Cost of a Bridging Loan
Bridging loans offer a short term finance option for when other types of borrowing, such as a mortgage cannot be accessed. They allow you to borrow large amounts of money for a variety of reasons, including property purchases, usually for terms of up to 12 months.
The cost of a bridging loan will vary from lender to lender, but in general they tend to be more expensive than mortgages and some other types of borrowing. It is therefore really important to understand all of the costs involved and how to find the best possible deal.
Interest and fees on bridging loans
There are three main costs associated with taking out bridging finance:
- Arrangement fees (for taking out the loan)
- Exit fees (charged by some, but not all, lenders when you repay the loan)
- Interest (charged monthly, but there may be the option to pay as a lump sum when you repay the capital)
What affects the cost of a bridging loan?
The fees charged on bridging loans can vary considerably between providers, but the main determiner of the cost of a bridging loan is usually the interest rate.
Things that will affect your interest rate include:
- How much you borrow
- The length of your loan term
- Your Loan to Value ratio (LTV)
- Your credit rating
- How much debt you already have
Compare the cost of a bridging loan from all the leading lenders
Our free bridging loan calculator offers a fast, effective way to identify which lenders offer the lowest cost bridging loan that matches your borrowing needs and personal circumstances. It allows you to see the most attractive deals on bridging finance from all the top lenders across the market.
Want to find a bridging loan at the lowest possible cost? Get in touch with our friendly expert team of loan brokers using the contact form on the right or by calling 0117 313 6058.