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Bridging Loan Rates

If your enquiry is made during normal working hours, we can provide an initial decision over the phone within minutes. We’ll follow this up with an email, typically within an hour. If you choose to proceed, we’ll prepare your finance package and send it to you, either by email or post, outlining the required documents and other necessary details. Once we receive the completed package and any outstanding information, we’ll process your case through to completion.

In most cases, you can expect to receive your funds within 5 working days. However, for more complex cases, the process may take longer. While some websites claim to offer funding within hours, it’s important to note that a bridging loan follows a similar process to a mortgage, so receiving funds within such a short time frame is highly unlikely.

The recent credit crunch has made lenders more cautious, with a primary focus on ensuring they are repaid as agreed. Any lender wants a high level of confidence in the repayment plan before proceeding.

Common repayment options include:

• Refinancing the property for a higher amount than the bridging loan.
• Selling the property for more than the outstanding loan balance.

If a lender is satisfied with the repayment strategy and security, they’re more likely to approve the loan. However, if they have concerns about the exit route, they may be less inclined to lend the funds.

The amount you can borrow with a bridging loan typically depends on the value and type of property you use to secure the loan. For FCA-regulated bridging loans secured against your primary residence, most lenders will offer up to 70% Loan-to-Value (LTV). However, if the property is not your primary home, you could be eligible for up to 75% or even 80% LTV.

These LTV figures account for the total loan amount, including borrowing costs and interest charges. The net loan amount (what you actually receive) is usually around 5% to 10% less than the total amount approved.

If you’re looking to borrow up to 100% of a property’s market value, some options are available, but you’ll likely need to provide additional security to make the loan viable. For instance, if you’re buying a property for £250,000 and need to borrow the full amount, a lender might consider advancing the full sum if you can offer another property as collateral. This could be a residential or commercial property valued at £250,000 or more, either owned outright or with a small existing mortgage.

Example Scenario:

• Property you want to buy: £250,000
• Bridging loan required: £260,000
• Additional security (another property): £250,000
• Outstanding mortgage on additional security: £30,000
• Total security value: £500,000 (£250,000 + £250,000)
• Total loan amount: £290,000 (£30,000 mortgage + £260,000 loan)

In this example, the bridging loan of £290,000 represents a 58% LTV, which most lenders would consider acceptable.

It’s important to note that interest charges and other fees are typically not repaid until the end of the loan term, meaning the total amount owed will grow over time. By the time the loan is fully repaid, the total amount—including interest and fees—could be 5% to 10% higher than the original net loan amount.

In some cases, using more than one property as security can make your loan more affordable, as lower LTV loans tend to come with better rates than higher LTV options.

When calculating the maximum LTV, lenders typically factor in arrangement fees, other borrowing costs, and any retained interest expected over the loan period.

Bridging loans are designed as short-term financing, and most lenders expect the loan to be repaid in full within the agreed timeframe. One of the first things a lender will want to know is how you plan to repay the loan—this is known as the exit strategy. Lenders are unlikely to approve a bridging loan without a clear and viable exit plan in place. Common exit strategies include selling a property or refinancing the loan.

If you have already exchanged contracts on a property sale and are just waiting for the funds to come through, that’s a perfectly acceptable exit strategy for most lenders. However, if you’re relying on securing long-term finance to repay the bridging loan, the lender will want to be confident in your ability to secure that financing. They may carry out a credit check to assess your chances of approval.

Even with a strong credit history, unforeseen issues can arise, and you might struggle to repay the loan on time. To mitigate this, lenders often contact borrowers a few months before the repayment date to assess their ability to settle the loan. If you’re unable to repay, they may offer suggestions, such as lowering the asking price of a property you’re selling to help speed up the sale.

Maintaining regular communication with your lender is crucial, especially if you encounter unexpected financial difficulties. By keeping them informed, you can increase your chances of avoiding repossession and may be able to find a solution that allows you to retain the assets used as collateral. It’s always best to notify your bridging finance provider as soon as possible if you anticipate any repayment challenges.

The process is typically quick, with most applicants experiencing the following timeline:

• Decision to lend: Typically within 48 hours.
• Formal loan offer: Around 2 weeks.
• Loan completion: Usually between 2 to 4 weeks, depending on your specific needs and circumstances.

These timeframes are general estimates and can vary based on individual circumstances.

