Need a bridging loan example?

If you’re considering a bridging loan, it might be helpful to see an example of a typical finance deal, with a breakdown of the costs and charges.

A Typical Example is as Follows:

Assuming a bridging loan of £300,000 is required, here’s what you should expect to pay.

Property Sale Price £800,000
Total Amount of Bridging Finance £300,000
Typical Monthly Interest (at 1.5%) £4,500 pm
Typical Arrangement Fee £4500
Typical Exit Fee £4,500

Typical Monthly Interest

Assuming an average rate of 1.5%, you would pay £4500 per month in interest repayments.

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    Meeting Payments with Retained Interest Bridging Loans

    Some bridging loans facilitate borrowers making payments more easily by keeping the interest until the end. This means that a 12 month bridging loan for £300,000, using retained interest, you would pay £54,000 at the end of the loan term.

    These type of loans are ideal for borrowers who have a clear exit strategy in mind but cash flow problems in the interim. 

    Example Bridging Loan Arrangement Fees

    Using an average of 1%, arrangement fees for a 300k bridging loan could total another £4500

    Exit Fees Example

    Some lenders charge exit fees, which are generally about 1%, or another £4500 in the example given.

    Valuation Fees Example

    Property Valuation fees are not covered by this example. An average property company might charge around £750 to value a £500,000 property.

    Typical Legal Fees for Bridging Finance

    Again, these will vary widely depending on the type of legal firm you are using. You should expect a fee of at least £2000 for legal services provided in setting up a bridging loan.