Bridge loan interest rates explained

8 Jan 2020 by Top Tier Bridging Loans

bridge loan, interest rates

Bridge loans are short-term loans used most commonly for property to bridge the gap between selling one property and purchasing a second, and is usually part of a longer-term financial arrangement.

At Top Tier, we arrange loans from £100,000 to £5,000,000 with a minimum term of three months to a maximum term of 24 months. (Other lenders on the market who offer bridge loans with different limits and with a term of up to 36 months.) The loan amount is based on the value of your property it is secured against, and can be anything up to 80% of that value.

The interest is the amount of money to be paid for the cost of the loan. Bridge loan rates are different to interest rates for other types of finance.

How bridge loan interest rates are different

Bridge loan interest rates are usually higher than other finance options. For this reason bridging loans should only be used as a short-term finance option.

With a wide range of lenders, we have access to some of the most competitive bridge loan interest rates on the market in order to get you the best possible deal for your bridge loan.

What bridge loan interest rate will I get?

The bridge loan interest rate offered is dependent on a number of factors, but primarily it is based on the value of the property. In addition, each case is assessed on its individual merits and can include factors such as the size of the loan, term of the loan, and type, condition and location of property.

When comparing bridge loan interest rates, it is also important to consider the total cost of the loan, which is the amount borrowed plus interest plus any other costs. At Top Tier, the only upfront fee chargeable is the valuation fee.

How the bridge loan is repaid?

Each lender will have their own criteria for how the loan and interest is repaid. With a bridge loan arranged through Top Tier there are no monthly repayments. The interest is paid at the end of the agreement. This gives you the time and space needed to achieve the best use of your capital. If you wish to repay the loan early there is no exit fee or early repayment charges – you just pay the full cost of the loan.

When comparing bridge loan interest rates, it is also important to consider the total cost of the loan is the amount borrowed plus interest plus any other costs. It is important to consider any other costs on top of the bridge loan interest rate. At Top Tier, the only upfront fee is the valuation fee.

If you are looking to get a bridging loan or have any further questions regarding interest rates, get in touch!

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