Bridging loans are typically repaid within 6 to 7 months, although the loan term can range from as little as 24 hours to up to a year. In some cases, bridging finance can be arranged for longer periods, such as 18 months or more, depending on your specific borrowing needs.

The cost of borrowing with bridging finance largely depends on factors such as the loan-to-value (LTV) percentage, the type of security you can provide, and your credit score. As a top UK bridging loan broker, we specialize in securing the most competitive rates for you by accessing a wide range of lenders offering tailored financing solutions to meet your specific needs.

Bridging loans generally do not include early repayment charges, unlike most mortgages or other secured borrowing products. If an early repayment penalty applies, it will be clearly disclosed to you during the loan application process.

Bridging loan lenders focus mainly on the security you can provide and the viability of your exit strategy. If you have sufficient equity or collateral to cover the loan and present an acceptable exit plan, obtaining bridging finance is usually achievable, even with a less-than-ideal credit score.

In some cases, bridging lenders can offer second-charge loans using an equitable charge. This approach allows the second-charge lender to secure their interest fully without needing consent or approval from the first-charge lender.

In most cases, bridging lenders may request minimal proof of income, but this isn’t always mandatory. Since bridging loans are repaid in full at the end of the term, demonstrating monthly income is usually unnecessary, provided you have a solid exit strategy and sufficient assets to cover the borrowing costs.

Bridging loans are versatile and can be used for any purpose the borrower deems necessary. Common uses include property refurbishment, development projects, purchasing a new home while awaiting the sale of an existing property, settling tax liabilities, or addressing business-related cash flow challenges.

As a leading UK bridging loan broker, we collaborate directly with a wide network of mainstream lenders and private investors who are ready to lend when applicants present sufficient security and a clear exit strategy. Our strong relationships with lenders allow us to expedite the application process, ensuring your urgent financing needs are met promptly.

Bridging loans are commonly secured against property assets, including residential properties, commercial real estate, land, or building plots. For higher loan-to-value (LTV) requirements, multiple properties can also be used as security.

Yes, we offer flexible bridging loan solutions tailored for individuals with CCJs, arrears, or defaults. Even if you have a history of bankruptcy, approval is still possible, provided you can offer suitable property assets as collateral.

Yes, you can. As an FCA-authorised and fully regulated bridging finance provider, we offer both first- and second-charge loans. In certain cases, we can also provide financing secured on a third-party basis, as long as there is adequate equity in the property being used as collateral.

We typically do not require clients to cover any upfront borrowing expenses or arrangement fees. However, if you cannot provide a valid valuation report, you may need to cover this specific cost.

Most lenders charge an arrangement fee once the bridging loan is approved, meaning no fee is due if your application is declined. While we do not impose upfront application fees or hidden costs, you may need to cover the cost of a valuation report. Additional expenses, such as legal fees and interest charges, are usually added to the loan amount and repaid at the end of the loan term.

Yes, as long as you have sufficient remaining equity in your property and have not defaulted on the terms of your original bridging loan, you can arrange additional financing on top of the initial loan facility.

Yes, you can. Making early capital repayments is entirely acceptable, and any amounts repaid ahead of schedule will help lower your monthly interest charges.

Yes, your details are completely safe with UK Property Finance. We will never share your information with third parties or sell it to advertisers or marketing companies.

A closed bridging loan is a short-term financing option with a defined exit strategy in place to repay the loan at the end of its term. It is commonly used for projects like property refurbishments.

An open bridging loan is a short-term financing option used when the borrower does not have a clear exit strategy in place. For instance, you might need funds to purchase a new property while waiting for the sale of another to repay the loan. Due to the higher risk for lenders, open bridging loans have lower approval rates and typically come with higher borrowing costs compared to closed bridging loans.

While bridging loans and development finance share similarities, they differ in key aspects. Bridging loans are typically short-term, lasting from 1 day to 12 months, while development finance can extend up to 3 years or more. The main distinction lies in fund disbursement: bridging loans are usually approved and released in full at the start of the loan term, whereas development finance is disbursed incrementally as different stages of a development project are completed.

Bridging loans typically have a term of up to 12 months, although extensions may be possible in certain cases. Interest is usually rolled up and repaid alongside the loan balance at the end of the term. For example, if you borrow £100,000 and accrue £5,000 in interest, you would repay £105,000 to the lender. Use our bridging loan calculator for a quick cost estimate and get the support you need for fast bridging finance in the UK.