Bridging Loan Rates

Bridging Loan Interest Rates and Costs

Bridging loans tend to have higher interest rates than other forms of borrowing rates. This is because they are intended as a short-term finance option before longer-term funding comes through. Interest rates can vary from around 0.4% to 1.5% per month, depending on the lender you choose.

Bridging loan interest rates can be fixed or variable. Fixed rate interest is fixed across the term of the bridge loan, and all monthly payments are the same. Variable rate interest can change, usually in line with the Bank of England base rate.

There are a few ways to pay the interest. Rolled up interest is charged in full at the end of the loan term. Retained interest is borrowed for an agreed period and is paid back at the end of the loan. Monthly interest is paid monthly and is not added to the bridging loan balance.

Aside from interest, there are a number of additional costs to consider, including a lenders arrangement fee, which ranges from 0% to 2% based on the gross amount borrowed. However, there are lenders who don’t charge certain fees. We will recommend a product most suited to your situations taking all costs into account.

There are several factors that influence bridging loan rates, including loan to value, type of legal charge, type of property used as security, condition and location of security property, income and affordability, term of the loan, credit history, and cost and availability of funds to the lender.

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Residential Bridging Loan Rates

Loan-to-value (LTV) is the ratio of mortgage to property or security value, expressed as a percentage. For example, if you’re buying a £100,000 property with a £10,000 (10%) deposit, you’ll need a 90% LTV mortgage.

Our standard LTV-based residential bridging loan interest rates:

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Up to 50% LTV

0.49% per month
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50% - 65% LTV

0.59% per month
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65% - 70% LTV

0.69% per month
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70% - 75%

0.75% per month

This is for indicative purposes only and not a binding offer.

The actual rate will be determined once one of our experienced underwriters speaks to the customer and understands their specific needs and situation

Commercial Bridging Loan Rates

Commercial bridging interest rates are higher than those secured against residential property because commercial is seen as a greater risk. Typical commercial bridging rates are as follows:

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55% LTV

0.65% per month
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65% LTV

0.75% per month
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70% LTV

0.85% per month

This is for indicative purposes only and not a binding offer.

The actual rate will be determined once one of our experienced underwriters speaks to the customer and understands their specific needs and situation

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CALL US TODAY on 0203 940 8544 TO GET ADVICE AND A FREE TAILORED QUOTE.

Bridging Rates Example - £100,000 Loan

In this example, we demonstrate the amount of monthly interest you would pay on a typical £100,000 bridging loan. So, if you borrowed £100,000 with 0.43% interest, you would pay £430 in interest per month.

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0.43% interest

£430 per month
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0.75% interest

£750 per month
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0.85% interest

£850 per month
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1.00% interest

£1,000 per month
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1.20% interest

£1,200 per month

This is for indicative purposes only and not a binding offer.

The actual rate will be determined once one of our experienced underwriters speaks to the customer and understands their specific needs and situation

How can we help?

CONTACT US TODAY TO GET ADVICE OR FOR A FREE QUOTE FROM OUR EXPERT BRIDGING ADVISORS.

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