Replacing an expensive bridging loan with a remortgage

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Thursday June 30, 2011

You can replace an expensive million pound bridging loan with a competitively priced private bank remortgage, saving you thousands of pounds. To discuss this or any other large mortgage case, please contact us.

Case profile

Our client was a self-employed television executive, earning £400,000 per annum for the last 2 years. She bought a London property worth £2 million from a relative, who gifted her £700,000 of equity, so the purchase price was £1.3 million. She was unable to find a high street bank to lend her a £1.3 million mortgage at 100% of the purchase price.

Her broker at that time advised a £1.3 million bridging loan at 1.5% interest per month, meaning a monthly repayment of £19,500. There was also an arrangement fee of £32,500 to pay. There was no plan to ‘take out’ (pay off) the bridging loan and the situation quickly became stressful, with the client under pressure to repay the loan.

Using a new broker, she approached a high street bank who approved the remortgage (£1.3 million on £2 million) in principle, but then turned her down because she had not owned the property for at least 6 months. Meanwhile the bridging lender said that it would charge a further £32,500 fee if the loan was not paid off within a couple of weeks.

The solution

The client’s broker had limited experience in arranging such a large loan, so referred his client to’s specialist mortgage team. The remortgage was completed in 10 days and beat the bridging lender’s deadline. A valuation was arranged within 1 day, with the report to the private bank on the same day. An offer was obtained in 5 days and completion 5 days later, using title insurance to replace searches.

Deal highlights

Loan amount: £1.5 million (75% LTV on £2 million valuation)
Rate: 3 Month Libor + 2.5%¹ tracker (pay rate of 3.3%)
APR: 3.8%² (the overall cost for comparison)
Term: 5 years
Type: Interest only
Arrangement fee: 1% of the loan amount
Early repayment charges: 1% for one year

Note that this case study is for information and illustration purposes only. It is not an offer, or suggestion of an offer. Each mortgage case is assessed on an individual basis and there is no guarantee that the solution described here can be repeated in the future.

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Your home may be repossessed if you do not keep up repayments on your mortgage

¹ Please note that this deal may not be available to – or suitable for – all customers, dependent upon their individual circumstances. The rate quoted may become out of date at short notice and may not be available at the point at which customers enquire about it. This letter may not contain all the information needed for customers to make a decision and they should seek advice.

² APR calculation based on arrangement fees of £16,000 and legal and valuation fees of £5,000. The actual rate available will depend upon your circumstances. Ask for a personalised illustration. is a trading name of Ltd, 12 Pepper Street, London, E14 9QY which is authorised and regulated by the Financial Services Authority. The Financial Services Authority does not regulate some aspects of buy to let mortgages, overseas mortgages and tax advice. Ltd Registered in England and Wales No: 5070990 Registered Address: Bridge House, London Bridge, London, SE1 9QR. Your initial consultation is obligation free. A fee as described below will be charged on application for a mortgage, this fee is non-refundable. We will also be paid by the lender. A fee of up to 1% of the mortgage amount is payable, of this 25% is payable on application and the remainder on completion. E.g. on a mortgage of £100,000 the fee would be £1,000 in total of which £250 would be payable on application.

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Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Changes in the exchange rate may increase the sterling equivalent of your debt. You may have to pay an early repayment charge to your existing lender if you remortgage. Think carefully before securing any other debts against your home. is a trading name of Ltd, Aegon House, Ground Floor Suite, 13 Lanark Square, London, E14 9QD authorised and regulated by the Financial Conduct Authority (FCA). Our FCA registration number is 302228 and can be viewed by visiting the FCA website: The FCA does not regulate tax advice or some aspects of commercial, buy to let, overseas mortgages, bridging finance, finance and asset lending. Ltd is a licensed credit broker, and not a lender. Ltd Registered in England and Wales No: 5070990 Registered Address: As above. The guidance and advice contained within the website are subject to the UK regulatory regime and is primarily targeted at UK customers. Calls may be recorded for training and monitoring.
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Largemortgageloans is a trading name of Ltd, Aegon House, Ground Floor Suite, 13 Lanark Square, London