Bridging Loan Calculator

Content

How the Calculator Works

Enter Your Loan Requirements

Enter the amount you’re looking to borrow to complete your purchase.

You can play around with this figure later if you’re considering raising some extra money for refurbishments, for example.

Enter Your Property Details

Enter the value of the property you’re looking to purchase.
Then, enter the value of any properties you already own along with your outstanding mortgages (if any).
This will be used to calculate your ‘loan to value’ ratio and establish whether you’re eligible for a bridging loan, and if so what interest rate you might expect to achieve.

How quickly do you need your loan?

Tell us how quickly you’re looking to act so we can understand your urgency.

Calculate

Provide your name and contact details, and see your results.
You’ll see whether you’re eligible, roughly what your interest rate is likely to be, how much that will cost per month (including a projection of month-by-month costs depending on when you repay), and any other costs involved.

Understanding Your Results

Lender Facility Fee: This is the fee charged by your lender, typically a percentage of your loan.
Gross Bridging Loan: This is your total loan amount including lender fees.
Interest rate: The monthly interest rate for your loan
Monthly Interest: This is the amount of interest you’ll pay each month – note, with a bridging loan, if you repay it early then you’ll stop paying interest on the same day.
Total Interest: This is the total interest over the full term of the loan should you have it for that long.
Gross Loan + Rolled up Interest: This is your gross loan amount plus all the potential  accumulated interest.
Loan to Value (LTV): This is the ratio of your total loan amount to your total property value.

Other Costs

Valuation Fees: Fees for property valuation.
Exit Fee: A fee that’s occasionally charged when the loan is paid off.
The fields above make certain assumptions based on general bridging loan rates, costs and fees to give you an initial idea. 

What is a Bridging Loan Calculator?

A bridging loan calculator gives you an idea of how much a bridging loan could cost based on the specific loan you need.

It will give you a free quote and indicative figures for you: interest rates, lender fees, valuation fees, broker fees and admin fees.

When you apply for a bridging loan with a lender (either through a broker or directly), the fees and figures may vary - as our calculator tool is just an estimate based on the basic inputted information and assumes certain factors as standard.

But it's a great tool to give you an idea of how much your project will cost, whether you're simply buying a new home before selling yours or you're looking to fund refurbishments or a development project. 

What is a bridging loan?

A bridging loan is a type of short term property finance.

They're similar to standard mortgages but are designed for the short term - usually between 12 and 18 months.

They're not designed to be long term finance solutions for buying property.

Instead, they're usually used to bridge a gap between two property transactions. Whether it's buying a property before selling your current home, or buying a property, carrying out some renovations, and then refinancing with a standard mortgage, the many uses of bridging loans are endless.

They can provide flexibility and value in the most complex or straightforward situations. And they're also very fast compared to standard mortgages.

Check out our bridging loan case studies for some real-life examples of how they work.

Our Head of Bridging, Sam O'Neill, explains the basics of bridging finance in the video below:

How Bridging Loan Costs Are Calculated

Loan to value - This is the ratio of total borrowing to total property value. Generally, the lower your LTV, the lower the rate of interest you'll pay on your loan. If more than one property is involved, securing your bridging loan on two properties can allow you to reduce your loan to value as well as the overall cost of your loan.

Property location - This is particularly relevant for properties in more remote areas of the UK, such as north Scotland and Northern Ireland, when it comes to residential property purchases. The more remote the property, the more risk there is to a lender that you may not be able to provide an exit for your bridging finance, so it can be reflected in the interest rate you pay.

Regulated or unregulated? - If the property is for personal use, it will fall under regulated lending governed by the FCA (Financial Conduct Authority). There are fewer regulated lenders in the market, so in certain situations, your options may be more limited. Regulated lending is highly competitive, so the good news for borrowers is that for loan to values below 60% the rates currently are as low as they've ever been.

Lender fees - Bridging loan lenders will typically charge a facility arrangement fee of 2% based on either the net or gross loan. For most of the lenders we use, the lender fee will be based on the net loan. Lenders may also charge a loan drawdown fee - typically £295. This fee can vary depending on the number of properties involved. When your loan is redeemed, there will also be a redemption fee. This is the cost of removing a legal charge from your property (ies) and will typically be £120.

Legal costs - A bridging loan transaction, like a mortgage, requires solicitors to complete the legal charge paperwork. The lender will have their own solicitor who will have their fees, and you'll also need to have a solicitor to represent you. Legal fees can vary and will depend on the complexity of your transaction. Some bridging lenders provide dual representation, which can reduce the overall cost.

Survey fees - As with any secured lending on an asset, your lender will generally want an independent valuation. Most UK bridging loan lenders will appoint a surveyor from an agreed panel. The cost will depend on the lender, but most work to a scale based on property value. Some lenders we work with provide what's called a desktop valuation (typically for properties valued under £1 million), which is both quicker and cheaper - we always try to negotiate these on behalf of our clients.

Broker fees - We charge a broker fee, typically of £495, for arranging finance on your behalf.

Loan exit fees - The lenders we use rarely apply an exit fee. If they are charged, it will be payable on the redemption of your loan and can be anything from 1% to 2%. Our calculator has this field set at 0% as this fee typically only applies to higher risk lending on investment land/property transactions.

How is Bridging Loan Interest Calculated?

The key difference between bridging loan interest compared to standard mortgage interest is that interest rates are displayed monthly for bridging finance.

This is because bridging loans are typically between 12 and 18 month terms, and you pay interest on your monthly balance.

The good news is that you usually only pay interest for the duration of your loan. So, if you exit your bridging loan within 6 months, you'll only pay 6 months' worth of interest even if your original term was 12 months.

We also work with lenders that provide the option of rolling up the interest on your loan, so there's no requirement to repay your interest monthly.

This can be very attractive for cash flow. If you're carrying out renovations on the property, for example, you'll need money on hand to support your project, so you don't want to worry about interest repayments. In this situation, you can add the interest to your loan balance every month and only repay it at the end as a lump sum.

When you pay off your short term loan, your redemption repayment will comprise of the original capital and the accrued monthly interest.

What are the criteria for a bridging loan? 

Your options will depend on whether the loan you require is regulated or non regulated.

Non regulated bridging loan criteria

Regulated bridging loan criteria

How to reduce the cost of bridge finance

If you're buying a property before selling an existing one, it may be possible to reduce the cost of finance by using more than one security property. By securing your bridge loan over both properties in the transaction, your overall loan cost may be lower.

If you have an outstanding mortgage on a property you're using as security, it will be factored into the overall loan-to-value calculation.

Why use Clifton Private Finance?

We're an independent company registered in England, and the Financial Conduct Authority regulates us. We have access to the best loan rates in the market for both authorised and regulated lenders, as well as private lenders, for unregulated transactions where speed is often of the essence.

We know the short-term finance market very well and can find the right finance for your situation. If you need longer-term finance to replace bridging finance once your term ends, we can also arrange that for you.

Our free bridging loan calculator is a useful tool for getting an indicative quote, but we recommend talking to us about what you're trying to achieve to get a bespoke quote for your requirements. We provide holistic, regulated bridging loan advice that looks at your entire financial situation for the best solution.

IMPORTANT INFORMATION: This bridging finance calculator is intended to provide an approximate guide only to illustrate what a bridging loan would cost.