Bridging Finance Calculator

You’ll need the following information:

• Type: options include standard, refurbishment, or a second charge loan.
• Term: What is the preferred duration of the loan term? Usually, up to 12 months is standard.
• Properties: The number of properties you have to offer for security.
• Valuation: of the residential property or properties offered for security.
• Loan Amount: Input the amount of funding you think you will need.

Once you have input your details, we will calculate all the costs attached to applying for and taking out bridging finance.

Reason for needing a bridging loan	% Ratio
Main residential property	24.58%
Semi-commercial or mixed use	19.24%
Light non structural refurb	11.47%
Commercial property	7.08%
Land with planning	6.55%
Property development	5.28%
Residential investment	4.15%
Heavy refurb or structural work	4.01%
Company Tax or VAT bills	3.32%
Avoid residential foreclosure	3.17%
Avoid investment foreclosure	2.87%
Self Assessment or Capital Gains tax	2.41%
Rebridge facility	2.24%
Land without planning	2.15%
Other	1.48%

The calculator will highlight all fees and charges typically included in the bridging loan cost.

Once you’ve used the calculator to confirm the loan amount, we’ll reach out using the contact details you provided. Lending companies design bridging loans as short-term solutions with higher risk than standard mortgages and typically set higher interest rates based on your current financial situation.

There should be various factors that you will need to take into account:

• LTV (loan to value): This is the ratio of the amount borrowed to the property’s value. The borrower uses the property as collateral. In general, the higher the LTV, the higher the interest rate offered, and vice versa. Put simply, if LTV is low, borrowers can expect competitive interest rates from most lenders.
• Regulated vs. unregulated: If the property will be the buyer’s main home, the loan will follow FCA rules. This means someone will regulate the loan. If the property is not the buyer’s main home, the loan will not be regulated. Investors will consider property purchases for investment purposes only as unregulated.
• The size of the deposit: This plays a significant role in shaping how lenders perceive your financial reliability. When you put a lot of money into your account, lenders see you as a safer borrower. This makes it more likely for you to get a bridging loan with a lower interest rate.
• Lender fees: These are charges imposed by the bridging loan provider for setting up the loan. These fees usually amount to around 2% of the loan, but may vary slightly depending on the lender.
• Legal fees: Completing legal paperwork is necessary for a bridging loan, just like it is for a regular mortgage. You need to find a solicitor who can handle all the legal aspects of bridging finance. In addition, you will be responsible for covering the expenses related to hiring a solicitor. Borrowers could also be liable for their own expenses in addition to those of the lender.
• Broker fees: Most brokers will charge a fee for their services. We highly recommend employing a bridging broker. They can find the best deals and help lower the total loan costs.

Valuation costs are necessary for bridge finance, which is a secured loan. This loan requires us to value the collateral to ensure the asset is worth enough.

Most lenders do not charge exit fees. However, for those that do charge an exit fee, it usually falls between 1% and 2%. You must pay this fee when repaying the bridging loan.

How is interest calculated?

The calculation of bridging finance interest differs greatly from that of typical mortgage interest. Lenders calculate bridging finance differently than traditional mortgage products because of the way they calculate interest. Lenders calculate the interest on long-term debt, such as a mortgage, annually. The lender fixes the interest on a bridging loan on a monthly basis.

Borrowers typically return bridging loans within 12 to 18 months. The borrower pays less interest if they return the loan ahead of schedule.

Many lenders offer rolling-up interest. This means that the interest accumulates over time. The borrower then pays it in one lump sum at the end of the loan term.

What would the monthly cost of a bridging loan be?

The monthly cost of a bridging loan depends on the interest payment structure and the method used to calculate the expenses. There are two primary approaches: serviced payments, where interest is paid monthly, and retained interest, where interest is deferred until the loan term ends.

• Serviced Payments: With this approach, you start with the maximum loan amount from the outset. Monthly interest payments are made throughout the loan term, with the principal amount due at the end. This option is ideal for borrowers who can maintain steady cash flow and comfortably manage regular monthly payments without financial strain.
• Retained Interest: Opting for retained interest means you won’t pay any interest until the loan is fully repaid. When determining the loan amount, the total borrowing must include both the loan principal and the retained interest, ensuring it stays within the lender’s loan-to-value limits. This structure is suitable for borrowers who prefer to postpone interest payments until they settle the loan.

What if something changes?

When using the calculator, you’ll need to input an estimated market value for your property, but keep in mind that this figure can fluctuate more rapidly than expected. Currency value shifts, along with rising or falling property prices influenced by interest rate changes and other factors, can alter market sentiment and pricing in just a few days. If property values surge, it’s wise to reassess your budget.

