On this page:
Bridging Loan calculator
Bridging Loans at a glance
Frequently Asked Questions
Case Study
On this page:
Bridging Loan calculator
Bridging Loans at a glance
Frequently Asked Questions
Case Study
Please note that we base our calculations on an interest rate of 1% per month. We have rates from 0.77% per month but in our experience the criteria for these deals may be harder to satisfy. We feel 1% offers a realistic quotation. We will of course source you the best interest rate available.
The calculator figures are only an estimate and can vary depending on the lender and your personal circumstances. We would recommend that you speak with one of our advisers to get a personalised quotation, to help you make an informed decision, that is right for you.
A bridging loan is a short-term loan, where the repayment term can be as short as a few weeks. Unlike mortgages, bridging loans can be arranged quickly, with funds released in as little as 3-7 days. As the name suggests, these loans aim to ‘bridge the gap’ and typically used when purchasing a property at auction, renovating a property or when you need to buy a property before selling another.
Bridging finance is a secured loan, meaning that you need to put up a secure asset i.e. your property (or properties), as collateral. At Morris Finance, we have access to all UK lenders, giving us the ability to source the right bridging finance for you and your situation.
We provide a friendly, professional service to help you get the money you need at the best available rates. We can also source bridging finance abroad. If you need to borrow with a bridging loan, get in touch with us today!
Our bridging loans service provides:
Frequently Asked Questions
What can a Bridging loan be used for?
A bridging loan can be used to break a residential chain, meaning you can buy a new home, even if your current home has not sold yet, the chain is being held up, or has collapsed.
It can be used to purchase an auction property, although generally you only have 30 days after the auction to pay in full.
Bridging can also be used for developments and refurbishments whereby funds can be made available to do the required work, and if you are buying land, a bridging loan could cover the cost of building work.
If a property is unmortgageable, high street lenders will not mortgage a property that is in bad condition or uninhabitable for example, in its current state. Bridging finance can give you the money required to bring the property up to standard.
How does a Bridging loan work?
You can typically borrow between £50,000 and £100 million + with a bridging loan. The maximum loan, including interest, is normally limited to 75% loan to value. The loan is then secured on the property (or across multiple properties or other assets).
Can I get a Bridging loan with another person or as a Ltd company?
Yes.
Do I need experience?
Not always, Lenders will look at a number of factors.
Can I get a bridging loan as a first time buyer?
It may be possible depending on your circumstances. Speak to us to understand if you are eligible for a bridging loan.
What are the advantages and disadvantages of a Bridging loan over a standard Mortgage?
The advantages are:
Speed – the money could be available to you in as little as 3-7 days.
Loan size – potentially you could borrow more as it can be secured on a number of properties or assets.
Flexibility – you can choose the length (typically 3-24 months) and how you pay the interest (either monthly or retained to the end)
Acceptance – you may not meet standard mortgage criteria. For example, if the condition of the property makes it uninhabitable, or your age or income does not meet the usual lender criteria.
The disadvantages are:
Loss of assets – if you can’t repay the loan, you risk losing the secured asset(s).
Higher interest rates – on comparison, bridging loan rates are higher.
Fees – these are generally added to the loan.
How much does a Bridging loan cost?
Costs typically included in a bridging loan are:
Do I need a deposit?
The deposit required is typically 25-40%. 100% loans are available but would require additional security.
Do I pay monthly?
The interest can be paid monthly but, is usually rolled up to the end or retained.
How do I repay a Bridging loan?
It is important to consider your exit strategy from the Bridging loan. This would usually be a new mortgage/refinance, selling the property or using other funds to repay the loan. It can also be repaid early.
Can I get a Bridging Loan if I have adverse credit?
Adverse credit, also known as bad credit history, does not necessarily mean you are unable to get a mortgage. Every situation is unique and we can advise accordingly.
How can I check my Credit Report?
Use this link for Check My File Credit Report
https://www.checkmyfile.partners/694W2WN/2CTPL/
Check my file offers a 30-day free trial which is £14.99 per month, thereafter, and can be cancelled at any time.
What should I do next?
When you are ready, please give us a call. One of our friendly advisers will gather information about your enquiry and offer advice accordingly. We offer FREE initial consultations.
Case Study Example
Mr and Mrs X own their house outright, so have no mortgage, it is valued at £450,000
They have £200,000 in savings and have found the house of their dreams for £475,000. However, the seller wants a quick sale, 4 weeks maximum. Mr and Mrs X didn’t want to lose the house, but it would take them too long to sell their own house to be able to meet the 4-week deadline.
Taking into account their savings, they needed an additional £275,000.
After taking advice, they decided that a 6-month bridging loan for £275,000 would enable them to buy their dream house and have plenty of time to sell their house.
The lender agreed to lend them the money they needed. It was secured it on their current property and they were able to purchase their new dream home.
The interest rate was 0.94% per month, but they did not have to pay any monthly payments as they were rolled up and paid as a lump sum at the end of the loan.
After 4 months, the sale of their house was completed, and they were able to repay the bridging loan of £275,000 plus interest and fees.
This example is based on figures from a bridging lender on 01/04/2024 and is for illustrative purposes only.
We have a bridging loan calculator on this page if you would like to work out some indicative figures, otherwise please get in touch.
Your property may be repossessed if you do not keep up repayments in line with the lenders schedule. Think carefully before securing debt against any property.