Question 1

What is a bridging loan?

Accepted Answer

A bridging loan is a short-term finance product used to 'bridge' the gap between needing funds immediately and arranging longer-term finance. In Wandsworth, bridging loans are commonly used for auction purchases, chain breaks, property renovations, and as short-term funding while development finance is being arranged. Terms typically range from 1 to 24 months.

Question 2

How is bridging loan interest calculated?

Accepted Answer

Bridging loan interest is calculated monthly on the outstanding loan balance. For example, a £500,000 bridging loan at 0.55% per month would cost £2,750 per month in interest. Interest can either be serviced (paid monthly), retained (deducted from the advance upfront), or rolled up (added to the loan balance). The method chosen affects your net day-one advance.

Question 3

What LTV can I get on a bridging loan in Wandsworth?

Accepted Answer

Bridging loans in Wandsworth typically offer up to 70-75% LTV on residential property and 65-70% on commercial property. Some lenders can stretch to 80% LTV for strong applications. The LTV is based on the open market value of the property. Higher LTV bridging loans may attract slightly higher interest rates.

Question 4

How quickly can a bridging loan be arranged?

Accepted Answer

Bridging loans can be arranged within 5 to 10 working days, sometimes faster for straightforward cases. This speed makes them ideal for auction purchases in Wandsworth where completion is required within 28 days. The key to fast completion is having your documents ready — proof of ID, proof of address, evidence of exit strategy, and details of the property.

Question 5

What exit strategies do lenders accept?

Accepted Answer

Lenders typically accept the following exit strategies for bridging loans: sale of the property, refinance to a buy-to-let mortgage, refinance to a commercial mortgage, refinance to development finance, or sale of another asset. The strength of your exit strategy is one of the most important factors lenders consider when assessing a bridging loan application.

Question 6

Are there any hidden fees with bridging loans?

Accepted Answer

Beyond the interest rate and arrangement fee shown in this calculator, you should budget for: valuation fee (£500-£3,000 depending on property value), legal fees for your solicitor and the lender's solicitor (£1,500-£3,000 each side), broker fee (if applicable), and potentially an exit fee (0-1%). We always provide a full breakdown of all costs before you commit.

Bridging Loan Calculator

Enter Your Bridging Loan Details

Need a bridging loan quickly?

How to Use This Calculator

Enter the loan amount

Set the LTV percentage

Adjust the interest rate

Choose your term

Review the costs

Related Resources

Bridging Loan FAQs

Need a Bridging Loan for a Wandsworth Property?