The monthly payments of bridging loans can vary greatly, as can the total amount you repay – we will search our panel of lenders to get you the lowest costs possible.
Bridging loans only ever repay the interest for borrowing, not the capital. We will help you with your method of repaying the capital.
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The bridging loan calculator will provide you with two figures:
There other costs associated with a bridging loan (e.g. lender fee) and different ways of paying your bridging finance, which may alter the monthly and total amount you need to repay. Ask our advisers for a personalised illustration.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR BRIDGING LOAN.
There are two ways of paying interest on a bridging loan and, therefore, two ways of calculating bridging loan payments:
One thing common to all bridging loan payment calculations is that, you only ever repay the interest the lender charges. The capital remains due at the end of the loan term.
This option gives you the maximum borrowing on day one. Monthly payments on a serviced bridging loan are calculated based on paying the interest monthly. The capital lump sum must be repaid at the end of the loan.
This method of borrowing suits customers who will have a consistent, regular cash-flow, throughout the lifetime of the loan and will be able to service monthly payments without over-extending themselves.
Taking out a bridging loan with rolled up payments means you do not repay interest during the lifetime of the loan. Instead, interest owed on a rolled up bridging loan is calculated at the time of application and charged at redemption of the loan (not monthly).
It is important to understand that, when calculating costs on a bridging loan with rolled up interest, the total borrowing must be within the lenders loan to value restrictions - e.g. to calculate the amount you can borrow, you must include the amount of borrowing plus the rolled interest owed, which in total can't go over the maximum loan to value.
At present, bridging loans are calculated at the the maximum loan to value we can currently access of 75%. This means that you will have to put down 25% of the property value.
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