A closed bridging loan is one where the exit is already confirmed before drawdown. That confirmation - typically a completed property sale (exchange of contracts) or a formal mortgage offer - gives the lender certainty, and they reward it with lower rates. If your exit is confirmed, a closed bridge is almost always the better-value option.
What Counts as a Confirmed Exit?
- Property sale: contracts exchanged with a buyer, with a fixed completion date
- Remortgage: a formal mortgage offer issued by a regulated lender
- Development refinance: facility agreed in principle with a lender
- Probate/legal proceeds: a court order or legally confirmed distribution
Closed Bridge Rates
| LTV | Rate (pm) | Typical Term | Notes |
|---|---|---|---|
| Up to 60% | 0.55–0.60% | 1–6 months | Best available terms |
| Up to 70% | 0.55–0.70% | 3–9 months | Standard closed bridge |
| Up to 75% | 0.65–0.80% | 3–12 months | Strong exit required |
| Adverse credit, confirmed exit | 0.85–1.1% | Up to 12 months | Specialist lenders |
Common Use Cases
Closed bridging is frequently used in chain-break scenarios: you are buying a new property but your existing property hasn't yet completed. Once your sale is exchanged, the bridge becomes closed and you can proceed with the purchase at lower rates than an open bridge would attract.
- Chain-break finance: purchase before your sale completes
- Below-market purchase: buy quickly at a discount, refinance immediately after
- Probate purchases: funds confirmed from estate, bridge covers the wait
- Very short completion: completion in 2–4 weeks on a known exit
Closed vs Open: Total Cost Comparison
On a £600,000 loan over 6 months, the difference between a closed bridge at 0.60% pm and an open bridge at 0.75% pm is £5,400 in interest alone - before factoring in any fee differences. On a £2m loan, the gap exceeds £18,000. Confirming your exit as early as possible in the process therefore has a direct financial benefit.