How chains break
Most residential sales are linked: your buyer is selling to fund their purchase, and your seller is buying elsewhere. If any link fails, perhaps a buyer's mortgage falls through or someone changes their mind, everyone above and below can be left waiting. If you are under pressure to complete on your purchase, you risk losing the property and the costs already spent.
A chain break bridging loan replaces the missing sale proceeds for a short period. You complete your purchase on time, then repay the bridge when your existing property sells.
Open and closed bridges
Lenders distinguish two types of chain break bridge:
- A closed bridge is used where contracts on your sale have already exchanged and a completion date is fixed. The exit is certain, so lenders view it as lower risk.
- An open bridge is used where your existing property is not yet sold, or not yet under contract. The lender will want evidence of value and saleability, such as agents' valuations and comparable sales, and will usually allow a term long enough to market and sell.
Closed bridges are generally easier to arrange. Open bridges are common and widely available, but the term should leave room for a sale to take longer than hoped.
Security and how much you can borrow
Chain break bridges are often secured on both properties, the one being bought and the one being sold. Taking both as security lets the lender look at the combined value, which can allow you to fund the whole purchase, and sometimes the deposit and costs, without new cash. Any existing mortgage on the property being sold is taken into account.
Lenders work to a maximum loan to value across the security, commonly up to 70% to 75% on first charges. If your current home has a mortgage you are keeping until the sale, a second charge bridge may be used behind it. Every charged property is at risk if the loan is not repaid.
Regulation and costs
Most chain breaks involve people's homes. 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. For investors breaking a chain on investment property, the loan is usually non-regulated.
Costs follow the usual bridging pattern: a monthly rate, an arrangement fee, valuation and legal fees, and sometimes an exit fee. Because the term is often short, the arrangement fee and fixed costs can be a large share of the total. See how much a bridging loan costs, and check stamp duty, as owning two homes at once can trigger higher rates.
What lenders need to see
- Details of both properties, including any existing mortgages and their redemption figures
- For a closed bridge, confirmation of exchange on your sale and the completion date
- For an open bridge, agents' valuations, marketing details and comparable sales
- For regulated cases, evidence of income and outgoings
- Proof of identity and address, and your solicitor's details
Speed matters in a chain, so having this ready makes a real difference. Read how long a bridging loan takes, then compare lenders on Instant Quotes.
Common questions
Can I buy a new house before selling my current one?
Yes. A chain break bridging loan funds the purchase now and is repaid when your existing property sells. Where you will live in the property, the loan is regulated.
What is the difference between an open and a closed bridge?
A closed bridge has a fixed exit, usually an exchanged sale with a completion date. An open bridge has no fixed date, so lenders look harder at value and saleability.
Can a chain break loan cover the full purchase price?
Sometimes. Where the bridge is secured on both properties, the combined value can support the full price, subject to the lender's maximum loan to value.
This guide is for general information only and should not be treated as legal, tax or financial advice. Lender requirements depend on the property and your circumstances.
