A home can not only serve as an excellent long-term investment, it gives you a place to call your own and grow your family, or even a homestead.
That’s why more and more people are investing in real-estate these days. And that means there’s a higher demand for affordable homes that don’t cost a fortune to buy or maintain over the long term.
You probably should be a creditor (providing resources) rather than a debtor (borrowing resources) - but seeing as you are here, the following are some of the best bridging loans today.
Table of Contents:
1. United Trust Bank – Widely Popular Bridging Loans Provider
United Trust Bank is a UK-based provider of a wide range of financial services to businesses and consumers.
The trust was founded in 1892 and has since grown to become one of the country’s leading lenders.
United Trust Bank specialises in bridging loans, which are short-term loans that help people purchase homes or other types of assets. The bank offers a variety of bridging loans that are designed to meet the needs of different customers including post-pandemic businesses.
What are the Benefits of United Trust Bank Bridging Loans?
There are several benefits to using United Trust Bank bridging loans. First, the loans are tailored to meet the specific needs of individual customers. This means that you can be sure that you’ll be approved for a loan no matter what your situation is.
Second, the loans are affordable and easy to get approved for. Third, the loans have low interest rates, which makes them a good option for borrowers who have poor credit scores or who need to borrow a small amount of money.
Finally, United Trust Bank offers a variety of repayment options, so you can choose the one that works best for you.
Can I Get Approved for a Bridging Loan from United Trust Bank?
Yes, you can get approved for a bridging loan from United Trust Bank. The bank offers several different types of loans that are designed to meet the needs of different customers.
United Trust Bank's bridging loan is one of the most popularly-used bridging loans in the UK, this option allows homeowners to borrow up to £150,000 to help them purchase a home. The interest rate is fixed at 4.9%, and there’s no need to provide any documentation or proof of income.
Feature Number One: The interest rate is fixed at 4.9%, so you know exactly what you’re paying every month. The interest rate for the United Trust Bank bridging loan is 4.9%. This is among the lowest interest rates for a bridging loan that you could get from a bank at the amount specified.
It’s important to remember that the United Trust Bank is a trust, not a financial institution. It is a legal structure, not a company. This means that it does not have to abide by the same regulations that a regular bank has to abide by. Therefore, it can charge a lower interest rate than a regular bank. You will probably be able to find a lower interest rate on a bridging loan from a regular bank.
Feature Number Two: There’s no need to provide any documentation or proof of income, which makes this a great option for those who don’t have any credit history or assets to fall back on. Overall, the United Trust Bank bridging loan is an interesting choice for those looking to buy a home without having to put any money down upfront or save money.
2. Nationwide – Established Bridging Loans Company
Nationwide is one of the largest banks in the UK. It was founded in 1748 and is currently a subsidiary of the American banking giant, JPMorgan Chase.
As with United Trust Bank, Nationwide is a trust, not a financial institution. This means that it does not have to abide by the same regulations that a regular bank has to abide by. As such, Nationwide can charge a lower interest rate on loans than a regular bank.
What Is the Interest Rate?
Once again, a target interest rate you might expect for Nationwide bridging loan, according to your credit, is around 4.9%. Which is one of the lowest interest rates for a bridging loan that you can get from a bank for a significant amount of cash.
This loan is perfect for first-time homebuyers who don’t have a good credit score or enough money saved up for a down payment and have no problem with becoming debtors and the mental health issues associated with debt, particularly while the world undergoes a recession. You can borrow up to £200,000 with an interest rate of 3.9%.
Overall, the Nationwide Bridging Loan is a notable option for first-time homebuyers. It potentially has a low interest rate and doesn’t require any documentation or proof of income.
3. HSBC Advance – Reputable Bridging Loans Provider
What is the HSBC Advance Bridging Loan?
The HSBC Advance Bridging Loan is a loan that is available to homeowners in the UK who are facing financial difficulties. This loan can be used to help finance a down payment on a home, cover some of the costs associated with buying a home, or cover other expenses related to buying a home.
This loan can be borrowed over either 6 or 12 months. There is no interest charged on this loan, and the repayment period is typically ten years.
HSBC Advance Bridging Loan is a great option for homeowners who are looking for a short-term solution to bridge the gap between when they can afford a down payment and when they can get their mortgage approved.
Once again, a guide-point interest rate might be somewhere around 4.9%. This is potentially around the same as interest rate as the Nationwide Bridging Loan, but it’s still a good option if you need a short-term loan to cover some of your down payment costs.
The HSBC Advance Bridging Loan is also available to homeowners in the UK. So, if you’re interested in this loan, you’ll be able to use it no matter where you live in the UK.
4. Virgin Money – Popular Bridging Loans Firm
Virgin Money is a UK-based bank that offers a wide range of banking products and services.
Virgin Money's Bridging Loan is a unique product that allows borrowers to borrow up to £50,000 to help them purchase a property.
How the Virgin Money Bridging Loan Works
To qualify for the Virgin Money Bridging Loan, borrowers must have a good credit score and meet specific requirements related to their income and assets. Once these requirements are met, borrowers can apply online and receive a response within 24 hours.
