Bridging Loans

Bridging loan providers may offer loan amounts ranging from £25,000 to more than £30 million in cash. However, borrowers typically can only secure a maximum loan-to-value (LTV) ratio of 75% based on your property's value. For instance, if your property costs £200,000, you would need £50,000 as a starting point. Additionally, when obtaining a first-charge loan, borrowers typically have access to higher loan amounts compared to second-charge loans.

Bridging loans are typically priced on a monthly basis due to their short-term nature. However, this structure can lead to significant expenses, with fees ranging from 0.45% to 1.6% per month, making them considerably more costly than standard residential mortgages. The annual percentage rate (APR) for bridging loans can soar to approximately 20%, surpassing the rates of many mortgages. Moreover, there are additional set-up fees... typically around 2% of the loan amount, further adding to the cost. Therefore, it's advisable to opt for a bridging loan only if you're certain you won't require it for an extended period. Interest accrues monthly but is typically "rolled up" and repaid in a lump sum at the loan's end, along with the principal amount and any associated fees and charges.