You can use a bridging loan for a deposit on a new home. Bridging loans are commonly used for this purpose, helping homeowners to bridge the gap between purchasing a new home and selling their current one. The loan can then be repaid once the current home has been sold.

Bridging loans are great for those who need to borrow for a short period of time. They can resolve temporary cash flow issues, enabling property developers to go ahead with a new project, help homeowners secure their dream home and more.

For homeowners in particular, bridging loans can be great when wanting to purchase a new property but restricted, waiting for the sale of their current home to fund the purchase of the new one.


What LTV Can I Can on a Bridging Loan?

You can get bridging loans at 70% LTV if regulated, and 75% if unregulated, however there are also some cases where you can get up to 100% LTV. As a type of secured lending, borrowers will have to have a property/valuable asset to be used as collateral on the bridging loan.




You will be able to borrow a certain LTV (loan to value) on your property’s equity, the precise percentage of this being dependent on a few different factors. This can include:

  • Your income
  • Your credit score
  • Your affordability
  • The amount you need to borrow

Speak to Octagon Capital on 0333 414 1491 to discuss bridging loans. With Octagon Capital, you can borrow from £50,000 to £25 million, with loan terms of up to 24 months and rates from 0.44% per month.


What Else Can a Bridging Loan Be Used For?

Bridging loans can accommodate for a range of different borrowing needs. As well as being used by homeowners wanting to purchase a new property before the sale of their current home goes through, these types of loans can also be useful for property developers looking to refurbish a property with the intention of selling it at a higher price.





Borrowers can also use a bridging loan to raise finance for investment opportunities. This type of loan is great for short-term use, helping with temporary cash flow issues, repayments able to be made either monthly or altogether at the end of the loan term.


Do Bridging Loans Require a Deposit?

Yes, bridging loans will typically require a deposit. This deposit is paid upfront and in a lump sum.

The amount borrowers will have to pay for the deposit will depend on various different details of their borrowing circumstances, including the following:

  • The amount wanting to be borrowed
  • The value of the property wanting to be purchased
  • The LTV (loan to value)

Deposits for a bridging loan will be a minimum of around 20% to 25%, and represents the proportion of the property that the borrower owns outright, while the LTV is the rest of the property the borrower pays off through the bridging loan.


What’s the Eligibility Criteria?

The eligibility criteria for a bridging loan with Octagon Capital includes:

  • Minimum borrowing amount of £50,000
  • Must be in the U.K., Scotland or Wales
  • Must have an exit strategy
  • Must be over 18
  • Bad credit considered
  • Residential, commercial, mixed properties and HMOs considered

With Octagon Capital, you can also find non status bridging loans, meaning the lender is willing to consider those with bad credit histories, as well as those with no proof of income, being interested instead in the value your property potentially has, and your plans with it.


Is a Bridging Loan Right for Me?

Bridging loans are a great way to borrow, provided you borrow for the right reason. A bridging loan is best used to temporarily bridge a financial gap, whether this is for purchasing a new house when waiting for your current home to sell, to help fund property development projects or more. If you need short-term access to funds for any of these reasons, it could be worth considering a bridging loan.




Octagon Capital are a London-based broker, who have partnered with SPF Short Term Finance to process all enquiries and provide a quality service. Make an enquiry with our team today by calling 0333 414 1491 or emailing us at