Working Hours: Mon - Fri: 9:00AM - 6:00PM
Call Us: 0330 304 3040
Home Mortgage Calculators About Blog
   Back | How it Works
How it Works
Securing an excellent mortgage offer with Revolution Finance Brokers couldn't be easier
1Get in Touch
Complete a quick form to give us an overview of your mortgage or financing requirements, and we'll provide recommendations about the best opportunities for you.
2Submit Your Application
Once you've chosen your preferred mortgage deal, we'll steer you through the paperwork with comprehensive application management from start to finish.
3Mortgage Completion
Revolution Finance Brokers will finalise the details and enable you to move forward without delay!
   Back | About
About
Blog
Contact Us
FAQs
Documents
Areas
Credit Report
   Back | Insurance
Insurance
Business Protection Insurance
Life Insurance
Building Insurance
Home Insurance
Mortgage Repayment Protection
Family Income Benefit
Critical Illness Cover
Income Protection
Life Assurance
   Back | Calculators
Calculators
Stamp Duty
Commercial Stamp Duty
How Much Can I Borrow?
Buy To Let
Bridging Loan
Residential & Commercial Bridging
Mortgage Repayment
Development Finance
Commercial Mortgage
   Back | Choose your mortgage type
Choose your mortgage type
Bad Credit Mortgages
Bridging Finance
Commercial Mortgages
Buy to let
Self Employed Mortgages
Mortgages for Professionals
Lifetime Mortgages
Expat Mortgages
Interest Only Mortgages
Mortgage Affordability
Mortgage Application
Income Types
Residential Mortgages
Development Finance
Property Types
Remortgages
First Time Buyers
Mortgage Rejection
Offset Mortgages
Second Charge Mortgages

Which UK Lenders Offer the Cheapest Bridging Loans?

Discover the best value bridge loan products available in the UK, with advice about strengthening your application to achieve the best possible deal.

Cheapest Bridging Loans In The UK

Bridging lending can be a financial lifeline in many property purchases and developments, with a key advantage being the speed in which a deal can be agreed.

However, even on the tightest of deadlines, you want to know you're paying the best interest rates available to preserve your overall budget.

In this guide we'll run through a few key factors in your bridging loan interest rates, and how to achieve the most attractive offers. For more assistance finding competitive bridging loans, contact business finance broker on 0330 304 3040, or drop us a message to [email protected].

Is There a Maximum I Can Borrow Through Bridge Lending?

There isn't a fixed cap, but the maximum a lender will offer you depends on the circumstances.

Some lenders have a policy that limits them to £10,000 and others offer up to £150,000, so it's vital to work with an experienced broker before applying to the wrong lender.

  • Property Details
  • Type of loan
  • help Maximum 75% LTV
  • help Maximum 70% LTV
  • help Maximum 70% LTV
  • help Maximum 65% LTV
  • help We will lend against current market value of the asset with vacant possession

  • £7,500,000
    help You cannot exceed the maximum loan available based on the maximum LTV for the corresponding type of property selected above
  • 75%
    help You cannot exceed the maximum LTV available for the corresponding type of property selected above


  • 0
  • help Term should be entered in whole months, to a maximum of 12

  • help Deducted interest is where the forecast interest amount is deducted from the loan on day one.
  • help Serviced interest is where the interest is paid on a monthly basis. If serviced interest is chosen, evidence will be required to show your ability to pay interest when it is due.
  • help This is the standard rate for the property type chosen
  • help You can enter a custom rate below our standard rate for the calculation, but the availability of this rate is not guaranteed
Instant Results
Total security value 0
Gross loan amount 0
Gross LTV 0
Interest rate 0
Term (months) 0
Minimum term (months) 0
Assumed arrangement fee @ 2% (min £2,000) 0
Interest Retained 0
Monthly Serviced Interest 0
Admin fee 0
Indicative day 1 Net loan advance 0

How is a Bridging Loan Limit Calculated?

Unlike a normal mortgage, a bridging lender won't be as concerned about what you earn. What they will need is security or equity and to know how you plan to pay them back.

As we've discovered, there isn't necessarily a maximum, and specialist bridging lenders secure deals in the tens of millions for large-scale development projects.

Your exit strategy will make a difference here. If there is a guarantee that the lender will get their money back, and you can repay the debt within the term, you will likely be able to borrow much more.

What Are the Cheapest Bridging Loan Rates Available?

Again, the costs depend on the lender, what you are borrowing for, and how secure the loan is. You can expect to pay higher interest than on a mortgage, since a bridging loan is only short-term, and you'll typically pay only the interest.

Most lenders quote rates on a monthly basis, usually anywhere between 0.4% and 2%, and so if you're comparing an APR with a bridge loan, it's essential to see advice to ensure you understand exactly how these compare.

Say you were offered a bridge loan at 1.5% monthly interest; it would be comparable to a longer-term loan at 18% per annum.

Interest also depends on whether you've applied for a fixed-term bridging loan, or a variable loan where the rates will go up or down depending on the base rate.

There are three potential ways for a bridging finance lender to calculate the interest:

  • Monthly interest is paid off usually by direct debit. The balance then falls payable when the end of the term is reached.
  • Deferred interest means that the interest charge is rolled up into the loan total, and you'll need to pay the original balance plus the compound interest at the end.
  • Retained interest means that you borrow the relevant value that you owe in interest payments, and the amount payable is calculated depending on the length of the loan.

What Are the Cheapest Bridging Loan Rates UK?

As with any loan, you will have other fees to pay besides interest:

  • Administration fees
  • Arrangement charges (usually around 1% of the loan value)
  • Exit charges (usually a further 1%).

It is critical to understand what the fees are, and when they fall due to get a total picture of what your bridging loan will cost you.

