Estimated Additional Costs
Loan Settlement Amounts
This bridging loan calculator is intended to provide a detailed example of what a bridging loan could look like if your business was to apply. Although the details of the loan displayed above are considered typical figures for the market, this is not intended to be used as a quote and the loan example above is for display purposes only. In order to get an accurate quote for your loan requirements please contact us for more information and one of the team will be happy to help.
Using a bridging loan calculator allows you to work out exactly how much you’re going to pay for utilising bridging finance. Most calculators offered a clear indication of both ongoing loan rates and repayment costs. However, calculators won’t be able to include any additional fees that certain lenders may provide.
As ever we caution that all borrowers do their due diligence on the finance you’re considering, to avoid any surprises further down the line.
Who Might Benefit from a Bridging Loan Calculator?
Bridging loans, like any form of finance, are dependent on a number of factors including the larger fluctuations in the market, as well as the particular offerings made my lenders at any point in time. Anyone considering a bridging loan is likely aware that this form of finance can be more expensive than traditional mortgages or bank loans. It works well for a shorter period of time but can become onerous if an existing property fails to sell.
Using a bridging loan calculator is an important first step in considering the viability of using this form of finance. The calculators will also demonstrate how fluctuations in interest rates can have sizeable effect on your overall monthly repayments.
What do the Calculators Include?
The best calculators will cover the following:
- Amount of Money required to borrow
- Loan Duration
- Value of Property to be used as loan security
- Is property used as security
- Any balance of current outstanding mortgage
- Rolled up or monthly interest?
- Early Settlement Amount
Additional Fees Which May Not be Covered by the Bridging Finance Calculator
- Lender Facility Fee
- Property Valuation Fees
- Legal Costs
- Administration Fees
- Exit Fees
- Broker Fees
The Accuracy of Your Financial Data is Essential
Not only is it crucial to be as precise as possible when inputting your financial data, you should also be aware that these types of calculators are at best an estimate. Each loan application will have a different case history and set of credit scores behind it, meaning each one must be considered on its own merits by the underwriters. Using a bridging loan calculator is a useful place to start, but it may be that speaking with an expert could yield you a substantially different figure.
Bridging Finance Loan to Value Ratio (LTV)
Loan to value ratio means the percentage of your equity which a provider will lend you. So if your property is worth 1,000,000 (and you own it outright), you could borrow 500,000 at a 50% LTV.
With bridging finance, a typical LTV might be 65% with some lenders stretching up to 80% in specific circumstances.
Retained Vs. Monthly Interest
You’ll see two interest options on our calculator: retained or monthly.
Monthly interest is fairly self-explanatory, you’ll pay an agreed monthly interest amount on your bridging loan.
Retained interest means the total interest for the agreed duration of the loan is calculated and charged upfront. So if you’re borrowing 100,000 at 1% interest over a 12 month period, you would receive £88,000 from the lender.
NB, more bridging loans are offered on a retained interest basis,
Gross Vs. Net Loan Amount
Gross loan amount refers to the total amount borrowed including interest fees, plus any additional charges the lender includes. This is the figure you’re going to have to repay to the finance provider.
Net loan Amount is the amount that will arrive in your bank account, minus the agreed fees and charges. This is the figure upon which you can base your plans for what to do with the money, i.e. property renovation.
Finance brokers typically charge a fee of around 1% which is added on to the initial payment.
If you’re working with a broker use the figures provider to add in to what the calculator provides.
NB, Business Expert do not charge any fees for the bridging loan introducer service we provide. We are paid a commission by the lenders which will not impact your costs in any way, nor result in a higher quote than had you gone to them directly.
It’s worth understanding that bridging loan interest rates are much higher than those from a conventional mortgage. The interest is also charged monthly at an average of around 1.5%.
Bridging loans are a form of short term finance that is quick to arrange. Once a lender has made you an offer it’s possible to mobilise the funds in a matter of a few days assuming you’re organised with your side of the paperwork.
Standard bridging loans are 12 months or less, though in some cases they can stretch to 24.
In the right situation, bridging loans are an ideal form of finance. So they’re a good idea assuming you understand the figures, choose a reputable provider, and have a solid exit strategy.
While all lenders have their own criteria, the simplest way to find out if you personally qualify is to fill in our short form and tell us the details of your situation. We’re expertly placed to find you the right lenders with the most competitive deals.