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John Corey · 16-07-2012, 09:32 PM

To all,

I would like to hear from anyone who knows what sorts of charges, fees (front or back) and rates people are paying for bridge loans.

Think of it as a bit of a survey without the formality of a property survey form.

Paul Cummings · 16-07-2012, 10:29 PM

Hi John

I haven't done one for 5 months and only use them occasionally for purchases under 50k as decent and speedy mortgages are tough below this level. Below are fees paid on last deal. It adds up to quite a bit especially with the additional remortgage fee to add on at refinance after 6 months.

Purchase Price 40,000
Valuation 56,000 (pre works, 75k-80k after 10k works)
Bridge @ 75% 42,000
Bridge fee for 6 months @ 1.25% 3,150.00 Deducted From Loan
Their Legals 495.00 Deducted From Loan
Valuation Fee 170.00 Deducted From Loan
Admin Fee 1,000.00 Deducted From Loan
Facility Fee @1.5% 630.00 Deducted From Loan

There is also the final months fee as you can't remortgage until the 6 month point and as discussed the remortgage fee if going this route. I try not to do too many bridges due to the costs which have risen steadily but only had to put about 3k and the refurb into this deal which rents at £475pcm.

Suncoast · 16-07-2012, 10:40 PM

Paul u should have come 2 me!

John I typically charge the following for bridges:

1% processing fee at the start and end

1.25% to 1.5% per month for first 6 months

1.5% to 1.75% per month for 7 to 12 months

Repayment at above rate for 48 months

Also allow part payment at any time after 3 months and pull down at various stages.

If I also fund the refurb - payment is in stages and only after each drawdown is interest charged.

Have tried to align my offering 2 typical investors requirements.....

John Corey · 17-07-2012, 10:15 AM

Thanks Paul and Suncoast. This is the type of detail I am interested in.

Hopefully others will add their observations.

If I get enough replies I will figure out a way to put everything in a table so it is easy for people to see the range of costs or fees.

BTW - I am not saying bridging is expensive or anything else. I am just trying to get some hard data on what people are used to paying or what they are used to charging.

More4 Loans · 17-07-2012, 03:51 PM

Hi John

It will be difficult to collate accurate figures as lenders can vary from enquiry to enquiry and will often negotiate on rate & fees if the deal is particularly attractive to them. What they don't tend to negotiate on a max LTV's.

Best monthly rate we've found is 0.55% on a 1st charge bridge but the lender fees on a gross loan of £115,000 were £9,775 with legal fees of £1275.

On a 2nd charge bridge you'd be lucky to find any lender that will beat 1.25%pm and the fees we were quoted recently on a £180,000 loan were: arrangement fee £3608 and sols fees £1750.

Terms are generally available up to 12 months although a couple of lenders will consider longer (up to 36 mths) provided a clear exit route is evident.

Bridging remains an unregulated activity and most lenders will only consider unregulated properties (BTL, commercials etc) as they are not FSA authorized. There are however a few lenders that have signalled their longer term commitment to the market and gained FSA authorization.

John Corey · 27-07-2012, 08:34 AM

More4 Loans,

Thanks for the detail. I do understand that as a niche, lenders servicing the sector will cherry pick or customize the offering to the deal. I was trying to get a better sense of what people have seen out there. Your examples are quite helpful.

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