Why should I use this type of bridging loan?

A Bridge to Let loan is specifically designed for those looking to purchase a Buy to Let (BTL) property. They differ from standard purchase bridging loans due to the built-in exit strategy. This is in the form of refinance onto a traditional Buy to Let mortgage, which starts immediately and automatically at the end of the bridging loan.

 

Benefits

• Financial visibility: because rates for the bridging loan and the remortgage are negotiated from the outset, this reduces risk and makes financial planning easier.

• High LTV lending is available. The loan-to-value (LTV) ratio is another notable aspect, with most lenders willing to extend financing up to 75% LTV, while certain non-regulated property developer loans may reach up to 100% LTV, contingent on the specific circumstances and asset securities involved.

• Work out your exit route. However, the acquisition of bridging finance necessitates a well-defined exit strategy, ensuring a clear pathway for loan repayment at the term's conclusion, typically through property sales or long-term mortgage arrangements.

• No early repayment fees. An advantageous facet of bridging loans is the absence of early repayment fees commonly associated with long-term mortgages, offering borrowers the freedom to settle the loan ahead of schedule without incurring significant penalties, as bridging loans are tailored for short-term financial needs with flexible minimum terms, often as brief as one or three months. Additionally, interest is typically calculated solely on the duration the loan is outstanding, promoting cost-effectiveness and financial efficiency for borrowers.