A guide-point for the interest rate on the Virgin Money Bridging Loan could be somewhere around 3.9%, according to your credit, which is potentially lower than the interest rate on most other types of loans available to first-time homebuyers. The Virgin Money Bridging Loan also has no origination fees, which makes it an affordable option for borrowers who are looking to purchase their first home.
The Virgin Money Bridging Loan is available to homeowners in the UK and can be used to purchase any property worth up to £250,000. This makes the Virgin Money Bridging Loan an attractive option for those who are looking to purchase their first home or upgrade their current home.
5. CitiMortgages – Popular Bridging Loans Service
Bank of America Merrill Lynch (BAML) is a global financil services company that provides banking, investment, and insurance products and services.
CitiMortgages is a division of Citi that provides consumer loans, such as mortgages.
Which makes the CitiMortgages Bridging Loan a notable option for those looking for a low-cost way to get into the market who have decided that budgeting long-term is not a viable alternative approach. The loan is available to residents in the UK and Ireland, with a guide-point interest rate of 4%. And a fast and easy online application process.
If you have excellent credit and are able to make monthly payments on time, Citi Mortgages offers borrowers up to £275,000 with an interest rate of 4%.
Features: This loan offers borrowers the opportunity to purchase a property up to £275,000. The loan is available up to 85% of the purchase value, and you can borrow up to 95% of the value of the property. This means that you will only need a 5% deposit.
If you are purchasing a property through a corporate entity, you can still apply for a CitiMortgage. You will need to provide proof of the corporate entity purchasing the property, such as an exchange of contracts. CitiMortgage will then work with the corporate entity to ensure that the property is transferred into their names. The corporate entity will then need to submit an application to CitiMortgage. Once the corporate entity has submitted the application, the company will then transfer the funds into their account.If you are purchasing a property through a limited company, you can still apply for a loan.
You will need to provide proof of the limited company purchasing the property, such as an exchange of contracts. CitiMortgage will then work with the limited company to ensure that the property is transferred into their names. The limited company will then need to submit an application to CitiMortgage.
Once the limited company has submitted the application, CitiMortgage will then transfer the funds into their account.
6. Barclays – Popular Bridging Loans Service
Barclays is a British bank that was founded in 1694. The bank offers a bridging loan that is designed for borrowers who have excellent credit and monthly payments on time.
The bank offers a bridging loan that is designed for borrowers who have excellent credit and monthly payments on time.
Barclays is a large international financial services group operating all around the world. Barclays bank offers this loan in the United States and Canada. You can apply for this loan by contacting the bank directly or through a broker. As a rough guide-marker, you can roughly expect to receive a loan yield of 5%. To meet the qualifying criteria for this loan, you must be at least 18 years old.
Feature Number One: The Barclays Bridging Loan is perfect for people who want a fast and easy online application process. You can apply online and receive a response within minutes. Plus, you don’t need excellent credit to qualify for this loan. All you need is a good credit score and monthly payments on time.
Feature Number Two: This loan offers borrowers the opportunity to purchase a property up to £275,000. So, it’s perfect for people who want to buy their first home or upgrade their current one. The interest rate on this loan starts as low as 4% but the actual rates vary tremendously. Overall, the Barclays Bridging Loan is a great option for those who want to buy a property quickly and easily.
7. FS – Established Bridging Loans Service
FS Bridging Bank is a subsidiary of the French financial services company, Fortis. The company was founded in 1996 and is headquartered in Paris.
FS Bridging Bank provides financing solutions to small and medium-sized businesses in France and internationally.
How Does FS Bridging Bank Work?
FS Bridging Bank offers a variety of financing products to small and medium-sized businesses. These products include commercial loans, Lines of Credit, and export finance. The benefits of using FS Bridging Bank include fast and easy online applications, low interest rates, and flexible terms.
Who Is Eligible for FS Bridging Bank?
FS Bridging Bank offers financing solutions to small and medium-sized businesses in France and internationally. The maximum amount you can borrow with FS Bridging Bank is €2 million.
8. Octopus Real Estate – Popular Bridging Loans Service
Octopus Real Estate Bridging Loan is a UK-based company that provides financing products to small and medium-sized businesses in the real estate industry.
Octopus Real Estate Bridging Loan is a UK-based company that provides financing products to small and medium-sized businesses in the real estate industry.
Octopus offers a variety of loan options, including property purchase loans, investment property loans, renovation loans, and hotel and vacation rental loans. Octopus also has a selection of real estate bridging loan products that can be used to finance the purchase of investment properties, vacation rentals, commercial real estate, and other investment properties.
With Octopus, you can choose the length of the bridging loan term and the rate that it will be offered at. Octopus offers a variety of loan lengths, including one month, six months, one year, two years, and more. You can also choose the APR offered on the bridging loan.
Who Is Eligible for Octopus Real Estate Bridging Loan?
Once again, this loan supplier offers financing solutions to small and medium-sized businesses in the UK and internationally, and the maximum amount you can borrow with Octopus Real Estate Bridging Loan is £2 million.
