Bridging loan calculator explained
Our bridging loan calculator makes working out your total costs simple. It functions in a similar way to a standard mortgage calculator but allows you to analyse both your monthly interest and total costs.
It’s worth noting that we do not have the option to include a broker fee on our calculator. This is because we never charge a broker fee for loans over £100,000. If you’re considering taking bridging finance through another broker, you may need to add their upfront fees and broker fees to your total costs.
We will never charge you upfront application fees for arranging a bridging loan and never add hidden charges to your loan.
How is the monthly interest paid?
There are two common options here, adding it to the loan and repaying it at the end, or paying monthly.
Making monthly payments may mean that you end up paying less back in the long run, but can put a strain on cash flow. This can be a problem for many borrowers, especially those paying higher interest rates.
For this reason, most loans have the interest added to the loan. Almost all lenders accept this option, while most are happy with either.
Where you plan to pay the interest monthly, you must provide evidence of your income to ensure it’s affordable.
How long do bridging loans take to set up?
Bridging loans can be arranged very quickly, sometimes within as little as 48 hours. On average, applications can complete 10-14 days. Some lenders may take a little longer, with applications taking up to 21 days. This should be covered upfront to ensure your completion deadline is realistic.
What are typical bridging loan rates?
Rates start from 0.43% per month, for applications up to 50% loan to value. A typical rate is hard to give as each loan is different, however, many of our bridging loans are offered at 0.48% per month or less.
For more complex applications or loans at higher loan to values, rates will increase. Despite this, we are usually able to arrange loans against residential properties at 0.85% per month or below.
Who would qualify for a bridging loan?
Loans can be arranged for most applicants due to the increased flexibility of bridging finance lenders. There are lenders out there for almost any situation, regardless of credit history, age or the security offered.
Should I work with a bridging loan broker?
This depends on your circumstances and what you’re looking for. Bridging loan brokers can quickly compare the market to secure you the best quote, saving you time and money, but may charge large fees for their services (although we don’t charge broker fees for bridging loans).
An efficient broker will save you time and can make the process easier to manage, an inefficient broker may make the process slower and more difficult.
The bridging finance market is very specialist, so it’s important that you only enlist the help of an expert if you do choose to work with a broker.
Regardless of the route taken, we always recommend that you don’t hand over upfront fees to a broker.
What else should I consider?
Besides securing the best rates and fees, always make sure you’re going to be working with a reputable lender. Things don’t always go according to plan and this must be considered upfront.
Before completing on a bridging loan, make sure your exit is realistic. You should also check what happens if you’re late repaying your loan. Some lenders charge very high default rates and may even apply these back to the start of the loan. This should always be checked upfront to ensure the risk to yourself and your family remains at a minimum.
Comparing us with other brokers
We are totally transparent in our product offerings. ABC Finance Ltd. never charge broker fees for loans over £100,000 and will never charge you upfront application fees or add hidden charges to your loan. We can also offer you expert advice and recommend the most suitable product for your needs.
Alternatively, why not head over to our comparison tool to check the latest rates, select your own bridging finance product and apply online.