Regulated bridging loans
A bridging loan is usually regulated when you or a close family member live in, have lived in, or intend to live in at least 40% of the property used as security. Regulated bridging is a consumer mortgage contract: terms are usually capped at 12 months, affordability is checked and FCA rules apply. We are an introducer: where a case is likely to be regulated, we pass it to an FCA-regulated broker.
Last reviewed: 4 October 2026
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 makes a bridging loan regulated?
UK mortgage regulation looks at how the security is used, not at the label on the product. If you, or a close family member, occupy or will occupy a significant part of the property — the rule of thumb is 40% or more — the loan is generally treated as a regulated mortgage contract. A buy-to-let you will never live in, a commercial unit or a development site sits on the other side of the line. If a building is part home and part business, ask the regulated broker how it will be classified.
Regulated bridging is commonly used for chain breaks, for buying a new home before selling the current one, for downsizing, and for some auction purchases of a home the buyer will live in.
What do the rules mean in practice?
| Feature | Regulated bridging | Unregulated bridging |
|---|---|---|
| Who it is for | Homes you or close family live in or will live in | Investment, commercial, land, most company borrowers |
| Maximum term | Usually 12 months | Often longer, commonly up to 12–24 months |
| Affordability | Assessed, even when interest is retained | Asset- and exit-led; income checked on serviced loans |
| Advice | Regulated advice from an authorised firm | Depends on the firm and the case |
| Disclosure | Formal consumer documents and time to consider them | Commercial loan documents |
| Complaints | Consumer complaint routes through the authorised firm | Depends on the firm and borrower type |
BridgingLoans.online does not give regulated advice and does not recommend products. We qualify the enquiry — purpose, occupancy and exit — and introduce it to an FCA-regulated broker who will advise you and explain the protections that apply.
How do interest and the exit usually work?
Retained interest is common, so you are not asked to find a monthly payment for the bridge while also paying an existing mortgage. If you repay early, unused retained interest is often rebated, subject to any minimum interest period. The usual exit is the sale of the existing home; some cases refinance onto a long-term mortgage instead. Because the term is normally capped at 12 months, the exit has to be realistic within that window — an optimistic asking price is not an exit.
Worked example: buying before your sale completes
Suppose you need £300,000 towards a £550,000 home for nine months while your current home sells, using this site’s teaching defaults. The lender may take security over both homes; this table shows only the new one.
| Line | Amount |
|---|---|
| Value of the home being bought | £550,000 |
| Net funds needed | £300,000 |
| Arrangement fee (2% of net, added to the loan) | £6,000 |
| Interest base (net + fee) | £306,000 |
| Monthly interest at 0.85% | £2,601 |
| Total interest (9 months, simple retained) | £23,409 |
| Gross facility | £329,409 |
| Net LTV | 54.5% |
| Gross LTV | 59.9% |
| Total cost of credit (fee + interest) | £29,409 |
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.
Your sale has to clear the gross balance of £329,409, plus any existing mortgage on the old home and selling costs. If the sale takes the full nine months, retained interest is £23,409; if it completes sooner, many lenders rebate unused months. The regulated broker’s illustration — not this table — will show the actual figures for your case. Try other terms in the calculator.
What happens if the house does not sell in time?
Interest continues and the lender has to decide whether to extend, which is not automatic. Options may include reducing the asking price, refinancing, selling another asset or adding cash. Tell the lender and broker early. Because this is your home, the consequences of default are serious.
Which costs should I expect on a regulated bridge?
The same layers as any bridge: monthly interest, an arrangement fee, valuation and legal costs, and sometimes a broker fee or exit fee. Because the lender may take security over two homes, there can be two valuations and more legal work. The regulated broker must explain all costs in the formal documents before you commit. Dated market bands are in bridging loan costs and fees — guidance only, not our rates.
What should I prepare before enquiring?
- Details of both properties, including any existing mortgages and their balances.
- An estate agent’s marketing appraisal for the home you are selling.
- Income and outgoings, because affordability will be assessed.
- Who will live in the new home, and when.
A complete, accurate pack helps the regulated broker give advice sooner. Do not leave out other debts or commitments; they will be found during affordability checks. See also unregulated bridging loans and open vs closed 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: 4 October 2026.
FAQs
What happens if my house does not sell within 12 months?
A regulated bridging term cannot usually run beyond 12 months. If the exit is late, you may need an extension, a refinance or another repayment source. Extensions are not automatic and default can put the property at risk.
Can I get a regulated bridging loan with bad credit?
It is possible but harder than on an investment file. Lenders still have to treat the loan as a regulated mortgage. Strong equity and a contracted sale can help; recent defaults still matter.
Is a buy-before-you-sell loan always regulated?
Not automatically. Regulation depends on the security, who occupies it, the borrower and the purpose. Ask the broker which classification applies to your structure.
Are there early repayment charges?
Many modern bridging facilities rebate unused retained interest if you redeem early, subject to any minimum interest period. Read the illustration you are given. We do not publish a representative example.
Can I use a regulated bridging loan to buy a home at auction?
Sometimes, if you or family will live in it. The regulated process — affordability, advice and formal disclosure — has to fit inside the auction deadline, so start before you bid. There is no guarantee it can be done in time.
Do you give advice on regulated bridging loans?
No. We are an introducer, not an FCA-authorised broker or lender. Where a case is likely to be regulated, we pass a complete pack to an FCA-regulated broker, who advises you and explains the protections.
Next step
Use the calculator for an indicative starting point, then enquire if you want an introduction.