Get an estimate of your bridging loan borrowing costs underneath. Select the amount you want to borrow, the current interest rate and the amount of time you would like the bridging loan to last.
For a more accurate quote and help with applying for a bridging loan, please complete the form underneath the finance calculator.
What is a Bridging Loan Calculator?
A bridging loan calculator provides an estimate of the potential costs associated with taking out a bridging loan. This takes into account factors such as your desired loan amount, the value of your property, and the period of the loan. It also offers approximate figures for associated fees; however, it’s important to note that these fees can vary when you make your application for a bridging loan.
How is bridging loan interest calculated?
The main difference between interest for bridging loans and standard mortgage interest lies in how it is expressed, with bridging finance typically displaying interest rates on a monthly basis. This main reason for this is due to the short-term nature of bridging loans, which usually have terms ranging from 3 to 18 months.
With bridging loans, you pay interest based on your monthly loan balance, and you are only charged interest for the actual duration of your loan. Consequently, if you settle your bridging loan within 6 months, you’ll only be responsible for 6 months’ worth of interest, even if the original term was 12 months. Furthermore, most lenders will not typically impose fees for the early settlement of your loan.
How is interest calculated and added to a bridging loan?
Differing from a traditional mortgage, the interest on a bridging loan is calculated in three distinct ways:
Monthly: Much like an interest-only mortgage, you make monthly interest payments that are not accrued onto the loan balance. If you intend to pay the interest on a monthly basis, you will need to furnish proof of your income to verify its affordability.
Rolled Up: Interest accrues on the remaining account balance on a monthly basis. Instead of making monthly interest payments, the monthly interest charge is incorporated into the account balance for that month. Consequently, your outstanding balance increases on a month by month basis.
Retained Interest: The interest is borrowed in advance for a predetermined period, and once you have repaid the loan you get back any interest you haven’t used.
What bridging loan fees and costs are there?
The specific fees you’ll be required to pay can vary based on the lender and your individual circumstances, but here’s a general breakdown of the typical charges:
Some lenders may impose an administration fee when you initiate a loan, the usual charge for this is £145 to £995.
Lenders often require a valuation on the property you intend to use as security for your loan. Valuation fees can vary widely, ranging from being free to somewhere in excess of £2000, depending on the particular lender and how quickly you require the funds.
When you obtain a bridging loan, the lender instructs a solicitor to act on their behalf, and you sign an undertaking to pay the lenders legal fees. These can typically range from £750 to £1,500 plus disbursements and VAT. In addition, you will have to instruct your own solicitor and pay their fees.
Some lenders may charge a fee at the end of your bridging loan term to cover administrative expenses related to removing their name from the property deeds.
Broker fees can vary significantly depending on who you use. When you use our services at Pyxis Capital, we will outline our charges during consultation so you are fully aware of any fees prior to taking out your loan.
How Can You Keep the Cost of Bridging Loans as Low as Possible?
Here at Pyxis Capital our team will work with you to help get you the best rate possible for your bridging loan. We have access to a panel of lenders and will negotiate with them on your behalf to help you get the best rates of interest possible. If you are looking for bridging finance, why not contact the expert team here at Pyxis Capital to find out how we can help you secure the loan you need.