Cheap Bridging Loans | How To Compare Deals

Key Takeaways

• Cheap bridging loans offer the lowest possible interest rates, low fees, and minimal broker charges.
• The cost of your bridging loan depends largely on your loan-to-value (LTV) ratio and the broker and lender you use.
• A lower LTV typically secures a lower interest rate, which is the largest expense in a bridging loan.
• Using a whole-of-market broker like us ensures access to the best rates and terms available.
• We don’t charge a fee for our bridging loan advice, saving you approximately £500-1,000 upfront.
• We focus on the total cost of your loan, providing clear comparisons and tailored recommendations to suit your needs.

Get a cheap bridging loan from 0.55% per month interest (we’ll find you the best rate on the market) and no broker fees with Bridging Finance.

What Is A Cheap Bridging Loan?

Cheap bridging loans are a specialised form of short-term financing designed to provide fast access to funds while keeping costs low.

To ensure a bridging loan is cost-effective, it’s crucial to consider the following:

1. Interest Rates: The most significant cost factor. Lower rates make a substantial difference, particularly for larger loans.
2. Fees: Including arrangement fees, valuation fees, and legal fees, which should be competitive.
3. Broker Costs: Avoiding broker fees can save you hundreds or even thousands of pounds.

At Bridging Finance, we specialise in sourcing affordable bridging loans tailored to your financial situation, ensuring the total cost is as low as possible.

Use our bridging loan calculator to see how much bridging finance could cost you – it calculates your interest rate and monthly cost based on your loan-to-value (estimate figures only):

Why Loan-to-Value Matters

Your LTV ratio—the amount borrowed relative to the value of the property—is a key factor in determining the cost of a bridging loan.

• Lower LTV = Lower Costs: Borrowers with a lower LTV enjoy reduced interest rates, saving significant amounts over the loan term.
• Max LTV: Most lenders cap LTV at 80%. This includes your bridging loan and any existing mortgages against the property.

How Bridging Loans Work

Bridging loans operate as short-term, interest-only loans secured against a property. They are typically repaid within 12 months, either through the sale of a property, refinancing, or other financial arrangements. Here’s how the process unfolds:

Step-by-Step Process

1. Initial Consultation: Speak with our team to discuss your needs and check your eligibility.
2. Loan-to-Value Assessment: We calculate your LTV to determine the interest rate you’re eligible for.
3. Decision in Principle: We secure a decision in principle within 24-48 hours, giving you a strong position to negotiate your property purchase.
4. Application and Valuation: Submit your formal application and arrange property valuations.
5. Approval and Fund Release: Once approved, funds can be released in as little as 72 hours.
6. Repayment: Repay the loan upon the completion of your exit strategy, ceasing interest charges immediately.

Benefits of Using Bridging Finance (Free Broker Service)

Fee-Free Advice

Unlike many brokers who charge between £495 and £995, we offer completely free bridging loan advice. This saves you around £500-1,000 upfront and ensures your funds can be directed towards more pressing needs.

Whole-of-Market Access

We’re a whole-of-market broker, meaning we have access to every lender offering bridging finance. This ensures you receive the most competitive rates and terms available.

Negotiation and Transparency

We don’t just find you a loan—we negotiate on your behalf to secure favourable terms and provide a detailed breakdown of all costs. If multiple options are available, we guide you through the pros and cons of each, empowering you to make an informed decision.

Costs of a Bridging Loan

Interest Rates

Interest rates typically range from 0.68% to 1% per month, depending on your LTV and the lender’s terms. Paying off your loan early reduces the total interest owed.

Additional Fees

• Arrangement Fees: Usually 1.5-2% of the loan value.
• Valuation Fees: Property valuation costs start at around £950, though desk-based valuations may eliminate this fee for certain properties.
• Legal Fees: Borrowers pay their own and the lender’s legal fees, averaging £1,000 for properties worth £250,000.
• Redemption Fees: Charged for removing the legal charge from your property, typically £100-150.

Avoidable Fees

At Bridging Finance, we avoid products with exit fees and outdated practices that limit your flexibility. This ensures your loan remains as cost-effective as possible.

Why Choose Us?

1. Experience and Expertise: Our team specialises exclusively in bridging finance, providing unparalleled insight and advice.
2. Tailored Solutions: We customise loans to fit your unique financial situation and property goals.
3. Fee-Free Service: Save money with our no-fee advice, maximising the value of your loan.
4. Fast and Efficient: From application to fund release, we streamline the process to meet tight deadlines.
5. Transparency: We prioritise clarity and honesty, offering detailed cost breakdowns and ongoing support.

When to Use Bridging Loans

Buy Before You Sell

Secure your next property without waiting for the sale of your existing home. Bridging loans break property chains, making you a more attractive buyer.

Auction Purchases

Meet the tight 28-day completion deadlines often required for auction properties. Bridging loans ensure you have funds ready to act quickly.

Renovation Projects

Purchase unmortgageable properties, complete necessary renovations, and refinance or sell for a profit.

Urgent Financial Needs

From repaying an interest-only mortgage to covering care fees, bridging loans provide interim funding for time-sensitive situations.

FAQs About Cheap Bridging Loans

Is a bridging loan worth it?
Yes, if the benefits of completing your transaction outweigh the financial costs.

Do I pay a bridging loan monthly?
No, interest is usually rolled up into the loan and repaid upon exit.

Do I need a salary for a bridging loan?
No, eligibility is based on your LTV and exit strategy, not income.

What happens if I can’t repay my loan?
The lender may repossess your property. This is why sound advice and planning are critical.

Get Started Today

At Bridging Finance, we’re committed to finding you the best deal on the market. Contact us today for fee-free advice and a tailored bridging loan solution that keeps costs low while meeting your needs.