How Can You Lower Bridging Loan Rates UK?

Ways to Lower Bridging Loan Rates in the UK

• Consider a larger deposit. Bridging loan deposits are 25% of the property (or asset) value. However, deposits of 40-50% are greatly impressive to lenders, as they like a high LTV value due to the lending risk.
• Have a strong exit strategy. This is a detailed plan of how the loan will be repaid, including the high-value assets to cover it – a property sale, for example. A clear exit strategy is more enticing to UK lenders as it lowers the risk and, consequently, can lower bridging loan interest rates. An additional asset for more security can enhance your profile and chances, too!
• Avoid extending your term. While a 12-month term is still short-term, a term of 6-9 months can often lower the rate.
• Having a strong income and credit history not only aids your chances of acceptance but can lower interest rates in UK bridging loans.
• Use a lower-risk property. Having properties for commercial use and even land as your collateral is a higher risk to lenders. Instead, use residential properties. This is great news for property investors and landlords who want to grow their investment portfolios!
• Research and get multiple quotes, and even use an experienced agency that can source better rates unknown to the public.

Research or seeking professional guidance is certainly key. Bridging loans, or any loan, depends on an individual’s circumstances. CityRise does not offer financial advice, but we work with expert partners who can. Do not let uncertainty halt your property investment journey. Schedule a call with one of our property consultants to discuss your options!