Bridging Loans Calculator

Our bridging loan calculator is simple to use and can help you
work out the likely costs of taking out a bridging loan, including any fees and
interest charges. Simply fill out the fields below for an instant result.

CALCULATOR

Our calculator is designed to show indicative costs only and
in order to get more accurate information you will need to speak to our brokers
as each bridging loan is completely different.

With bridging loans from £10,000 – £250 million available, our
brokers can provide fast, short term finance to help with the purchase of property
or land. Our bridging finance is usually offered with 1 to 12 month terms, and
most applications complete anywhere between 5 – 14 days.

Bridging loans are used to bridge the gap between property transactions
and can be useful when cash flow is an issue, but assets are not, or when the
property your wanting to purchase is in need of refurbishment and is unable to
secure a mortgage until works are complete. There are many other situations
where a bridging loan is suitable, and due to the speedy nature of the financing
and simple application process it is often an appealing option.

Some common scenarios where a bridging loan can be used are:

 

  • Property Auction purchases
  • Raising capital for a development opportunity
  • Self-build projects
  • Purchasing a new property, with the deposit
    required being tied up in another property awaiting sale
  • The seller is looking to only accept offers from
    cash buyers or those not involved in a chain
  • Preventing repossessions

Bridging loans can become complex with different criteria requirements
from each lender. Our brokers have many years of experience dealing with bridging
loans across a variety of situations, and their vast wealth of knowledge will help
place your finance requirements with the most suitable lender and allow for a quick
and hassle-free process.

Before looking at bridging finance it’s important to be
aware of both the pros and cons to ensure it’s the right option for you.

Pro’s

 

  • Quick application and pay-out
  • There are no monthly payments required when the
    interest is rolled up or deducted
  • Interest rates are now some of the lowest they’ve
    been, due to increased competition within the lender market meaning less costs on
    the borrowing
  • You can borrow against properties which aren’t
    eligible for a standard mortgage, meaning development opportunities can be
    accessed using this finance
  • You only pay for the interest incurred over the length
    of time you need, so if you pay off the loan early any unused interest is
    generally rebated.

Cons

 

  • If you face any issues in how you plan to repay
    your bridging loan, this can become a major problem as the loan will need to be
    refinanced or serviced (although not all lenders allow this). This could affect
    your credit profile and place your secured property at serious risk.
  • Regardless of how little your bridging finance costs,
    it still adds to your property transaction – so the overall total needs to be
    considered beforehand
  • Not all lenders off the same so it can be difficult
    to compare quotes, as there are a variety of different terms and fees some
    lenders include, such as ‘fund management fees’ or ‘inspection fees’. Make sure
    you consider the overall cost of the loan rather than the interest rate or
    headline figures, to ensure you’re getting the right one for you.

The single biggest risk with using bridging finance is the
proposed repayment method. As the interest is rolled into the final payment
rather than monthly instalments, there is only one opportunity for default,
which is at the end of the agreement. Ensuring sufficient funding is available is
crucial when the finance term is coming to an end, whether this is from a sale
of property or land, or whether you plan to repay through refinancing. It is
worthwhile understanding the market fully before opting for bridging finance if
you plan to use the sale of a property or land to pay off the loan. You will
need to consider a realistic and likely sale price to ensure the total amount
is covered, including interest and fees.

Our brokers are experts in bridging finance and will be able
to help you understand what your options are, as well as advising on what’s
available along with any related fees. They will also go through your proposed
repayment plan and outline any potential issues which could arise, to ensure
you are happy with the risks involved.

It is important to consider the full length of time needed
for bridging finance, especially if you are proposing to sell a property or
land to cover the repayment amount. Often people want to go for the shortest
timeframe possible to try and reduce the interest paid, however delays are
often common in property and land sales, meaning there’s a strong possibility
of missing the loans end date if the term length isn’t sufficient.

Our brokers work with a number of lenders from across the
market, meaning we have lots of choice when it comes to finding the right one
for you. Each lender has their own criteria, so knowing what they accept and more
importantly what they don’t means we can select the most suitable lender to match
your circumstances for a quick and easy process.

In most cases we can secure bridging finance regardless of
credit history. Interest rates may be slightly higher for those with a particularly
bad credit history due to the fact that not all lenders will be prepared to lend
under those circumstances.