Bridging Loans from 0.55%
UK Property Finance Ltd. is a whole market broker. We have established relationships with the most reputable lenders across the UK. This has given us access to the best deals and rates available. We are specialists in bridging finance. We can guarantee to partner our clients with the right lender to suit their unique requirements.
Whatever your goals are, we will find the perfect bridging loan for you.
- Loans for any (legal) purpose
- Business bridging finance for equipment and/or cash flow problems
- Bridging loans to purchase auction property
- Loans for tax issues
- Loans to fund investment properties and buy-to-let properties
- Bridging finance for renovation and/or refurbishment projects
- Bridging solutions for chain delay issues for buyers and movers
Why choose UK Property Finance?
UK Property Finance can source the cheapest bridging finance deals for borrowers. We have no affiliation with any singular lender and have full access to the best lenders across the UK. This gives us access to deals you would not find on the high street or with the big banks.
We are an FCA-authorised and regulated master finance broker. We specialise in bridging finance for all purposes. This includes the purchase of overseas property!
We pride ourselves on our ability to arrange fast-bridging finance. We will be able to assess your situation quickly! We often give you a yes or no decision on the very same day.
What is a Bridging Loan?
Bridging finance is a short-term, secure loan that can be arranged quickly. A borrower can be approved in as little as a week! This makes it a perfect funding vehicle for purchases that require quick access to funds.
Borrowers have various reasons for applying for a bridging loan. Most commonly, bridging finance is used to bridge the gap between buying a new property and selling their current one. They are often used when there is a delay in the chain. This is the most traditional use for this type of funding; however, these days, bridging finance is beneficial as a solution for raising much-needed cash for other purposes.
Bridging finance is a short-term funding vehicle, typically with a period of between 6 and 12 months.
To calculate exactly how much a bridging loan will cost, we have created a bridging calculator. Simply input your data into the relevant fields, and the bridging loan calculator will do the rest!
The bridging loan will need to be repaid within 12 months at the end of the term. There are no monthly payments made for this type of loan. Interest is only charged for the length of time that the finance is used. There are no early repayment charges if the loan is paid early.
Before approving you for funding, the lender will most likely require an exit strategy. This will outline exactly how you intend to repay the loan.
Bridging finance is particularly useful for borrowers who have not been accepted for more traditional loan products. Applicants may be refused other types of loans for the following reasons:
- When an applicant is older than the new acceptable age limit, it can be difficult to secure a mortgage.
- The applicant may be rejected due to being asset-rich but cash-poor. Therefore, they may not pass the affordability test in order to qualify for a long-term loan like a mortgage.
- The applicant may have a poor credit history and is therefore not eligible for a mortgage.
- If the property is uninhabitable, an applicant may be rejected until the property has been upgraded to a liveable state.
- The property the applicant is trying to purchase may have a seller who is only willing to sell to buyers who are chain-free.
- A loan could be required for a development opportunity, for which other funding products are not suitable.
- Finance may be required for additional borrowing, such as a second charge.
- The applicant may have a time limit to raise funds for urgent needs.
- The applicant may only need a short-term, flexible funding option.
- The borrower may want to secure the purchase of a new home, but the deposit is tied up in their current property, which has not yet been sold.
How bridging loans work
Many high-street banks in the UK have withdrawn their bridging finance packages. This has left a gap in the market that has been filled by smaller, specialist lenders. They have been successfully offering applicants the chance to secure a bridging loan at competitive rates. These lenders have made it possible for borrowers to access large amounts of funding. This funding is often approved in just a matter of days.
It is important to know how bridging finance works before you choose this as your option. We have all the expertise to assist you in securing the right type of financing for your requirements. You should consider the following facts:
- Bridge loans are routinely secured against existing land or property. Proof of income and good credit scores may be required by the lender to be approved.
- Applicants can typically borrow up to a maximum gross loan (net loan + all fees and interest) of 75% or 80% of the value of the property they wish to purchase. This will vary from lender to lender, with most willing to negotiate.
- Bridging brokers with access to the ‘whole of market’ will be able to search and compare bridging lenders across the UK, finding you the best deal for your circumstances.
- Bridging finance is generally repaid in full at the end of the term, usually up to one year, including all interest that has been incurred.
How bridging loans can be used
A bridging loan can be used to purchase a property when a borrower needs to complete a property transaction quickly. Obtaining traditional financing on time can be difficult. This can happen in several scenarios, such as:
Auction: When a property is purchased at auction, completion is required within a short period of time. This is usually within 28 days. However, bridging loans offer a viable solution as they can be swiftly arranged. This is with the understanding that you will refinance with a standard mortgage later on.
