INSERT BRIDGING LOAN CALCULATOR
This is how our bridging loan calculator works
Bridging loan calculators work by performing a series of calculations based on the information entered by the user. The main numbers needed to perform a bridging finance calculation include the following:
-
How much money do you intend to borrow
-
Your preferred repayment period
-
Value of the asset or assets used to secure the loan
-
Choice of monthly interest or rolled-up interest
-
Approximate monthly interest rate
However, there are additional fees and commissions payable on a bridging loan that are not typically covered by an automated bridging finance calculation. Each of the following will therefore need to be discussed with your broker before applying:
-
Property valuation fees
-
Administration fees
-
Loan repayment fees
-
Early repayment fees
-
Exit fees
-
Legal fees
Check before you apply
We highly urge anybody contemplating bridging credit for whatever reason to utilise a bridging loan calculator before applying to verify they can afford to repay the loan easily. Bridging financing has the potential to be a very cost-effective kind of short-term borrowing, but it can become costly if the loan is not fully returned by the agreed-upon date.
A bridging loan calculator should not be considered a 100% accurate or binding indication of actual bridging loan costs. A wide variety of additional factors may influence affordability or otherwise of bridging finance, all of which will be discussed with your broker during your initial consultation.
Interest is compounded
Interest accrues monthly based on the outstanding balance. No immediate interest payments are necessary; instead, the monthly interest is added to the overall balance. Consequently, the balance grows each month due to compounded interest.
- Typically, loans span a 12-month term, with no penalties for early repayment.
- The shortest term feasible is one month (equivalent to 30 days), meaning interest accrues for the entire month if the loan is repaid within this timeframe.
- Beyond the initial month, interest is only calculated up to the day of repayment. For instance, if the loan is settled after 3 months and 10 days, the accrued interest would be for 3 full months plus a fraction representing the remaining 10 days of the month.
Bridging Loan Eligibiliy
-
Eligible applicants include sole entrepreneurs, commercial ventures, and established corporations.
-
Property Focus: Common uses include acquiring or upgrading residential or commercial buildings.
-
Age Requirement: Most lenders need a minimum of 18 years old, although some may have a higher limit.
-
UK residency: This requires having a registered address in the UK.
-
Secured loans require collateral, often property.
-
Exit Strategy is Important: A defined repayment strategy, such as selling the secured asset, obtaining long-term financing, or collecting anticipated income, is essential.
-
Most lenders need a minimum loan amount of roughly £10,000.
-
Employment: Your work position (employed, self-employed, or retired) is less important than the other factors indicated above.
Our Incredible Team
Good Reviews by Customers
“I needed quick funds to secure a property auction win, and Kelly at UKBL was my savior. Their application was straightforward, and the funds were in my account within days. The interest rates are a bit higher, but for the speed and efficiency, it was worth every penny. Highly recommended for anyone in a tight spot!
I was skeptical about bridging loans at first, but Jess changed my mind. They explained everything in detail without any of the usual finance jargon. The approval process was surprisingly stress-free, and their customer service was top-notch. If you’re looking for a bridge loan, these guys are the real deal.
UK Bridging Loans provided a bridge loan when my bank turned me down. The flexibility they offered was exactly what I needed to renovate my fixer-upper before selling. Their team was very responsive, and they made what could have been a stressful situation quite manageable. A lifesaver!
I’ve used UK Bridging Loans twice now for property development projects. Their rates are competitive, and they really know their stuff when it comes to property investment.
Ready to Begin
During a phone call or one of our online appointments, we’ll help you decide if a bridge loan is right for you
We’ll guide you through the process, explain fees, and compare rates for all bridging loans available to you.
We’ll handle everything from paperwork to getting the money into your account.
We are open 7 days a week!
Request a Free Consultation
Frequently asked questions
Can’t find an answer? Call us at 0116 366 6338 or email us contact@ukbridgingloans.co.uk
How do you calculate bridging loan amount?
