balance from £268,005 to £274,507.50. Many lenders rebate unused retained months if you repay early, subject to a minimum interest period, so a slightly longer term can be a sensible buffer — check the rebate terms before you rely on that. Model both in the calculator.
What evidence makes a bridge closed?
Lenders generally want to see the contract itself — for example confirmation from solicitors that contracts have exchanged and the completion date — or a binding mortgage offer for a refinance. Marketing particulars, an offer that has been accepted but not exchanged, or an agent’s opinion that the property will sell quickly are evidence for an open bridge, not a closed one.
Can an open bridge become closed?
Sometimes. If contracts exchange on your sale during the term, the risk profile improves. Whether a lender will reprice an existing loan is up to that lender; do not budget for it as a right. More commonly, the benefit of exchange is that you can see your redemption date and stop paying for months you will not use, where the loan rebates them.
Is open or closed the same as regulated or unregulated?
No. Open/closed is about the exit date. Regulated/unregulated is about who lives in the property. You can have a regulated open bridge (buying a new home before your current one has sold) or an unregulated closed bridge (an investment sale that has already exchanged). The two questions are answered separately.
Which situations usually use each?
- Closed: completing an onward purchase when your sale has exchanged but completes later; covering a short gap before a confirmed refinance completes.
- Open: buying at auction before arranging long-term finance; buying a home before your current one is under offer — see buy before you sell; refurbishing before sale or refinance; holding finished units while they sell — see development exit finance.
Related: exit strategies, how bridging loans work and costs and fees.
Is this regulated or unregulated bridging?
Occupancy is the legal dividing line. If you or a close family member live in, or will live in, the property as a home (the usual test is at least 40% of it), the loan is likely to be a regulated mortgage contract, with affordability checks, consumer protections and usually a maximum 12-month term. BridgingLoans.online is an introducer, not an FCA-authorised broker and not a lender: where occupancy is yes, we pass a complete pack to an FCA-regulated broker, who explains the protections that apply. Investment, commercial, vacant buy-to-let, land and many company or SPV files are often unregulated. Either way the figures here are indicative only and this is not advice or a product recommendation. See regulated bridging and unregulated bridging.
Your home or property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.
Indicative estimate only. Not a quote, illustration under MCOB, or offer of credit. BridgingLoans.online is a trading name of PASECOM GROUP LTD (company 17139327, ICO ZC117546), an introducer, not a lender. Email hello@bridgingloans.online.
Last reviewed: 20 October 2026.
FAQs
What is a closed bridging loan?
A bridge with a repayment date the lender can treat as fixed, usually because the exit is contracted — for example a sale that has exchanged or a confirmed refinance.
What is an open bridging loan?
A bridge with no fixed repayment date, only a maximum term and a planned exit. It still needs a credible, evidenced plan to repay.
Is a closed bridging loan always cheaper?
Usually a little keener on an equivalent case, because overrun risk is lower. Not always: the whole case — LTV, property, borrower and exit — drives pricing.
Can I start open and become closed later?
Sometimes, if contracts exchange during the term. Whether the lender reprices is up to them. The main benefit is knowing your redemption date.
What if the exchanged sale fails?
You still owe the gross loan. Tell the lender straight away and rebuild the exit. Extensions are discretionary and usually cost more.
Do lenders ever change an open bridge into a closed one?
The facility terms do not normally change, but once a sale exchanges the lender has more certainty about repayment. A few lenders may then agree a revised maturity or pricing. It is not automatic; ask before relying on it.
Next step
Use the calculator for an indicative starting point, then enquire if you want an introduction.