What is a regulated bridging loan?
A regulated bridging loan is short-term secured credit that meets the legal test for a regulated mortgage contract. Occupation or intended occupation of the secured land as a dwelling by the borrower or a related person is central to that perimeter, but the definitions, exclusions and facts matter. Ask an FCA-authorised mortgage adviser or solicitor to classify the proposed facility.
A property-investment purpose does not automatically make a facility unregulated, and using a company or second charge does not by itself answer the perimeter question.
Regulated versus unregulated: questions, not shortcuts
| Question | Why it matters |
|---|---|
| Who is the borrower? | Consumer, trustee and corporate structures can alter the analysis |
| What property secures the loan? | Regulation relates to the secured land, not only the property being bought |
| Who occupies or will occupy it? | Borrower/related-person dwelling use is a key part of the test |
| What is the business purpose? | Business buy-to-let and commercial activity can engage different provisions |
| What is the term and exit? | Bridging treatment and responsible-lending assessment depend on the actual contract and exit |
Exit-strategy evidence
For a sale exit, model a realistic marketing and conveyancing period, net sale proceeds and a lower-value case. For refinance, obtain a credible term-product scenario, check affordability and criteria, and allow for valuation, works, legal and underwriting delay.
Use the bridging cost calculator to distinguish net advance, retained/rolled/serviced interest and fees. The calculator does not decide whether a loan is regulated.
Questions for an authorised broker
- Why is this facility classified as regulated or unregulated?
- What property and occupier facts support that conclusion?
- What is the gross facility and actual net completion advance?
- Is interest retained, rolled up or serviced, and does it compound?
- What evidence supports the exit and what happens if it is delayed?
- Which fees, minimum-interest periods, default terms and early-repayment rules apply?
Primary references
- FCA Handbook glossary: bridging loan
- FCA Handbook: MCOB responsible lending
- FCA Financial Services Register
Reviewed 26 August 2026. This article does not classify any proposed loan and is not mortgage or legal advice.
