Whether you need a bridging loan to buy a property at auction, to bridge the financial gap between a residential or commercial property purchase and sale, or to give you time to renovate a property deemed unfit for habitation before you obtain a standard mortgage, our panel of lenders offers different types of bridging finance for all needs and objectives.
Bridging loan calculator
Looking for a bridging loan example? Our bridging loan calculator makes it easy to get an idea of how much your loan could cost. Simply add basic information into the online calculator fields to get an indication of how much your finance could cost. Our bridging loan calculator is available 24/7 to get an idea of the costs involved – but our team can work rapidly to get you a tailored illustration of the best deals currently available to you.
Deposit
Borrowers will need a deposit and around 25% is typical, although different lenders will have different requirements. The higher the LTV, the more expensive the loan is likely to be. Conversely, a bridging loan with a 50% LTV will typically attract an interest rate of between 0.43% to 0.55% a month (for a residential loan including light refurbishment – commercial loans tend to have higher interest rates.) Some lenders may offer a 100% bridging loan LTV if alternative collateral (security) can be provided – perhaps in the form of another property.
Interest Rates
A bridging loan is a form of short-term finance, designed to last for months rather than years. This means that it has a higher rate of interest than a standard mortgage, which is often set to last for around 25 years. Borrowers must be aware of the short-term nature of these deals and recognise that the interest rate is also illustrated on a monthly basis. Again, this differs from standard mortgages which are expressed in terms of annual interest rates (APRs). Expect to pay significantly more for your bridging loan on the basis that it is short in nature and designed to be rapidly repaid by a property sale, organisation of a longer-term, standard mortgage or another exit strategy.
Short Term Finance Deal
As we mentioned above, bridging finance is short-term in nature and will only be organised for a short, interim period – typically up to a maximum of 24 months. This means that it must be repaid at the agreed time, or it will become extremely expensive. These products are for experienced borrowers who understand the risks involved with short-term finance, and the costs involved. We gather all of our client’s bespoke bridging loan requirements to recommend only the most appropriate financial products for their needs.
Exit Strategy
Lenders will want to see a clear exit strategy before they extend an offer for bridging finance – especially for larger loans which may be needed to purchase commercial property or HMOs. The exit strategy could involve selling the property for cash which repays the loan or securing a more appropriate long-term mortgage on the property. It could also 
involve selling another form of security (such as another property for a developer with a portfolio.) Hank Zarihs Associates can help you to present your exit strategy as part of a compelling case, which makes lenders more likely to extend an offer of bridging finance at favourable terms
Servicing interest Monthly repayments
Typically, most applicants for a bridging loan will choose not to have monthly payments, although these can be serviced on a monthly basis like a regular mortgage. There are other options for servicing the interest portion for the loan, such as by having it discounted from the principal at the point of lending, or by rolling it up to pay at the point where the loan is repaid. Again, we can help you to find the most appropriate repayment schedule for your needs and exit strategy.