To get the funds you need to finance your property development project you need to know:

  1. 1.

    How much you need to borrow: Lenders could offer loans from just 5,000 up to 500 million.

  2. 2.

    The current value of the property you plan to develop: Lenders will limit what you can borrow up to a maximum percentage of the property value.

  3. 3.

    How long you need to pay it back: Loans can last from just a few days, up to two years or more. The longer you borrow for, the more it will cost in interest.

You can then use this comparison to see the lenders who offer bridging finance for property development purposes.

Alternatively, you could speak with a qualified broker who can take you through the different options to find a loan for you.

Getting the right property finance

The main cost of bridging finance is the monthly interest rate, so you need to find a loan that offers the lowest possible rate.

Bridging loans tend to come with expensive fees too, so check exactly what you have to pay before you proceed. Typical fees can include:

  • Arrangement fees: This is the cost of setting up your loan and is normally a percentage of the amount you borrow, but can also be a fixed cash fee. Most lenders charge between 1-2%.

  • Broker fees: If you use a broker to find your bridging finance, you normally have to pay them a fee. This could be hundreds, or sometimes thousands of pounds, but could be worthwhile if they can find you a cheaper loan.

  • Exit fees: This is the cost of paying back your loan early. Not all lenders charge exit fees, but those that do typically cost around 1% of your loan amount.

There may be other fees to pay, so always check the total cost before you proceed.

Bridging loans for property development FAQs

Q

Can I get a loan if I am waiting to sell another property?

A

Yes, this is a common reason for a bridging loan. If you are waiting to sell a property but another is available you could get a loan to avoid missing out.

Q

Can I get a loan if I buy a property at auction?

A

Yes, if you have won an auction bid and need funds to complete the purchase, you could use a bridging loan.

Q

How much could I borrow?

A

This depends on how much your security is worth; most bridging lenders let you borrow between 65-75% of your property value.

Q

Can I get a loan for an uninhabitable property?

A

Some lenders may give you a loan, even if the property is currently uninhabitable. But only if you plan to redevelop it.

Q

Can I use a bridging loan to build my own home?

A

Yes, you may be accepted if you apply, but a self-build mortgage is likely to be a better choice.

Q

Can I get a bridging loan in Scotland?

A

Yes, but some lenders don't cover Scotland, so you will need to check this before you apply for the loan.

About our bridging loans comparison

Q

Who do we include in this comparison?

A

We include bridging loan lenders from our broker, Mortgages Warehouse. Here is more information about how our website works.

Q

How do we make money from our comparison?

A

We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.
You do not pay any extra and the deal you get is not affected.