A bridging loan is a kind of short-term higher interest financial product for property investors, designed to 'bridge' any kind of financial gap. Bridging loans can be particularly useful in the following situations:
- Buy a property at auction - a mortgage might be too slow to arrange or unsuitable for an auction property
- Pay for renovation work - bridging finance could cover the cost of renovation until a remortgage is possible based on the increased value of your home after the work
- Buy land for Development - the bridging loan covers the cost between buying and building on the land and getting a mortgage once the house is finished
- Purchase an uninhabitable property - the loan covers the purchase cost until you can apply for a mortgage (potentially after the work is completed)
Our Finance Finder tool, found in the Evaluate section of the website, has the most comprehensive database of property-specific bridging finance lenders operating in the UK. On the Finance Finder menu, click 'Bridging Finance':
You need just three simple pieces of information to get started:
- The full postcode of the project
- Loan size (the total amount of borrowing required)
- The current value of the property used as security
The maximum LTV for bridging finance is typically 60-75%, with 80% LTV occasionally being available.
Once you've entered all the information, click 'View finance options' and you'll see the results table shortly:
The database of lenders has been filtered to ensure they offer bridging finance in the right geographical area, and that you meet their basic LtV and min/max loan criteria.
The table displays all this information, as well as key numbers: headline interest rate and setup and exit fees.
Remember, the exact interest rate the lender will offer you on bridging finance will depend on your circumstances, experience level and the nature of the development project.
Click 'Check eligibility' if you'd like a dedicated advisor from our partner b2bfinance.com to help you investigate the right finance options for you.