![]() Interest rates are linked to the Bank of England base rate. For example, a 50-60% LTV will get you a much lower interest rate than a 75% loan, and a 100% bridging loan would be the most expensive. The lower the ratio, the lower the interest rate you pay. This is the ratio of the loan amount you need concerning the value of your property. Thank You for your interest - please complete the form below and a member of our team will be in contact.īook Consultation » 6 things that affect your bridging loan interest rate: ![]() Our clients often find that they entirely cover the cost of their bridging loan from the profit they make on refurbishing their property and getting its full value on the market when they sell. You can pay back your bridging loan anytime, and you'll only pay interest up to the day you repay.ĭon't forget you can include the cost of any property refurbishments in your bridging loan, so you have sufficient funds to improve your property aesthetically before selling it (or even do significant work like an extension or a new kitchen). This isn't to disguise the rate because you may not have the short-term loan for as long as a year.Īnd after the minimum term of the first month, interest is calculated daily. This is an "it depends" cost: see below for the factors determining the monthly interest rate you're offered.īridging finance interest is quoted as a monthly rather than an annual rate. This is the top-line loan cost you'll be looking at first. So, what are the costs of a bridging loan? Bridging loan interest rates We secure bridging finance for applications of all types, and we negotiate competitive lending to meet your needs and timescale.Īnd while you're here, read our complete guide to bridging loans. Let us do all the hard work of finding the right bridging lender for your circumstances. Or, it could buy a house that's considered "unmortgageable" by mainstream lenders.įor more details, watch our video: Bridging Loans Explained: Costs, Timescales, Examples, & How To Get One. Particularly for clients who are downsizing and have built up a sizeable amount of equity on a home they're selling (or who own it mortgage-free) and have found their dream home that they can't miss out on - the set-up fees and interest cost of a bridging loan is money well spent on the home they plan to live in for ten years or more.Īnd if you're working your way up the property ladder, hoping to buy a property cheap at auction, or taking on a project that needs a lot of renovation work, bridging finance may be your best and only option to get short-term finance set up in time. And they aren't all multi-million-pound developers with bottomless pockets. We have many clients for whom bridge finance has been the best, if not the only solution - and they haven't resented the costs. When do I pay the charges for a bridging loan? How is interest charged on a bridging loan?ĥ bridging lender fees you could be charged 6 things that affect your bridging loan interest rate Written by: Sam O'Neill & Sam Hodgson In this guide: So, here's our straightforward guide to everything you need to know about how much a bridging loan costs. We're not here to twist your arm: no responsible broker will persuade you to take on borrowing that you can't afford. It's a longstanding myth amongst first-time bridging borrowers that short-term property finance is woundingly expensive. We'd like it to be less complicated, but we can't reorganise the entire property finance industry. ![]() In fact, if a bridging loan secures your property purchase at the best price because you can act fast, it can even save you money.Īnd the upside is that you secure the property - which for many buyers is invaluable.īridging loan costs come through several fees and admin charges. This might seem like a lot, but on the whole, bridging loans can cost less than you might expect - especially if you're using one for the right reasons. Other admin fees, such as drawdown and redemption fees. ![]() Bridging loans typically cost 1-2% of your loan size, charged as an arrangement fee by your lender.
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