Try our bridging finance calculator to get an idea of how much you can borrow, what your interest rate will likely be, and the other costs and fees (including how much it’ll cost month-by-month). You can play around with the numbers to see how borrowing more or less could affect your rate and costs.
How to Use the Bridging Loan Calculator
This guide outlines each field, explains its purpose, details the calculation logic, and provides insights on how to interpret the results.
Step 1: Input Your Loan Requirements
Field: Loan Required
- What It Means: Enter the amount of money you need to borrow for your property purchase or project.
Step 2: Enter Property Values
Field: Property Purchase Value
- What It Means: Enter the total value of the property you are purchasing.
Field: Other Property Value
- What It Means: Enter the total value of any other properties you own that will be used as security for the loan.
- Purpose: Additional property value adds to the security, reducing the overall LTV.
Step 3: Enter Existing Debts
Field: Outstanding Mortgages
- What It Means: Enter the total amount of any outstanding mortgages or debts on the properties being used as security.
- Purpose: Outstanding debts reduce the total amount available for borrowing.
Step 4: Understand the Calculations
Loan-to-Value (LTV) Calculation
- How It Works: The calculator adds the loan amount and any outstanding mortgages, then divides this by the total property value (purchase property + other properties). The result is multiplied by 100 to get a percentage.
- Purpose: The LTV determines eligibility and the rough interest rate you’ll pay.
Interest Rate
- How It Works: The LTV provides an estimate monthly interest rate:
- ≤ 55% LTV: 0.55% monthly
- 55-65% LTV: 0.68% monthly
- 65-70% LTV: 0.73% monthly
- > 70% LTV: 1% monthly
- Purpose: A lower LTV results in a lower interest rate.
*for illustrative purposes only and exact rate may vary
Effective Loan Amount
- What It Includes: The loan amount plus the lender’s facility fee (1.5% of the loan required).
- Purpose: This is the amount on which interest is calculated.
Step 5: Review Results
Monthly Breakdown
- What It Shows: A month-by-month breakdown of the total loan balance, reflecting compounded interest over time and the balance you’d repay depending on what month you’re able to exit.
- How It Works: Each month compounds the interest on the growing loan balance.
Other Costs
- What It Includes:
- Lender solicitor fees
- Valuation fees
- Administration fees
- Broker fees
- Lender facility fee (already calculated)
- Purpose: Provides a total of fixed costs associated with the loan.
Total Effective Cost
- What It Means: The total cost of borrowing, including interest and fixed fees, minus the loan amount and lender facility fee (to avoid double-counting).
Step 6: Interpret the Results
Eligibility
- What It Shows: Whether the loan request is within the allowable limits (LTV ≤ 80%).
- How It Helps: Helps you understand if your loan request is realistic or requires adjustment.
Interest Rate
- What It Shows: Your estimated monthly interest rate based on LTV.
- How It Helps: Provides a clear understanding of your cost of borrowing.
Monthly Breakdown
- What It Means: Helps plan your repayment schedule or understand how interest accrues depending on when you repay.
Total Effective Cost
- What It Means: Shows the overall financial impact of the loan, including fixed fees and compounded interest.
Key Considerations
- Repayment Planning: Use the monthly breakdown to estimate when you can repay the loan to minimise costs.
- LTV Management: Lowering your LTV by adding more property value or reducing loan size can result in better rates.
- Consultation: Give us a call if you’re unsure about the process!