Short Term Mortgages

If you need to borrow money for only a short period, say a few months up to a year or two, the good news is yes, you can get a short-term mortgage. 

These are often known as bridging loans or short-term bridging mortgages, and they’re designed to bridge the gap when timing is tight. 

For example, you might use one to buy a new home before selling your old one, or to fund a quick renovation and resale (house flipping). 

Short-term mortgages give you fast, flexible funds, but they come with higher interest rates and require a clear plan to pay them back (usually by selling a property or refinancing soon). 

In this guide, we’ll explain how short-term mortgages work, their pros and cons, and when to consider one.

What Is a Short-Term Mortgage?

A short-term mortgage is basically a temporary home loan that you pay back quickly, as opposed to a standard mortgage that lasts 25+ years.

In practice, most short-term mortgages are bridging loans, loans secured on a property for a short period (often 6 to 12 months, and sometimes up to 18–24 months). 

The goal is to “bridge” a financial gap until you get permanent financing or sell a property. Just like a regular mortgage, it’s secured against your property (meaning the lender can take the property if you don’t repay).

But unlike a normal mortgage, which you repay in monthly installments over decades, a short-term mortgage is mostly interest-only and meant to be settled in full by the end of the term.

Typical short-term mortgages last under 1 year, though some can stretch to about 2 years at most.

Can You Get a Short-Term Mortgage in the UK?

Yes, it’s possible to get a short-term mortgage in the UK, although it’s not usually from the big high-street banks in the form of a normal mortgage. 

Specialist lenders and brokers offer bridging loans, and some smaller banks or building societies have niche short-term mortgage products. 

These loans are commonly used by homebuyers, landlords, and developers who need funding for only a short spell.

The amount you can borrow is typically based on the value of the property (or properties) you’re using as security. 

Generally, you might be able to borrow up to around 70-75% of the property’s value (Loan-to-Value), sometimes even 80% LTV in certain cases.

This means you usually need a decent deposit or equity as lenders won’t give 95% like a first-time buyer mortgage.

How Do Short Term Mortgages Work?

Short-term mortgages work a bit differently from the standard home mortgage you might be used to.

Here’s a simple breakdown of how they operate:

Quick setup and short duration

They are meant to be arranged quickly and last only a short time. While a normal mortgage might take a couple of months to process, a bridging loan can sometimes be arranged in just days or weeks.

The loan term is usually 3, 6, or 12 months, though it can often be extended up to 18 or 24 months if needed.

Interest-only payments

Most short-term mortgages are set up as interest-only loans during the term. This means you don’t actually pay down the borrowed amount monthly as you would with a standard repayment mortgage. 

In fact, many bridging loans even let you “roll up” the interest, essentially adding the interest charges to the loan balance and paying everything at the end.

Higher interest rates

Because the lender is giving you flexibility and taking on more risk, interest rates are much higher than normal mortgages. 

Short-term mortgage rates are usually quoted per month rather than per year. 

As of mid-2025, bridging loans charged around 0.8% per month on average, that’s roughly equivalent to about 10% annual interest, several times the rate of a typical long-term mortgage. 

Some deals for big loans or low-risk cases might be as low as ~0.5% per month, while riskier or smaller loans could be 1%+ per month. 

So, borrowing short-term can be expensive, but you’re not paying it for long. Lenders also typically charge arrangement fees (often about 1-2% of the loan amount), and sometimes an exit fee when you settle the loan. All these costs should be factored into your plan.

Clear repayment plan (exit strategy)

A crucial aspect of any short-term mortgage is having a definite plan for how you’ll repay the loan at or before the end of the term. Lenders will ask about your “exit.” 

Common exit strategies are selling a property (and using the sale money to pay off the loan) or refinancing into a regular mortgage (for example, once a renovation is completed and the property is in a condition that qualifies for a standard mortgage).

The expectation is that something will happen within months to give you the cash to clear the debt. 

Because of the short timeframe, you cannot stay on a short-term loan indefinitely, if you fail to repay on time, the costs can pile up and the lender can even repossess the property you put up as security.

Flexibility in use

Short-term mortgages are quite flexible in what they can be used for. 

While a traditional residential mortgage is tied to buying a specific home to live in, a bridging loan can be used for all sorts of property-related purposes:

• Preventing a chain break
• Buying at auction
• Bridging a gap between selling and buying
• Funding a do-up-and-sell project
• Downpaying a new home while awaiting funds from elsewhere
• And more

Lenders will consider any purpose as long as there’s sufficient security and a clear outcome.

