Bridging finance for mortgage arrears

Fast funds to stop arrears spiralling

When mortgage arrears build, time matters more than anything. Bridging finance exists for moments like this. It provides short-term funding secured against property so you can immediately clear arrears, pause the repossession process, and regain control. Unlike a traditional mortgage that can take weeks, a bridging loan can complete in days. That speed buys breathing space to reorganise your finances, complete a sale, or refinance once your position stabilises.

Recent UK market data supports this route. Bridging lending reached a record £278.7 million in Q3 2025, up 14.9% on the previous quarter. Average monthly interest sat around 0.91%, with average loan-to-value near 59.2%. Chain breaks alone accounted for 22% of loans, underlining the role of bridging in keeping transactions alive when timings slip. About 40% of the market is now regulated, which increases consumer protections and confidence. That matters if you are wary of high-risk borrowing.

Encouragingly, mortgage arrears have ticked down by 1.3% in Q3 2025, and possessions remain low. Yet many households still face gaps caused by rate resets, slow conveyancing, or temporary income shortfalls. Bridging is increasingly used by homeowners, not just investors, precisely because it can meet those urgent cashflow needs quickly and flexibly.

Speed stops the clock. A swift bridge can prevent escalating fees and preserve equity.

A well-structured exit is vital. Most borrowers repay bridging through a sale, a remortgage, or specialist refinancing. Without a clear exit, costs can mount and default risks rise. Used correctly, though, bridging can be the practical route that protects your home and your credit profile while you move to a longer-term solution.

A short-term bridge, used for the shortest possible period, can be the difference between compounding stress and a managed recovery.

Who benefits most

If you have mortgage arrears and a credible way to repay within 3 to 12 months, bridging may fit. That includes homeowners awaiting a sale to complete, landlords refinancing buy-to-let portfolios, and buyers facing chain delays. It also helps where you need to consolidate debts rapidly or settle with your current lender to stop possession action. Borrowers with complex circumstances or recent blips on their credit file may find specialist lenders more flexible than high street banks. If your exit is realistic and provable, bridging can turn an urgent arrears problem into a manageable timetable.

Your bridging options at a glance

1. Regulated residential bridge - suitable for your home, with consumer protections.

2. Unregulated investment bridge - for BTL or commercial property purposes.

3. First charge bridge - replaces your existing mortgage for maximum flexibility.

4. Second charge bridge - sits behind your current mortgage to release funds.

5. Rolled-up interest - no monthly payments; interest added to the loan balance.

6. Serviced interest - pay interest monthly to reduce total cost.

7. Multi-property security - secure against several properties to achieve up to 100% finance within an overall 75% LTV.

8. Re-bridging - extend the term if your exit is delayed, subject to status.

Next steps:

• Clarify your exit route and timeline.

• Gather documents early to accelerate underwriting.

• Ask for both serviced and rolled-up quotes to compare cost.

What it costs, the impact, and key risks

Eligibility in plain English

Eligibility is broader than for standard mortgages. Lenders focus on your property, equity, and exit strategy. Expect close attention to the security’s value, your total borrowing versus value, and whether the exit is deliverable on a conservative timeline. If you are selling, agents’ appraisals and evidence of marketing help. If you plan to refinance, an agreement in principle with a specialist lender strengthens the case, especially if you have recent arrears or adverse credit.

Income is less central where interest is rolled up, but affordability still matters if you choose serviced interest. Credit blips do not automatically disqualify you. Many specialist lenders use manual underwriting and will consider recent arrears where the bridge resolves them. At Kandoo, we work with a panel that caters for complex scenarios, including second charge bridges and multi-asset security to keep overall LTV within 75% while raising up to 100% of the requirement.

Property type, condition, and location influence appetite and pricing. Regulated bridges on your main residence carry more oversight, which can offer added peace of mind. Be prepared to verify identity, ownership, arrears statements, and any legal notices so solicitors can move quickly.

From application to completion

1. Outline your goal, arrears, and preferred exit.

2. Provide property details and estimated market value.

3. Receive indicative terms and choose interest method.

4. Submit documents for underwriting and valuations.

5. Legal checks run in parallel to speed completion.

6. Sign the offer; lender draws funds to redeem arrears.

7. Execute the exit via sale or refinance as planned.

8. Set contingencies if timelines slip unexpectedly.

Trade-offs to weigh up

Look before you leap

Bridging should be a measured decision. Start with the exit and work backwards. If you are selling, price realistically and monitor buyer progress weekly. If you are refinancing, line up documents for a specialist lender early and consider a backup route. Read the offer carefully, including default interest, additional fees, and any rights to appoint receivers. Keep your current lender informed once arrears are cleared so charges stop accruing. If timelines slip, address it early with your broker to explore a re-bridge or partial repayment. Independent legal advice is essential, particularly where multiple properties are involved.

Alternatives you might consider

1. Payment arrangement or forbearance with your current lender.

2. A specialist remortgage accepting recent arrears and adverse credit.

3. Second charge loan instead of a full refinance.

4. Managed sale with a realistic price and short completion window.

5. Debt advice and budgeting support to stabilise cashflow.

Common questions, clear answers

• How quickly can a bridge clear my arrears? In many cases within days once valuation and legal work are complete. Speed depends on your documents and property readiness.

• Will poor credit stop me? Not necessarily. Many specialist lenders accept recent arrears and underwrite manually. A strong exit plan can be more important than a perfect score.

• What will it cost monthly? If you choose rolled-up interest, there may be no monthly payments. With serviced interest, budget for the monthly rate multiplied by the loan size.

• Can I borrow 100% of what I need? Potentially, if you secure against multiple properties and keep your overall LTV at or below 75%.

• What if my sale or remortgage is delayed? Speak to your broker early. Re-bridging may be possible, but costs can rise, so build contingency time into your plan.

• Is a regulated bridge safer? It carries additional consumer protections and oversight, which many homeowners value when borrowing against their residence.

How Kandoo supports your next move

Kandoo is a UK-based retail finance broker with access to specialist lenders experienced in arrears cases. We match you to regulated or unregulated bridging, structure the right charge and interest method, and keep legal work moving so funds arrive quickly. Our role is to stress test your exit and help you protect your home and equity.

Important information

This guide is for information only and is not advice. Bridging loans are secured against property and may result in repossession if you do not keep up repayments or fail to execute your exit. Seek independent legal and financial advice.