This section provides surrounding context that may be useful for understanding how to navigate bridging loans. Apply this information to improve your awareness of key aspects of bridging loans and how they work.
How to Get a Bridging Loan
There are several ways to get a bridging loan, including taking out a home loan from a commercial lender, a bank or a building society.
What you choose to do depends on your situation and the type of loan you want. For example, home loans from a bank or building society usually come with higher interest rates than those from a specialist lender.
That said, the best way to get a bridging loan is to shop around for the best rates and providers whether as an individual or business. You can comparison-shop around for a bridging loan or other financial products such as a mortgage.
Once you have your bridging loan in place, it can help you buy a property without tapping into your savings or credit score. However, keep in mind that you’ll likely have to pay higher interest rates on your bridging loan because it’s used as a “bridge” until you get your mortgage.
Which Type of Bridging Loan Should you Apply for?
There are many different types of bridging loans. Some of the more common types include:
- Home Equity Line of Credit (HELOC): This loan uses the equity in your home as collateral. HELOC rates are usually high, but you can use them for a wide range of purchases. Consult your lender for specific limits.
- Home Improvement Loan: If you need to finance home improvements, such as a renovation or home extension, this is a good option.
- Second Mortgage: If you have enough equity in your property to qualify for a second mortgage, you can get a short-term loan.
- Reconstruction Loan: If the value of your home has decreased significantly, you may be able to qualify for a reconstruction loan.
Which lenders offer bridging loans? (That have not yet been mentioned above)
There are a handful of specialist lenders that offer bridging loans as part of their regular range of products. However, you may qualify for a lower rate if you shop around for the best deal. Some of the best providers of bridging loans include:
- Admiral Bank: This is a catch-all lender that offers a variety of products.-
- Avery Hill: This is a specialist provider of home loans and mortgages.
- Better Mortgage: This is a specialist lender that offers a range of mortgage and loan products.
- Borrow Direct: This is a leading provider of home loans and mortgages.
- Capital One Mortgage: This is one of the largest credit card companies in the United States and Canada.
- Newton Finance: This is a specialist provider of home loans and mortgages.
Fees and Conditions of a Bridging Loan
Bridging loans usually come with higher interest rates and fees than a standard home loan. That said, some providers may offer a lower rate or a discounted rate if you take out a longer loan period or have a lower rate loan. To get a better idea of what to expect, compare the terms of different loans offered by different lenders.
Some of the main terms you should look out for include:
- ☑️ Loan amount: The amount you borrow will depend on the loan type you choose.
- ☑️ Interest rate: The interest rate will likely be higher than what you currently pay.
- ☑️ Payment schedule: The repayment schedule and how much you pay each month will depend on the loan type you choose.
- ☑️ Fees: Other fees may include application and origination fees, administration fees and any exit fees if you choose to repay the loan early.
Top Bridging Loans 📒 – FAQs
Borrow With No Deposit (NED)
NED is a type of bridging loan that allows you to borrow up to 100% of the value of a property without a deposit. To qualify, you’ll need to pass an inspection of the property, have a valid mortgage and be able to repay the loan. You can take out a NED loan for a maximum of six months. However, most providers will grant you a maximum loan period of two months. When you take out one of these loans, the lender will usually charge an application fee and a loan arrangement fee. The application fee will usually be around 1% of the loan amount.
Step-Fixed Rate Mortgage (SFRM)
If you want to get a bridging loan, but you don’t have a great credit score and a ton of cash available, you may want to consider a step-fixed rate mortgage (SFRM). These are usually short-term fixed rate loans that last for up to three years. You can take advantage of a SFRM if you already have a mortgage or loan from a bank or building society. To help you get a better rate and a shorter repayment period, lenders may make you pay extra if your credit score is low.
Standard Variable Rate (SVR) Mortgages
SVR mortgages allow you to get a bridging loan, but with a risky element. These are the standard variable rate mortgages that were popular in the mid-2000s. Banks and building societies may offer these loans, which are linked to the Bank of England’s SVR. That means they change every few months based on the market’s prevailing interest rate.
You may be able to get a repossession mortgage if you have a poor credit score and you want to take out a bridging loan. These are typically loans that are secured on the property you’re repossessing. That means the lender gets a legal right to repossess the home if you don’t keep up on payments. Because lenders see these as high-risk loans, you’ll usually have to pay a higher interest rate.
Guaranteed Repurchase Mortgages (preferential rate mortgage)
This is a bridging loan that requires you to pay it off at the end of the term. You will have to pay the loan off at a minimum rate of 5%.
Help to Buy Mortgage (HTB) Mortgages
HTB mortgages are specialised loans that help you to buy a home at a lower rate. These loans require you to pay a 3% fee, which is paid to the government. And they only last for 10 years. You can only get an HTB loan if you’re under the age of 40 and you have a minimum combined income of £100,000 (or £50,000 without a partner).
Secured Loan Mortgages
A secured loan is a type of bridge loan that you pledge as collateral on a property or asset. For example, you can pledge your car as collateral on a loan. That’s what makes these loans safer than a traditional bridging loan. That said, you’ll have to put down a larger deposit and pay higher interest rates.