How a downsizing bridge works
The bridge is usually secured on your current home, your new home, or both. It covers the purchase price of the new home, plus costs, until your current home sells. When the sale completes, the proceeds repay the bridge and any existing mortgage, and the balance is yours.
Interest is commonly retained or rolled up, so there are no monthly payments, but the total cost grows each month the sale takes. Most regulated bridges run for up to 12 months, so realistic pricing and active marketing of your current home matter.
Why the exit matters
Many regulated bridging lenders want a refinance as well as a sale, meaning you could take a mortgage on the new home if the old one does not sell. When downsizing, a sale is usually the only intended exit. A small number of lenders on our panel state that they accept a sale on its own as the exit on a regulated bridge, which is why we compare those first.
Lenders will look at the value of your current home, the local market and how long similar homes take to sell. An agent's valuation and marketing plan help support the case.
Age, income and affordability
Regulated lenders must check the loan is affordable and suitable. They look at your income, outgoings and how interest will be covered, as well as the exit. Age limits vary between lenders: some have no maximum age, while others set a limit at the end of the term, especially if a refinance is the back-up exit.
If you have an existing mortgage on your current home, it is usually repaid from the sale too, and the lender will take it into account when working out how much you can borrow.
How we handle regulated bridging
Because the loan is secured on a home that is, or will be, lived in by you or a close family member, it is a regulated mortgage contract with additional protections. We will tell you at the outset how your case will be handled. Instant Quotes shows only products built for regulated bridging when you tell us you will live in the property.
Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
If the property is, or will be, lived in by you or a close family member, the loan is a regulated mortgage contract and comes with additional protections. We will tell you at the outset if that applies and how your case will be handled.