Bridging loan amounts are typically calculated using the following formula:
Bridging loan amount = property value – outstanding mortgage amount.
For example, if your property is worth £100,000 and you have an outstanding mortgage of £50,000, then you could borrow up to £50,000 using a bridging loan.
How much do you need to put down for a bridging loan?
The amount of equity you need to put down for a bridging loan will vary depending on the lender and the property you are borrowing against. However, you will typically need to have at least 20% equity in the property.
What is the formula for calculating bridging amount?
The formula for calculating bridging amount is as follows:
Bridging loan amount = property value – outstanding mortgage amount – fees.
Fees can include arrangement fees, valuation fees, and legal fees.
What is the monthly interest rate on a bridging loan?
Bridging loan interest rates are typically higher than mortgage interest rates. The current average monthly interest rate for a bridging loan is around 4%. However, interest rates can vary depending on the lender, the property, and the borrower’s creditworthiness.
What is the average interest on a bridging loan?
Interest rates for bridging loans normally range from 0.5% to 2% monthly. Your specific rate will be determined by: The kind of property you’re purchasing and your security.
What is the average interest on a bridging loan?
Interest rates for bridging loans normally range from 0.5% to 2% monthly. Your specific rate will be determined by: The kind of property you’re purchasing and your security.
Is it worth getting a bridging loan?
Bridging loans can be a valuable tool for those who need to bridge the gap between two property transactions. However, they are not without their drawbacks. Here is a summary of the pros and cons of bridging loans:
Pros:
- Can be used to bridge the gap between two property transactions.
- Convenient and quick to obtain.
- Can be used to purchase a property before selling your current one.
Cons:
- High interest rates and fees.
- It can be difficult to repay early.
- It can be risky if the property market falls.
How long does a bridging loan take?
Bridging loans can be arranged quickly, often in as little as a few days. However, the actual processing time may vary depending on the lender and the borrower’s documentation.
How long can you have a bridging loan for?
The maximum term for a bridging loan is typically 12 months. However, some lenders may offer longer terms in exceptional circumstances.
Here are some additional things to consider before taking out a bridging loan:
- Make sure you have a clear exit strategy.
- Only borrow what you can afford. Make sure you can comfortably afford the monthly repayments on the bridging loan, including interest and fees.
- Shop around for the best deal. Compare interest rates, fees, and terms from different lenders before you take out a bridging loan.
- Get professional advice. It is a good idea to speak to a financial advisor to get personalised advice on whether or not a bridging loan is right for you.
How do you calculate bridging finance?
Calculating bridging finance involves understanding two main costs: the loan amount and the interest. The loan amount is simply the sum you need to borrow. Interest rates on bridging loans are typically higher than traditional mortgages due to the short-term nature of the loan. You can use online calculators to get a general idea of the cost, but they usually factor in a monthly interest rate. The total interest cost depends on whether you pay interest monthly (serviced) or if it accumulates over the loan term (rolled-up). Adding the loan amount and total interest (depending on the payment method) gives you the total cost of bridging finance.
What is the minimum deposit for a bridging loan?
There is no minimum deposit set for bridging loans. This means you can potentially borrow the full value of the property you’re looking to purchase. However, lenders will assess your ability to repay the loan and may set a loan-to-value (LTV) ratio limit based on your financial situation and the property itself. So, even though a minimum deposit isn’t mandated, you may still need to provide a deposit depending on the lender’s requirements.
Are bridging loans high risk?
Bridging loans can be powerful tools for fast and flexible financing, but it’s important to be aware of their characteristics. While the interest rates might be higher than traditional mortgages due to the short-term nature of the loan, they can unlock opportunities that wouldn’t be possible otherwise. This can be especially valuable in a fast-paced market where a quick injection of funds can secure a dream property or prevent a sale falling through. The key is having a solid exit strategy in place, such as securing long-term financing or a confirmed buyer for your existing property. Used strategically, bridging loans can be springboards to achieve your property goals.