What Deposit Value Is Required to be Approved for Bridge Finance?

Generally, bridge lenders will offer up to 75% of the total project value - i.e. 75% Loan to Value. In some cases that is capped at 50% or 60%, although it depends on the lender.

Therefore you'll usually need a minimum deposit of 25%, and like as high as 40% or even 50%.

The industry average is around 35%, so if you have a lower deposit and need a bridge loan, an independent broker will be able to recommend lenders with less stringent deposit requirements.

In some situations you can get a 100% bridge loan with zero deposit, depending on what you are borrowing for and how risky the application is.

Is it Easy to Compare the Cheapest Bridging Loan Rates?

Not necessarily! There are millions of bridge loan products and lenders out there, many calculate rates on a case-by-case basis, and there are many more niche lenders with competitive deals that are not advertised directly to the public.

You can check out interest rate tables or comparison tables, but these are a very rough indication.

Tables can't take the circumstances into account, and usually only show you products paid to be advertised by the lender, so aren't a good way to make a borrowing decision.

If you are struggling to compare bridge loan offers, or need independent advice on which lender offers the most competitive deals, get in touch with the Revolution Brokers team.

Which UK Lenders Offer the Cheapest Bridging Loan Rates UK?

Rates can change very quickly, and lenders might offer significantly different rates to two customers, depending on the scenario, amount you wish to borrow, and deposit available.

The only way to secure the lowest interest rates on a bridging loan is to consult a whole-of-market broker who can advise which products are available with the cheapest costs.

What are the Eligibility Criteria for a Bridging Loan?

Each lender is different, so it pays to know their eligibility criteria, and who is most likely to approve your funding application.

Considerations include:

  • Your exit strategy - how you will repay the loan balance. This is often remortgaging or selling a property, so the lender will need to know what the property is worth, and how easy it is likely to be to sell.
  • Credit rating - if you have a clear credit history, you will be less risky and achieve better rates. Bad credit applicants can usually still borrow provided they have a solid exit strategy, but with severe credit history may need a specialist bad credit lender.
  • Purpose of borrowing - there are thousands of reasons you might need a bridging loan, and the lender will need to know what your plans are. Complex projects with an applicant with little experience are a less favourable proposition, whereas if you have several projects under your belt and can provide strong affordability, you are in a good place to negotiate on terms.
  • Security - lenders need security to mitigate their risk, which is usually a property. An asset in a good location that is easy to sell is more secure, and therefore more attractive to a lender.
  • Experience - most bridge loans are related to property developments of builds, so if you have prior experience you will achieve lower interest rates.
  • Deposit - the higher the deposit, the lower the risk and the easier it will be to secure approval. Most lenders need around 30% to 35% as a deposit, and if you can offer 40% or more, you will get the better rates on the market.

Can I Get a Commercial Bridging Loan for a Ltd Business?

You can, and the rates will normally be fairly similar as for private applicants. Usually, lenders will ask for personal guarantees from the directors of the company.

Bridge loans for Special Purpose Vehicles (SPVs) are most common.

Do Interest Rates on Bridging Loans Differ Depending on the Location?

Not really, no, so developers working on construction projects in London, for example, need to budget carefully given the higher property values.

Does My Development Property Type Affect My Bridging Loan Rates?

It can, yes. Bridging loans are used for many purposes, such as buying properties at auction, financing a commercial renovation or purchasing a residence considered uninhabitable for normal mortgage purposes.

The same factors will apply, so the higher deposit, more experience, lower risk and cleaner credit score you have, the better the rates you will achieve.

Are Commercial Property Bridging Loans More Expensive?

Potentially, you might pay higher rates on a bridging loan to buy a commercial building, and the same criteria will apply in terms of your exit strategy.

Some lenders will not finance specific types of property, such as higher risk businesses including petrol stations.

If the project is considered higher risk, you will usually be limited to borrowing 50% or 60% of the total purchase price.

Is There Another Alternative to a Bridge Finance Application?

Indeed there is:

  • Buy to let mortgages can also be arranged fairly quickly, and can be a cheaper way of financing an investment property purchase.
  • Let to buy mortgages are an easy way to release equity in a property and use it as a deposit to purchase your next project.
  • Asset based lending is available to businesses, leveraging existing assets to secure against lending.

Expert Advice with UK Bridging Loans

If you're interested in comparing bridge loan deals, or seeing who is offering the most competitive rates, get in touch with Revolution Brokers.

The team is available on 0330 304 3040 or via email at [email protected], offering independent, whole-of-market advice across the spectrum of bridge finance requirements.

Further Reading

PROCESS

Explore Our Presence

Securing an excellent mortgage offer with Revolution Finance
Brokers couldn't be easier:

cityam
dailyexpress
dailymail
standard
FT Advisor
LBC
The Guardian
Independent
Metro
Mortgage Introducer
Sky News
The Sunday Times
Yahoo
This is Money
Mirror
LBC
The Sunday Times
PROCESS

Revolution Mortgage Brokers:
100% Independent & Whole-of-Market

As specialist mortgage brokers for a huge variety of applicants, the whole-of-market consultants at Revolution provide access to an exceptional range of lenders, products and mortgage deals. That means you get the advantage of professional negotiation and broker-exclusives through an established lending network to ensure we always find you the most competitive mortgage available.

REFERRALS

Refer, Relax, and get £50

Ask the Expert
Mortgage Brokers

Revolution Brokers
What can we help you with today?
Do you have a particular timescale in mind?
Next
Which situation from the below list best matches your requirements? *
Could you tell us the market value of the property?*
Please let us know a rough idea of your yearly income (before tax) for all applicants? *
Back
Next
Primary applicant name *
Contact email address *
Best contact number *
Back
Next