What do bridging loans cost?
The key to finding the right bridging loan for your budget is to ensure that the short term costs are more than compensated for by the long-term financial and personal benefits.
Bridging loans can be expensive due to their short-term nature and higher risk for lenders. Certainly, more expensive than a typical residential mortgage.
Interest is charged by the lender monthly rather than annually due to the short-term of the loan.
Typical interest rates for bridging loans can range from 0.48% to 1.5% per month, depending on the lender and loan terms (source: Moneyfacts 24/01/2023)
Some lenders may offer variable rates, which could start at a lower rate but then increase over time.
Additional fees to consider include set-up fees, exit fees, administration or repayment fees, legal fees, valuation fees, and financial advisor fees.
You will be expected to have an exit plan in place so that the loan can be repaid quickly. This will be an essential part of the terms of your bridging loan.
Speak to a bridging loan advisor to get an understanding of all the costs associated with a loan and to negotiate the best possible loan terms and rates.
At largemortgageloans.com, we work with a variety of lenders and private banks to ensure that our clients get the most competitive rates and the best loan terms for their specific circumstances.