Examples of Bridging Loans
Bridging loans are designed to provide short-term funding when timing is critical. They can be used in a wide range of situations where you need quick access to finance before longer-term arrangements are in place.
Example loan repayments
Example 1
Purchase Price: £450,000
Loan Requested: £225,000
Term: 9 months
Net LTV: 50%
- Interest Rate: 0.47%
- Monthly Interest: £225,000 × 0.47% = £1,057.50
- Term: 9 months
- Total Interest: £1,057.50 × 9 = £9,517.50
- Lender Arrangement Fee (1%): £2,250
Loan Amount: £225,000
Arrangement Fee: £2,250
Total Interest: £9,517.50
Total to Repay: £236,767.50
Example 2
Purchase Price: £800,000
Loan Requested: £480,000
Term: 12 months
Net LTV: 60%
- Interest Rate: 0.62%
- Monthly Interest: £480,000 × 0.62% = £2,976
- Term: 12 months
- Total Interest: £2,976 × 12 = £35,712
- Lender Arrangement Fee (1%): £4,800
Loan Amount: £480,000
Arrangement Fee: £4,800
Total Interest: £35,712
Total to Repay: £520,512
Example 3
Purchase Price: £1,200,000
Loan Requested: £720,000
Term: 6 months
Net LTV: 60%
- Interest Rate: 0.75%
- Monthly Interest: £720,000 × 0.75% = £5,400
- Term: 6 months
- Total Interest: £5,400 × 6 = £32,400
- Lender Arrangement Fee (1%): £7,200
Loan Amount: £720,000
Arrangement Fee: £7,200
Total Interest: £32,400
Total to Repay: £759,600
Common uses for bridging finance
- Buying a new home before your current property sale is complete
- Purchasing land or property at auction with fast completion deadlines
- Raising capital quickly to cover urgent expenses or investment opportunities
Other scenarios where bridging helps
- Funding refurbishments before moving to a buy-to-let or mortgage
- Extending an existing facility with re-bridging if a sale is delayed
- Using a 2nd charge bridging loan to release equity while keeping your main mortgage in place
