When it comes to mortgage options, most people are familiar with traditional long-term mortgages. However, there is another type of mortgage that may suit specific situations: the short-term mortgage. In this article, we will explore the concept of short term mortgage, their characteristics, and when they might be beneficial for borrowers.

Understanding Short-Term Mortgages:

Short term mortgages, also known as bridging loans or bridging finance, are designed to provide temporary funding for borrowers until a more permanent financing solution can be arranged. They are typically used when there is a gap between the purchase of a new property and the sale of an existing one or when quick access to funds is needed for a specific purpose.

Characteristics of Short-Term Mortgages:

  1. Temporary Solution: Short-term mortgages are intended as a short-lived solution, usually lasting between a few months to a couple of years. They are not intended for long-term financing but serve as a bridge to overcome temporary financial gaps.
  2. Quick Access to Funds: One of the main advantages of short-term mortgages is the expedited approval and funding process. Lenders of short-term mortgages often focus on the value of the collateral property rather than the borrower’s creditworthiness. This allows borrowers to access funds quickly, which can be crucial in time-sensitive situations.
  3. Higher Interest Rates: Due to their temporary nature and potentially higher risk, short-term mortgages typically come with higher interest rates compared to long-term mortgages. Borrowers should carefully consider the cost implications and ensure that they have a clear plan to repay the loan within the agreed-upon term.

When to Consider Short-Term Mortgages:

  1. Property Chain Break: If you are purchasing a new property but have not yet sold your existing one, a short-term mortgage can provide the necessary funds to bridge the gap between the two transactions. This allows you to proceed with the new purchase while waiting for the sale of your current property.
  2. Property Auctions: Short-term mortgages can be useful when participating in property auctions, where immediate funding is often required upon winning a bid. These mortgages offer a way to secure the necessary funds quickly, allowing you to complete the purchase within the auction timeframe.
  3. Property Renovations: If you are planning substantial renovations or refurbishments on a property, a short-term mortgage can provide the necessary funds upfront. Once the renovations are complete, you can then secure long-term financing or sell the property.
  4. Property Development: Short-term mortgages can be beneficial for property developers who need funding for the acquisition and initial stages of a development project. Once the development is completed or reaches a specific milestone, the property can be refinanced or sold.
  5. Business Purposes: Entrepreneurs or small business owners may consider short-term mortgages to secure quick financing for business purposes. These mortgages can be used to bridge gaps in cash flow, fund business expansion, or take advantage of time-sensitive investment opportunities.


Short-term mortgages provide temporary funding solutions for borrowers facing specific circumstances. Whether bridging a property chain break, participating in property auctions, funding property renovations, or meeting business needs, short-term mortgages can offer quick access to funds. However, it’s crucial to carefully consider the terms, interest rates, and repayment plans associated with short-term mortgages before proceeding. Consulting with a can provide valuable guidance and help determine if a short-term mortgage is the right choice for your unique situation.

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Zain Taylor