The bridging lender will release the funds within the 28-day period. They are aware that you will repay the loan through a lump-sum payment via a traditional mortgage. You then have 12 months to secure standard mortgage financing to pay off the bridge loan. A bridging loan advisor will guide you in selecting the right product that matches your needs.
Broken property chain: A bridging loan can provide the funds to complete the purchase of a property before your current property is sold. This can then be repaid when the other property is sold.
Buying a property that does not meet traditional lender criteria: This may be because of an unusual property type or a property in need of significant repair. A bridging loan can provide the necessary funds to purchase the property before the applicant secures more traditional financing options in the future.
Opportunity purchase: A borrower may come across a unique opportunity to purchase a property they cannot afford with their existing finances. A bridging loan can provide the funds to take advantage of the opportunity.
Property development: A borrower may want to purchase a property that requires refurbishment or development before it can be sold or rented out. A bridging loan can provide the funds to purchase the property and finance the renovation or development work.
What calculations will lenders use for a bridging loan?
Bridging loan lenders use a few different calculations when determining whether to approve a loan application and how much to lend. These calculations include:
- Loan-to-value (LTV) ratio: This is the amount of the loan compared to the value of the property used for security.
- Interest rate: The interest rate for a bridging loan is usually higher than a traditional mortgage. This is because it is a higher-risk short-term loan.
- Repayment plan: Lenders will want to know how the borrower plans to repay the loan.
- Affordability: Lenders will want to ensure that the borrower can afford to make the monthly interest payments; typically, the interest is retained, meaning there are no monthly payments. However, the lender will still have access to your income to make sure of this. They will typically look at the borrower’s income and expenses to determine whether they can comfortably make the payments.
Exit strategies for bridging loans
An exit strategy must be strong and make sound financial sense. Most exit strategies involve the sale of a property or re-financing with a mortgage.
Qualifying for a bridging loan
Bridging finance is often the best funding method for the following:
- Applicants who can or cannot prove income
- Applicants with a good or bad credit history
- Applicants who are employed, self-employed, or unemployed
- Companies or individuals
- Applicants with equity in their home or those with access to a cash deposit
Interest Rate | Monthly Interest |
---|---|
0.55% | £550 |
0.70% | £700 |
0.75% | £750 |
0.85% | £850 |
0.95% | £950 |
1.00% | £1,000 |
1.05% | £1,050 |
1.10% | £1,100 |
1.20% | £1,200 |
1.25% | £1,250 |
1.50% | £1,500 |
Loan Taken | Full Repayment |
---|---|
£50,000 | £59,254 |
£60,000 | £70,148 |
£70,000 | £81,042 |
£80,000 | £91,936 |
£90,000 | £102,829 |
£100,000 | £113,723 |
£110,000 | £124,836 |
£120,000 | £135,948 |
£130,000 | £147,060 |
£140,000 | £158,172 |
Criteria
Some lenders prioritise low-risk borrowers, while others specialise in specific niche areas.
There are 2 key points:
- You will be required to provide some form of collateral or down payment.
- A strong exit strategy is crucial to securing the loan.
Bridging loans are secured against property. Lenders typically do not require proof of income from borrowers. Lenders may still request to see this to have a better understanding of the borrowers’ circumstances. Your credit history may not impact your loan offer.
Some additional basic criteria include:
- Being at least 18 years old
- Have a secure property in the UK, UK expats can also qualify for bridging finance in the UK based on this.
The following criteria apply to our bridging loan applicants:
- Commercial and residential property (all conditions considered, including uninhabitable)
- Land and property in England, Wales, Scotland, and Northern Ireland
- Land with or without planning permission or approval.
- Loan sizes range from £20,000 upwards.
- 1st, 2nd, or 3rd charges
- Ltd. company and individual loans.
- Competitive interest rates and bespoke deals.
- 2nd charges following bridging finance and equity release mortgages
- With or without proof of income
- Employed, self-employed, unemployed, or retired
- There are no age restrictions.
- Loan terms range from 1 day to 3 years.
- Up to 75% LTV (loan to value) without additional security is needed.
- 100% or more LTV with additional security
- Adverse credit is acceptable.
- No valuation fee is possible for some borrowers.
- There are no solicitor fees or representation on some bridging products.
- Loans for virtually any (legal) use
- There are no exit fees on the majority of products.
- Quick approval and completion