Additionally, you might start your property investment with a set timeline, but as the process unfolds, your original schedule may need adjustment. For instance, you might plan for a 12-month term but find you require 24 months instead. This bridging finance calculator will give you insight into how such changes could impact your financial outcomes.

How a bridging mortgage is determined

When taking out a bridging loan with the intention of moving to a residential mortgage later, this process is often referred to as a bridging mortgage. This transition can be handled by the same lender or a different one, depending on who offers the most favourable long-term conditions.

Lenders generally use a bridging loan calculator to estimate the initial amount required and then a standard mortgage calculator to assess how much of the bridging loan debt will be transferred to the residential mortgage.

In addition to these calculations, lenders will evaluate your eligibility for a mortgage based on several factors, including your income, expenses, existing debts, credit history, age, and the specific property involved.

Typically, the interest rate on the residential mortgage will be lower than that of the bridging loan, with the mortgage term extending up to 25 years, compared to the 6-month to 2-year term typical of bridging loans.

Bridging loan eligibility

Bridging loans cater to a specific set of borrowers seeking financial assistance for property transactions. Here’s a quick overview of who qualifies:

Individuals, partnerships, and companies—sole proprietors, business ventures, and even established corporations—can apply.

• Property Focus: Common uses involve purchasing or renovating residential or commercial properties.
• Age Requirement: Generally, you must be 18 or older, with some lenders setting a maximum age limit.
• Residency: Living or having a registered address in the UK (including Scotland) is essential. Those residing in Ireland may also qualify.
• Secured Loan: Providing collateral, typically property, is mandatory.

Having a plan to pay back the loan is important. This could include selling the asset used as collateral, getting a long-term loan, or receiving expected money.

Minimum Loan Amount: Most lenders require a minimum loan amount, often around £10,000.
Your employment status (employed, self-employed, or retired) is usually not as important as the other factors mentioned above.

Lenders may consider credit history and income proof in some cases, even if they are not the main factors. Please be aware of this when applying for a loan. Having a good credit history and providing proof of income are important to increase your chances of approval.

Bridging loan example

Here’s a breakdown of the potential costs associated with a bridging loan:

• Administrative Fee: This one-time fee, typically around £295, covers the processing and handling of the loan application. Note that you can only pay this if we approve and draw the loan.
• Valuation Fees: These fees depend on several factors:
• Property Value: Higher-value properties generally incur higher valuation costs.
• Location: Valuations in certain areas might be more expensive.
• Report Type: A detailed valuation report will cost more than a basic “desk-top appraisal.” While thorough valuations are crucial, we prioritise cost-effective options like desk-top appraisals whenever possible.

You must pay valuation fees directly to the surveyor or lender.

The redemption charge is a fee that pays for the legal costs of removing the lender’s security charge from your property. You incur this fee when you repay the loan. Covering the legal expenses involved in this process is necessary. You must officially remove the lender’s security charge from your property.

Solicitor Fees: The lender will appoint a solicitor to handle legal aspects like loan contracts and securing the property. These legal fees are the responsibility of the borrower. We provide a cost estimate through our online calculator.

We find the best bridging loans for your needs

When considering bridging loans, we believe we stand out as a trusted choice for several reasons. With a proven track record of reliability and efficiency, we offer tailored solutions to suit individual needs, whether it’s for property development, purchasing, or refinancing. Our competitive rates and flexible terms ensure that our clients can secure the financing they require without unnecessary stress or delay. Backed by a team of experienced professionals, bridgingloans.co.uk prioritises transparency and customer satisfaction, guiding clients through every step of the process with clarity and expertise. When time is of the essence and financial solutions must be swift, we emerge as a dependable partner, facilitating smooth transitions and enabling clients to seize opportunities with confidence.

Bank	Compare Rate
Barclays	Barclays bridging loans
Halifax	Halifax bridging loans
HSBC	HSBC bridging loans
Lloyds Bank	Lloyds Bank bridging loans
Nationwide	Nationwide bridging loans
NatWest	NatWest bridging loans
Post Office	Post Office bridging loans
RBS	RBS bridging loans
Santander	Santander bridging loans
Shawbrook Bank	Shawbrook Bank bridging loans
Skipton Building Society	Skipton bridging loans
Tesco	Tesco bridging loans
Together Money	Together Money bridging loans
Yorkshire Bank	Yorkshire Bank bridging loans
Bank of Scotland	Bank of Scotland bridging loans
Martin Lewis	Martin Lewis bridging loans
UK Bridging Loans	UK Bridging Loans

We are not affiliated with these banks in anyway, we only provide a comparison service that allows you the choice of a better rate for your loan.