Bridging Loan Calculator

What is a Bridging Loan Calculator?

Use our bridging loan estimator to calculate potential borrowing expenses based on your individual requirements.

Request a free quote that includes expected interest rates, lender charges, valuation fees, broker fees, and administrative costs.

Please note that the final costs could changes depending on your individual circumstances, our tool gives your a starting point based on common figures.

Our calculator helps you estimate costs for projects like buying a new home, selling your current one, or renovating a property.

How to use our calculator

• Input the property value: Enter the value of the security property.
• Input the loan amount: Enter the amount of money you need to borrow.
• Input the loan term: Enter the length of time you need the loan for (in months).
• Input the interest rate: Enter the interest rate you’ve been quoted, or use our suggested rate
• Click on the ‘Calculate‘ button.

The calculator will then show you the following information:

• The maximum amount you can borrow: This is based on the loan-to-value (LTV) ratio, which is the percentage of the property value that the lender is willing to lend you.
• The monthly interest payment: This is the amount of interest you will be charged each month on the loan.
• The total cost of the loan: This is the total amount of interest and fees you will pay over the life of the loan.

Bridging loan rates starting from 0.55%

See how much a £100,000 bridging loan might cost using the table below. Want to try a different figure? Use our calculator for a quick estimate. For exact costs and advice, book a call with one of our experts. They can explain interest rates and answer your questions.

Bridging loan eligibility

Each lender will have its own set of bridging financing standards that a borrower must meet to be approved for a loan. The following categories are the most common:

• A private person, partnership, or limited corporation.
• Over the age of 18: Some lenders have an upper age limit.
• Live or have a registered address in the United Kingdom.
• One or more properties which the loan can be secured against. This is known as a “security”.
• Has a clear exit strategy in place, such as selling the property or refinancing.
• Wants to borrow at least £20,000.
• Employed, self-employed, or retired.

Note: While security is necessary, your credit score and income are often not factors in a decision for a bridging loan.

What type of property will be needed for security?

When securing a bridging loan, various types of property can be used as security, including:

• Residential properties for example; houses, flats, bungalows, and houses with multiple occupants.
• Commercial properties such as retail unites, restaurants, takeaways and offices.
• Properties in need of significant repair.
• Projects that are in various stages of completion.
• Land holdings.

This wide range of options means you can use different types of property to secure your loan, depending on what you own and how much you need to borrow. Multiple properties can be used to secure your loan.

A survey based on the reasons why a bridging loan was taken out showed the following:

When to work with a broker for bridging loans

Deciding between a lender and a broker depends on your loan requirements. Brokers offer wider lender options, expertise in navigating the application process, and potentially better deals, but charge fees. Direct lenders can be cheaper, but they require more legwork and there are limited lenders that you can go to directly.

Cutting the cost of a bridging loan:

To reduce the cost of your bridging loan, consider using a broker such as UK Property Finance to negotiate better terms with lenders. If you’re buying one property and selling another, using both a security can often lower your borrowing costs. However, remember that any existing mortgage on these properties will impact the overall loan amount you can borrow.

Bridging loan interest calculation:

Bridging lenders have several methods for calculating, charging, and rebating interest. The information that follows applies to the great majority of the resources that we offer:

Interest is rolled up:

• Interest is charged on the balance outstanding.
• Interest payments are not needed, thus the monthly interest charge is added to the account balance each month.
• Compound interest will raise the balance that remains every month.

Paying the loan earlier:

• Bridging loans are often set up with 12-month maturities, with no early redemption fees.
• The minimum loan duration is usually one month ( thirty days ), which means you’ll may interest for the month, even if you repay earlier.
• After the first month, you’ll only pay interest for the days you have the bridging finance. For example, if you repay after 3 months and 10 days, you’ll pay interest for 3 full months and 10 days.

Administrative fee:

If the loan is taken out, the lender will levy an administrative fee of around £295. This is not an application fee; it is payable only if you take out the loan.

Lenders arrangement fees (otherwise known as lender facility fees)

Most lenders charge a 2% setup/administration fee. This fee is usually calculated based on the total or net loan amount. This is usually added to the loan but you have the option to pay upfront.

Valuation fees:

These costs vary depending on the value of the property(s) being used as security. The location and estimated value are also important considerations. Our calculator offers an estimate for the cost of the valuation for mortgage purposes. Desktop valuations are less costly and quicker to do; therefore we use them wherever possible.

Redemption charge:

Some lenders impose a redemption fee when a loan is redeemed. This is the legal expense of removing the charge from the secured property.

Solicitor fees:

The lender hires a solicitor to handle the loan contracts and places a charge on the security property. The costs associated with this are charged to the applicant. Our calculator provides an idea of the amount paid for lenders’ legal expenses.

Securing a Bridging Loan

A bridging loan helps cover financial gaps between property sales and purchases. Here’s a streamlined process:

1. Research: Find a reputable bridging finance broker, such as through Trustpilot.
2. Application: Contact your broker, stating the amount, property value, loan purpose, and repayment plan. Additional information may be requested.
3. Exit Strategy: Have a clear exit plan (e.g., property sale or long-term mortgage) to repay the short-term loan.
4. Loan Offer: Upon review, the lender issues a formal offer detailing terms, interest, and fees.
5. Legal Due Diligence: Work with solicitors to review and verify the loan agreement, property ownership, and legal clearances.
6. Acceptance: Sign the agreement and submit any required documentation.
7. Funds Released: Once cleared, the lender releases the funds for your intended purpose.
8. Exit Strategy Execution: Repay the loan using your chosen exit strategy, such as proceeds from a sale or mortgage.
9. Loan Closure: Upon repayment, you will receive a confirmation of account closure and the release of any securities.

Loan amounts are based on LTV, and interest rates vary by lender.

Why use UK Property Finance?

The era of rigid, automated loan approvals is a thing of the past. Here’s how we can assist you:

• Conducting comprehensive case reviews to find the best lender and product tailored to your needs.
• Efficiently processing applications.
• Offering expert recommendations to guide your financial decisions.
• Providing specialised advice from industry professionals.
• Granting access to a wide range of lender products, including exclusive options not available elsewhere.

Our approach ensures personalised support and access to diverse financial solutions, surpassing traditional, inflexible lending practices.

About UK Property Finance

Here’s how we excel at delivering exceptional service:

• In-depth understanding of cutting-edge products featuring competitive rates.
• We offer a diverse array of lending alternatives tailored to your unique needs.
• Consistently achieving favourable results.
• Innovative problem-solving capabilities, thinking creatively to find solutions.
• Dedicated, personalised service from a team committed to your success.

How to get started?

If you think a bridging loan could suit your needs, go ahead and schedule a call with us through the form below. Our friendly advisors are here 7 days a week to advise you.