Short-Term Mortgage While Selling Your House (Chain Break)

One of the main reasons homebuyers turn to short-term mortgages is to handle a property chain break situation. 

In an ideal world, you would sell your current home and use that money to buy your next home seamlessly on the same day. 

In reality, timelines often don’t line up perfectly. Perhaps you found a new house you love and need to act fast, but you haven’t sold your old house yet, or your buyer has been delayed. This is where a short-term bridge loan can save the deal.

With a short-term mortgage while selling your house, you essentially borrow the money to buy the new home, confident that you will pay that loan back once your old home sells. It’s like getting an advance on your home equity. 

According to industry data, using bridging loans to “prevent a chain break” has become the most popular use of bridging finance among homebuyers.

In other words, many people are taking this route to avoid their purchase falling through due to timing issues.

Example:

Suppose your current house is under offer, but the sale is dragging on, and the seller of your new house won’t wait indefinitely. 

If you have enough equity (say you own a large portion of your current home outright), a bridge lender might agree to lend you, for example, 70% of the new house price now.

Often, they will secure the loan against both properties – your existing home and the new home. to feel comfortable about the collateral. 

You complete the purchase of the new home using the bridge loan funds, and you move in. Now you own two houses (temporarily). 

Once your old house sale finally completes, you use the proceeds from that sale to pay off the bridging loan entirely. 

The end result: you managed to buy first, sell later, and still come out fine (minus the financing costs).

Short-Term Mortgage for Flipping Houses

Another common use for short-term mortgages is by property investors or enterprising homebuyers who want to “flip” houses, that is, buy a property, fix it up, and sell it again within a short span for profit. 

Traditional mortgages aren’t well-suited to quick flips. 

Many buy-to-let or residential mortgages have clauses that you can’t sell the property for at least 6 months to a year, and they come with early repayment charges if you settle the loan too soon.

Not to mention, if the property is in very poor condition (say, no kitchen or bathroom), mainstream lenders might not lend on it at all. 

For these reasons, short-term bridging finance is a go-to choice for house flipping projects.

Example:

An investor might find a rundown house for £200,000 that could be worth £270,000 after improvements. 

A bridging lender might lend 70% of the purchase price (so £140k) and possibly even some of the refurb costs, depending on the deal. 

The investor puts in the remaining money as deposit and renovation budget. They spend, say, 4-5 months renovating. 

During that time, they aren’t making any payments to the lender (the interest accrues). After 6 months, the house sells for £270,000. 

From the sale, the investor pays back the £140k plus, perhaps, around £7k in interest and fees (just an illustrative number), and the rest of the sale proceeds is their profit (minus other costs like refurb expenses, stamp duty, etc.). 

This high-cost short-term loan enabled them to quickly buy and sell for gain, which a normal mortgage would have made either impossible or more expensive due to penalties.

Advice: Because short-term mortgages involve substantial sums and can be complex, consult with a qualified mortgage advisor to ensure it’s the right move.

Frequently Asked Questions

How fast can I get a short-term mortgage (bridging loan)?

Short-term bridging loans are known for speed. Some lenders can arrange funds in as little as 5-10 days if all goes smoothly, and a few boast they can do it in a week.

How much can I borrow with a short-term mortgage?

It depends on the value of the property (or properties) you’re using as security and how much equity you have. Bridging lenders typically allow around 70-75% Loan-to-Value (LTV) on the property’s value.

Are short-term mortgage interest rates higher than normal mortgages?

Yes, significantly higher. Short-term mortgages (bridging loans) charge interest by the month, and it adds up. As of 2025, typical bridging interest rates were around 0.8% per month (which is roughly 10% per annum).

Do I have to make monthly payments on a short-term mortgage?

Most bridging loans are set up as interest-only with an option to “roll up” the interest. This means you won’t be paying the loan down or even necessarily paying interest each month.

What if I can’t pay back my short-term mortgage on time?

In many cases, you might negotiate an extension of the loan, essentially giving you a few more months to sort things out, but you’ll likely pay an extension fee or higher rate for that period.

You can also consider refinancing to another lender or a longer-term loan if your original exit plan fails.

Your home may be repossessed if you do not keep up repayments on your mortgage.

All content is written by qualified mortgage advisors to provide current, reliable and accurate mortgage information. The information on this website is not specific for each individual reader and therefore does not constitute financial advice.