Bridge financing is a short-term loan — usually from the same lender providing the new mortgage — that covers the gap between a buyer’s purchase closing date and the closing date of the sale that is supposed to fund it.
One plain-language answer page defines it as “a short-term loan that covers the gap when you are buying a new property before you have received the proceeds from selling your existing one,” and warns that “interest rates on bridge loans are typically higher than on standard mortgages” and that “the loan is usually for a few weeks.” A companion page, on bridge financing between closings, adds the mechanics: the loan is “typically secured against your current property (the one being sold)” with a registered mortgage or charge, on top of a higher interest rate and administration fees. That same page adds a number on the outer limit too: most lenders will not extend a bridge past roughly 90 to 120 days, so a sale closing further out than that may leave a buyer without this option at all.
Because it is short and interest-bearing, bridge financing is a tool for a known, dated funding gap — not a substitute for a buyer who cannot otherwise qualify for the purchase.
A buyer’s new home closes June 1. Their current home closes June 15, releasing $310,000 in net sale proceeds, of which $200,000 is needed to complete the June 1 purchase. A two-week bridge loan of $200,000, secured against the departing property, covers that gap; when the June 15 sale closes, the $200,000 principal plus its interest and administration fee is repaid in full out of the proceeds the moment they land, leaving the buyer with the remaining $110,000 of equity.
See also: the same cash-gap logic applies whether the shortfall comes from timing (mortgage assumption, defined) or from a low appraisal (appraisal gap, defined).
A 30-minute call is enough to tell you whether AI pays for itself here.
