Open vs closed bridging loans
Bridging loans come in two main forms: open and closed. The distinction is about when you plan to repay the loan, and it significantly affects the interest rate you pay and the level of risk involved. This guide explains both types and helps you decide which is appropriate for your situation.
In this guide
What is a closed bridging loan?
A closed bridging loan has a fixed repayment date. You know exactly when you will repay the loan because your exit strategy is already confirmed — for example, you have exchanged contracts on the sale of your current property and have a confirmed completion date, or your remortgage has been formally approved and a completion date is set.
Closed bridging loans carry lower interest rates than open loans because the lender has greater certainty that the loan will be repaid on time. They are considered lower risk for both the borrower and the lender.
What is an open bridging loan?
An open bridging loan does not have a fixed repayment date. You have an exit strategy — for example, you plan to sell your current home — but you do not yet have a confirmed date for when that will happen. The loan has a maximum term (usually 12 months), but you can repay it at any point within that period.
Open bridging loans are more expensive because the lender faces more uncertainty about when they will get their money back. However, they offer greater flexibility and are suitable when your exit strategy is credible but the timing is not yet locked in.
Rates and costs comparison
Closed bridging loans typically start from around 0.4% to 0.7% per month, while open bridging loans start from around 0.6% to 1% per month or higher. The difference may seem small on a monthly basis, but over several months on a large loan it adds up to a significant sum.
Both types carry similar arrangement fees, legal costs, and valuation fees. The interest rate is the main cost difference. Always calculate the total cost of the loan including all fees, not just the headline interest rate, when comparing products.
Which type should you choose?
Choose a closed bridging loan if you have a confirmed and dated exit — for example, you have exchanged contracts on a sale. The lower rate will save you money and the fixed timeline reduces your risk.
Choose an open bridging loan if your exit is planned but not yet confirmed — for example, your property is on the market but you haven’t yet found a buyer. Be realistic about the timeline and make sure you can afford the higher interest rate for the full maximum term, just in case.
Get the right bridging loan with Clearview
At Clearview Mortgage Solutions, we’ll assess your exit strategy and recommend whether an open or closed bridging loan is appropriate. We compare products across specialist lenders to find the most competitive rate for your situation.
Contact us for a free, no-obligation discussion about your bridging finance needs.
Related guides
More guides in our bridging loans mortgage hub.
Speak to an Expert
Our calculators give you a useful estimate, but your actual mortgage and protection options depend on your full circumstances, credit history and lender criteria. Clearview Mortgage Solutions’ FCA regulated—our CeMAP-qualified advisers are on hand to explain how each calculator applies to you and to help you compare real mortgage quotes from 90+ UK lenders.
Get the right mortgage first time
90+ UK lenders · 10,000+ products
Speak to a mortgage adviser today
FCA-authorised, CeMAP-qualified. Free, no-obligation consultation.
Instant comparison from 90+ lenders. No obligation.
Clearview Mortgage Solutions
Get in contact
That's you!
Would recommend
84%
First visit
16%
Higher approval confidence
90+
UK lenders
10,000+
Products
Of our clients get the right mortgage first time
We focus on clear communication, realistic timelines and finding the right product, not just the lowest headline rate.
Get your mortgage quote
Instant comparison from 90+ lenders. No obligation.
Speak to a mortgage adviser today
FCA-authorised, CeMAP-qualified. We'll find the right product for your situation.
Speak to us
Get in contact for expert mortgage advice