Bridging Loan Alternatives — Other Ways to Borrow

When a Bridging Loan Might Not Be the Best Option

Bridging loans are powerful but expensive. If you don't need funds within days, or if you're borrowing for longer than 12 months, there are often cheaper alternatives. The right choice depends on how fast you need the money, how long you need it for, and what security you can offer.

A good broker should tell you when a bridge isn't the right answer — not just sell you whatever product pays them the highest commission. Here are the main alternatives to consider.

Remortgaging or Further Advance

If you have equity in an existing property and don't need funds urgently, remortgaging or requesting a further advance from your current lender is almost always cheaper than a bridge. Mortgage rates are a fraction of bridging rates — typically 4–6% per year compared to 6–15% per year for a bridge.

The trade-off is speed. A remortgage takes 4–8 weeks. A further advance can be faster (2–4 weeks) but the amount is limited. If your deal can wait that long, this is usually the better option.

Remortgaging also makes sense as an exit strategy for a bridge — take the bridge for speed now, then remortgage onto a cheaper long-term product once the urgency has passed.

Development Finance

If your project involves significant construction or structural work, development finance is designed specifically for this. Unlike a bridge (which releases funds in a lump sum), development finance is drawn down in stages as work progresses. This can be cheaper overall because you only pay interest on funds you've actually drawn.

Development finance lenders will typically fund up to 65–70% of GDV (Gross Development Value) and 100% of build costs in some cases. Rates start from around 5–8% per year — cheaper than a bridge for projects lasting 6–18 months.

The downside is speed and complexity. Development finance takes 3–6 weeks to arrange and requires detailed project plans, planning permission, and a professional cost schedule.

Secured Personal Loans

For smaller amounts (£5,000–£100,000), a secured personal loan may be appropriate. These are longer-term products (3–25 years) with monthly repayments, offering lower rates than a bridge but slower to arrange.

Secured loans work well when you need to raise capital against your home but don't want to remortgage — for example, for home improvements, debt consolidation, or a large purchase. They're not suitable for property transactions where you need funds quickly.

Auction Finance

Auction finance is essentially a bridging loan designed specifically for auction purchases, but some specialist products offer slightly better terms for auction buyers — lower arrangement fees or faster completion guarantees.

If you're buying at auction, it's worth asking your broker whether a dedicated auction finance product would be cheaper than a standard bridge. The terms are similar, but some lenders offer auction-specific incentives to attract this business.

Mezzanine Finance

Mezzanine finance sits between senior debt (your main loan) and equity (your own money). It's used by developers to reduce the amount of their own capital tied up in a project. Mezzanine rates are high (10–20% per year) but can improve overall returns if the project is profitable enough.

This is a specialist product for experienced developers working on larger projects. It's not a like-for-like alternative to a bridge, but it's worth knowing about if you're stretching to fund a development and need to fill a gap between your senior loan and your available equity.

The Bottom Line

A bridging loan is the right choice when you need speed and short-term flexibility — completing in days rather than weeks, buying at auction, breaking a chain, or securing a deal before it slips away. For everything else, explore the alternatives first.

If you're not sure which option is right for your situation, speak to a broker who covers both bridging and mainstream mortgage products. They can compare the true cost of each option and recommend the most cost-effective route.

Your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.