By Clare Yates
6 min read
This guide explores some potential alternatives to bridging loans, helping you weigh up which solution best suits your needs and circumstances.
Please note that this is a guide for information purposes. As always, when deciding which financial option is right for you or your business we suggest seeking independent financial advice.
At-a-glance comparison of bridging loan alternatives
With multiple financing options available, it can be tricky to weigh up which one suits your situation best. The table below gives a quick overview of how bridging loans compare with other alternatives in terms of speed, loan duration, security, and typical uses, helping you get a clearer picture of what might work for you.
We take a closer look at each of these options further down the page, explaining how they work and when they might be a better fit than a bridging loan. Keep reading to see which solution could suit your needs.
Option | Short, medium or long-term? | Good for? |
Bridging loan | Short | Quick cash at a higher rate to buy a property before you’ve sold your current one, or to snap up a bargain at auction. |
Secured loan | Medium | A loan using your property as collateral, typically repaid monthly over several years. |
Remortgaging | Medium–long | Useful for releasing equity for bigger projects, with the mortgage itself lasting several years. |
Personal loan | Short | Small, fast, and unsecured borrowing for everyday needs or smaller projects. |
Development finance | Short | Funding for property developers tackling builds or big renovations, often over several months or a couple of years. |
Portfolio mortgage | Medium–long | Handy for investors managing multiple rental properties over a longer period. |
Refurbishment loan | Short | A form of bridging loan, useful for bigger renovation projects that need money in stages. |
Savings/family | Short | Quick and informal – borrow what you need without interest or fees. |
Rebridging loan | Short | Extend an existing bridging loan if your project’s taking longer than planned. |
Secured loans
Secured loans, sometimes called second-charge mortgages, let you borrow against the equity in your home without replacing your current mortgage.
They often come with lower interest rates than unsecured loans and offer longer terms than bridging finance. However, they take more time to arrange, so they’re better suited if you don’t need the funds urgently and want a more affordable option.
Remortgaging
If you’ve already got a mortgage, remortgaging could let you release some of the equity in your property by switching to a new deal.
This can be a useful option when you’re not in a rush and want to spread repayments over the long term. Just bear in mind that early repayment charges might apply, and the process usually takes a few weeks to complete.
Personal loans
Personal loans can be a simple way to borrow money if your needs aren’t too complex. These loans don’t use your property as security, which means they’re quicker and easier to arrange.
The increased risk to the lender means your borrowing limits are lower compared to secured options, but they can work well for covering one-off expenses or smaller shortfalls in funds.
Development finance
This type of finance is designed specifically for construction or renovation projects, usually over 6 - 24 months. Instead of receiving all the money upfront, the funds are usually released in stages as the work progresses.
It’s a common choice for developers and experienced investors, but it may involve more paperwork. You’ll typically need detailed plans, cost estimates and a clear repayment strategy. The upside is that it’s built to match the needs of larger, more complex residential and commercial projects.
Portfolio mortgages
If you own a number of rental properties, a portfolio mortgage can make life a lot easier. Rather than juggling multiple mortgages, this option lets you consolidate them into one, often with a single monthly repayment.
You may also be able to get better rates and more flexibility. Lenders that offer portfolio mortgages tend to understand the needs of property investors, so it’s a practical solution if you’re looking to expand or streamline your portfolio.
Refurbishment loans
Another type of bridging finance, refurbishment loans are specialist products designed for properties that need significant renovation work. They can be first or second charge mortgages, providing the capital needed to carry out upgrades, whether you're modernising a home for resale, preparing a rental property, or improving a recently purchased building that isn’t mortgageable in its current condition.
These loans may come with flexible terms that align with your renovation timeline. For instance, funds could potentially be released in stages based on project milestones, helping you manage cash flow as work progresses.
Once the renovations are complete, borrowers usually refinance or sell the property to repay the loan. Refurbishment loans can be useful for investors looking to add value quickly before switching to longer-term finance.
Savings or family support
Sometimes the simplest option is to use your own savings or get help from family and friends. It’s quick, there’s no interest to worry about, and it avoids the hassle of loan applications.
Still, it’s important to agree how the arrangement will work. Is it a loan or a gift? When do they expect to be repaid? Being upfront about these things can help avoid awkwardness later on. It’s a good short-term solution for smaller sums if everyone’s on the same page.
While this option may not be suitable for large sums or formal property transactions, it can be a helpful alternative for smaller amounts or bridging short gaps in cash flow. Just make sure you feel comfortable discussing money openly with those involved to keep things straightforward and stress-free.
Rebridging loans
Already have a bridging loan? If it is coming to an end and your plans have been delayed – perhaps because your next mortgage isn’t in place yet or a property sale is taking longer than expected – you might consider asking your current lender for an extension.
Sometimes, though, your lender may not offer favourable terms or might not agree to extend at all. In that case, rebridging loans from specialist lenders could be worth exploring. These can give you extra time to complete your plans, often with terms of up to two years, and you may even get a better deal by switching lender.
Which option could be right for you?
It depends on how quickly you need the money, how much you want to borrow, and what you’re using it for.
Bridging loans may be a good idea when speed is essential, but other options could give you better value, longer terms or more flexibility. If your current bridging loan is ending and you need more time, don’t forget that rebridging loans might also help you stay on track.