Key facts
- A bridge is closed only when the exit is confirmed, such as an exchanged sale or an issued refinance offer.
- An open bridge can be repaid at any time within its maximum term, but lenders still want evidence the exit is realistic.
- Open bridges on Capito's panel typically run for 12–18 months, or up to 24 months where the plan includes works.
- Past term, the usual options are an extension (fees typically 1–2%) or a re-bridge; otherwise default interest, often over 2% a month, applies.
- Capito is a UK Commercial Finance Broker, not a lender. Bridging starts from £50,000.
Exit
Confirmed (exchanged sale or refinance offer issued)
Planned, backed by evidence
Repayment date
Fixed, tied to the exit
Any time up to the maximum term
Pricing
Usually lower
Usually higher, reflecting exit risk
Maximum term
Short, set by the exit date
Typically 12–18 months, up to 24 with works
Typical use
Sale already exchanged, refinance already offered
Auction purchases, refurbishments, sales not yet agreed
Who is this guide for?
It's for property investors, developers and companies borrowing against investment or commercial property on an unregulated basis.
Buying a home you'll live in? If you or close family will live in the property, including breaking a chain on your own home, that's regulated lending. Capito doesn't arrange it, so we pass those enquiries to an FCA-authorised firm.
What makes a bridging loan closed?
A bridge is closed because the lender is satisfied, from your evidence, that the exit is in place. It isn't a product you pick off a list.
That evidence is usually an exchange of contracts on a sale, or a refinance offer a lender has actually issued. An agreed sale that hasn't exchanged, or an agreement in principle, usually won't be enough, so the case is treated as open. The repayment date is then set around the exit, often with a short buffer.
How does an open bridging loan work?
An open bridge gives you a maximum term, and you repay whenever your exit is ready within it. Many investment bridges work this way, because at the start of a purchase or refurbishment the sale or refinance can't be confirmed yet.
Terms are typically 12–18 months, and up to 24 months where the plan includes works. Interest is often retained or rolled up, so it keeps accruing while the loan runs.
What happens at the end of the term?
If the exit isn't ready, the lender may agree an extension, with a fee typically of 1–2%. If it won't, the loan falls into default, where interest is often over 2% a month. A re-bridge with a new lender is the other route, and Capito's panel lenders will re-bridge loans past term or in default up to 75–80% LTV; see extend or re-bridge. Exits fail mostly because LTV is too high, so review yours at least three months before term ends.
What evidence do lenders ask for on an open bridge?
Lenders want your exit to stand up on today's numbers, not just in your plan.
Exit type
What lenders typically ask for
Sale
Valuation to confirm figures
Buy-to-let or commercial refinance
Agent's rent view or existing lease, indicative terms from a refinance lender, rental cover at today's rates
Development
Gross development value backed by comparables, build costs and programme, a fallback such as development exit finance
More on this in our bridging exit guide.
Is open vs closed the same as regulated vs unregulated?
No. Open or closed is about whether your exit is confirmed, while regulation depends on whether you or close family live, or will live, in the property. An investor's open bridge on a rental flat is unregulated, and a homeowner's closed bridge on their own house is regulated; see regulated vs unregulated bridging.
Worked examples (illustration only)
Auction purchase on an open bridge
An investor buys a flat at auction for £300,000 with 28 days to complete, planning a light refurbishment and a buy-to-let refinance. Nothing can be confirmed in time, so the bridge is open. The lender reviews the agent's rent view and indicative buy-to-let terms and agrees a 12-month maximum term, and the investor refinances in month seven. More in auction finance.
Company sale exchanged, so the bridge is closed
A property company has exchanged on the sale of a commercial unit for £800,000, completing in ten weeks, and needs funds now for another purchase. Because the sale has exchanged, the lender treats the loan as closed and sets repayment around completion with a small buffer.
From the desk
In practice, Ashley finds lenders accept an open-bridge exit when it looks feasible within the timescale, meaning a sale or refinance the numbers and the term can actually support.
Common questions
What is a closed bridging loan?
One where the exit is already confirmed, usually by an exchanged sale or issued refinance offer, with repayment fixed around it.
What is an open bridging loan?
One with a planned but unconfirmed exit, repayable any time up to the maximum term.
How long can an open bridging loan last?
Typically 12–18 months, and up to 24 months where the plan includes works.
Can you repay a bridging loan early?
Usually yes, and on an open bridge that's the point. Lenders typically charge a minimum of 1–3 months' interest, so check this before you sign.
What happens if a closed bridge's exit falls through?
You'll need a new exit before the repayment date, so talk to the lender early; an extension or refinance may be possible.
Is a closed bridging loan easier to get?
Generally, yes, because a confirmed exit removes most of the lender's repayment risk.