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Bridging rates

Journalist: Anna Sagar, Mortgage Solutions / Specialist Lending Solutions

ended 29. September 2022

Looking to talk to mortgage brokers about bridging rates for our SLS In Focus series. 

  1. What are average bridging rates like now for regulated and unregulated bridging? Is there significant range between rates or are they in the same ball park?
  2. What is the trajectory for bridging pricing? Does it need to rise or fall and if so why? 
  3. What is your advice for customers looking at bridging?

3 responses from the Newspage community

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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
Bridging is upwards from around 0.5% currently. Non-regulated is traditionally more expensive than regulated. The lower the loan to value, the cheaper the rate you will acheive. If anyone is considering taking a bridging loan then speaking with a specialist mortgage broker that has access to the whole of the market is recommended. Speaking with an advisor who has direct access to lenders rather than using an intermediary will help to ensure a speedy process. Third party involvement can only slow things down. Bridging should be fast. Using the right solicitor to transact the deal is key, as the common issue within bridging at the moment is the delays once it hits the legal stage.
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Rob Peters
Principal at Simple Fast Mortgage
Although bridging rates have had to increase slightly, they have not been affected in the same was as traditional mortgages. Bridging rates tend to start around 0.45% per month. Things such as the perceived risk of the deal and applicant, the loan to value ratio, or sometimes length of loan required, will dictate the rate available. For instance an inexperienced non-UK national wanting to do heavy refurbishment work is broadly going to get rates around 0.8% to 1% per month. In contrast a UK based buy to let investor looking to use bridging to buy a property at auction would expect a much lower interest rate. Not all bridging providers were created equally and it's important to get the right tool for the job. Never select a provider purely based on cost. Some providers are better for speed, and some better for specific client types, or projects such as renovations or developments. Bridging finance is usually an unregulated market which means it's fairly easy to set up as a bridging provider. Bercause of this it is important to work with a broker who knows which providers to use, and which to avoid.
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Vincent Burch
Mortgage Broker at Vincent Burch Mortgage Services
With everything going on in the market bridging really hasn't currently changed much in pricing. The difference between regulated and non regulated bridging is very similar with rates being around .75% a month and 2% arrangement fees. I can't see the rates staying as cheap as they are currently with the overall cost of borrowing rising as quickly as it has over the last few months. If you are looking for a bridge my advice would be to get in and out, and as quickly as possible. Have your trades lined up ready for completion day and also have your exit mortgage lined up as well so you can exit out extremely quickly and keep your profits as high as possible.