Bridging Loan Calculator: 0.55% Rate
Our online bridging loan calculator is designed to make it quick and simple for you to estimate how much you can anticipate paying as a bridging loan customer.
How to use a bridging loan calculator
Bridging loan rates and associated bridging loan fees vary significantly from one lender to the next, which is why a full market comparison should be conducted to ensure you get the best possible deal.
Use our exclusive bridging loan calculator for an overview of the costs of bridging finance, or call anytime for an obligation-free consultation and a more accurate quote.
This is how our bridging loan calculator works
Bridging loan calculators work by performing a series of calculations based on the information entered by the user. The main numbers needed to perform a bridging finance calculation include the following:
- How much money do you intend to borrow?
- Your preferred repayment period
- Value of the asset or assets used to secure the loan
- Choice of monthly interest or rolled-up interest
- Approximate monthly interest rate
However, there are additional fees and commissions payable on a bridging loan that are not typically covered by an automated bridging finance calculation. Each of the following will therefore need to be discussed with your broker before applying:
- Property valuation fees
- Administration fees
- Loan arrangement fees
- Early repayment fees
- Exit fees
- Legal fees
Broker fees and commissions should not apply, as they should be directed at the lender, not the applicant.
Cost analysis of a £100,000 bridging loan:
Description | Value |
---|---|
Net Loan | £100,000.00 |
Telegraphic Transfer Fee | £30.00 |
Estimated Legal Fee | £1,500.00 |
Arrangement Fee | £2,326.03 |
Admin Fee | £350.00 |
Average interest per month | £593.12 |
Monthly Interest Rate | 0.55% |
Gross Loan | £110,788,22 |
A bridging loan calculator is available to anyone
We highly urge anybody contemplating bridging credit for whatever reason to utilise a bridging loan calculator before applying to verify they can afford to repay the loan easily. Bridging financing has the potential to be a very cost-effective kind of short-term borrowing, but it can become costly if the loan is not fully returned by the agreed-upon date.
A bridging loan calculator should not be considered a 100% accurate or binding indication of actual bridging loan costs. A wide variety of additional factors may influence affordability or otherwise of bridging finance, all of which will be discussed with your broker during your initial consultation.
Bridging loan interest rate calculations
Interest rates vary depending on a number of contributing factors, but they typically range from roughly 0.4% per month to around 1.5% per month.
See below for a summary of the payable monthly interest based on a given rate (example is indicative of a £100k bridge over 12 months):
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 |
1.40% | £1,400 |
1.50% | £1,500 |
How do bridging loan interest calculations work?
Bridging loan providers employ various methods for calculating, applying, and offsetting interest. In most cases, the following principles hold true for the majority of our offerings:
Interest is compounded
Interest accrues monthly based on the outstanding balance. No immediate interest payments are necessary; instead, the monthly interest is added to the overall balance. Consequently, the balance grows each month due to compounded interest.
- Typically, loans span a 12-month term, with no penalties for early repayment.
- The shortest term feasible is one month (equivalent to 30 days), meaning interest accrues for the entire month if the loan is repaid within this timeframe.
- Beyond the initial month, interest is only calculated up to the day of repayment. For instance, if the loan is settled after 3 months and 10 days, the accrued interest would be for 3 full months plus a fraction representing the remaining 10 days of the month.
Repaying your bridging loan
Most bridging loan specialists are relatively flexible with regard to repayment period length. However, most limit their bridging products to a maximum of 18 to 24 months before full repayment is required.
Call us today for an obligation-free consultation to discuss your requirements and preferences in more detail.
Bridging Loan Eligibility
Bridging loans are designed for a specific group of borrowers seeking financial help with property purchases. Here's a brief summary of who qualifies:
- Eligible applicants include sole entrepreneurs, commercial ventures, and established corporations.
- Property Focus: Common uses include acquiring or upgrading residential or commercial buildings.
- Age Requirement: Most lenders need a minimum of 18 years old, although some may have a higher limit.
- UK residency: This requires having a registered address in the UK.
- Secured loans require collateral, often property.
- Exit Strategy is Important: A defined repayment strategy, such as selling the secured asset, obtaining long-term financing, or collecting anticipated income, is essential.
- Most lenders need a minimum loan amount of roughly £10,000.
- Employment: Your work position (employed, self-employed, or retired) is less important than the other factors indicated above.
Note: While credit history and income evidence may not be the most important elements, lenders may nonetheless consider them in some instances.
The Cost of a Bridging Loan Explained
Here's a summary of the costs often involved with a bridge loan.
- Administrative fee: This one-time cost, usually approximately £295, covers the processing and administration of the loan application. It's worth noting that this is only due if the loan is authorised and drawn.
- Valuation costs: These costs are based on numerous factors, including the value of the property, the location, and the type of report.
- Redemption Charge: This fee covers the legal costs of removing the lender's security charge on your property after you have repaid the loan.
- Solicitor Fees: The lender will engage a solicitor to handle legal issues such as loan contracts and property security. These legal expenses are the borrower's obligation.
Transparency from our end: There are no hidden fees! We do not charge broker fees, and our loans do not include any exit costs.
Remember that they are in addition to the loan interest rate. Consider these charges when calculating the overall cost of a bridging loan.