Residential Bridging Loans

Residential Bridge Loans

Borrow from £100,000 to £25,000,000 over three years with a residential bridging loan from Rapid Bridging. 

Our residential bridge loans mean you can: 

• Purchase residential property to live in, renovate, develop or rent out. 
• Raise funds against residential property you already own.

Rapid Loans For Residential Properties 

At Rapid Bridging, we work with homeowners, homemovers, landlords, and property developers to find the funding you need. In urgent cases, we can get the money you need to you within as little as 48 hours. 

Our clients save on residential bridge loans as we very rarely charge broker fees and give you access to a whole pool of lenders, including specialists who do not deal directly with borrowers. 

Ready to arrange a residential bridging loan? Get in touch now.

Need more information about bridging loans for a residential property?

Whether this is your first time seeking this kind of finance or you’re an experienced home developer, it’s always worth reviewing all the information. 

With a residential bridging loan, you can borrow money over a period lasting from 30 days to 36 months. All loans taken out on primary residential property (property you live at) are regulated by the Financial Conduct Authority. The maximum legal loan term limit for a regulated bridging loan is 12 months.

Unlike with mortgages, you don’t make monthly payments towards the capital (the sum of money you borrowed originally) and the interest (the charge made by lenders for advancing you the cash you need). Instead, you repay the capital for residential bridge loans all in one go at the end.

If you want to make monthly interest payments on your a bridge loan, you can, but you don’t have to. You can choose to roll up the interest and pay it back with the capital at the end of the loan term. This costs slightly more than making interest payments but does allow you to repay through the sale of a property or your planned exit strategy.  

Or you can choose the retained interest option for your bridging loan. Like with rolled up interest, you repay the capital and interest at the end of the term but you can borrow against the interest if you need to. 

Interest is charged again on both the capital and rolled up interest on a retained loan making it the most expensive option. However, some borrowers appreciate having access to extra funds in case they need it – please speak with one of our advisors to see if this is the right option for you.

Residential Bridge Loans are suitable for:

• Bridging the gap between purchase and sale
• Light to heavy refurbishment. 
• Power of attorney loans
• Downsizing residential properties
• Asset purchase and/or refinance 
• Portfolio restructuring
• Land with planning permission & development costs
• Business funding
• Settling insolvency matters
• Stopping repossessions

A bridge loan for a residential property means that you can purchase a property to rent out or renovate and sell. Bridging loans also allow borrowers the freedom to purchase at auction and purchase properties with very short leases remaining. 

Our fast access to the cash you need affords our clients opportunities. The finance we can facilitate is often used to purchase residential development projects, such as converting a commercial building into flats or a single dwelling property into a HMO, or purchasing property, including retirement homes, overseas. 

Request A Residential Bridge Loan Quote Now.

Rapid Residential Bridging Finance Terms

• Applicants must be aged 21 or over 
• Finance available for poor credit applicants where your exit strategy does not rely on finding external refinancing (CCJs, defaults and arrears acceptable)
• First, second, and third charge bridging loans equitable and unilateral charges available
• Funding available to individuals, partnerships, limited companies, charities, special purpose vehicles, offshore companies and foreign nationals
• In principle decisions available immediately
• Loans from £125,000 to £15 million
• Maximum term 36 months (12 months for regulated loans)
• Minimum loan term 30 days
• No income proof required – except when the loan is to be repaid through refinancing
• Quotes provided with written terms
• Resident in the UK
• Secured on property and land you wish to purchase or already own

Security property for residential bridging loans

• Bungalows
• Flats
• HMOs
• Houses
• Maisonettes
• Property in all conditions (including a poor state of repair)
• New property but must be watertight

You can also offer commercial property as your security property on a bridging loan if your intention is to change its use to residential. All debt secured must be on property based in England, Wales, Northern Ireland, and Scotland.

Residential bridging loan interest rates

The interest rate we secure on loans for borrowers depends on both their credit rating, the value of the property/ies they offer as security, and the viability of their exit plan. 

Please find below examples of typical monthly interest rates we’re able to arrange for borrowers with the strongest proposals:

0.43 up to 50% LTV 

For clients choosing a rolled up or retained interest option, the gross loan balance on which you pay interest is higher than for clients making monthly repayments. This means that, over the course of the loan term, you’ll end up paying slightly more.

You can choose whether you want either a fixed rate or a variable rate on your loan. If you choose a variable interest rate, it may increase or decrease during the term of your loan depending on movements in the Bank of England’s base rate.

Most lenders prefer fixed bridging loan rates to variable rates because of the greater predictability of interest payments incurred by their borrowing.

All the costs associated with residential bridging loans

Arrangement fees

The lender will charge you an arrangement fee (sometimes called a facility fee) based on a percentage of the net or gross value of the loan amount.  The net loan balance is the amount of money you applied to borrow and the gross loan balance is the amount of money you borrowed plus arrangement fees and interest you’ve chosen to roll up or retain.

Please find below standard lenders’ facility fees charged based upon the size of loan taken out.

Lenders range from 1 – 2% per month. 

Valuation fees

You will need to meet the valuation fees incurred by your lender.

When you apply for residential bridge loans, most lenders will engage a surveyor who will then produce a report on the condition and value of the property you’re offering as security.

Admin fees

Similar to the one-off admin fees you pay when you take out a standard residential mortgage, bridging lenders for residential properties charge a similar fee (usually starting at around £295).

Legal fees

Your lender’s legal fees will be passed on to you, specifically the cost of drawing up the loan agreement and the cost of registering a charge on your property at the Land Registry.

Exit fees

Many lenders charge an exit fee of up to 1% of the net or gross loan balance when you repay your loan. No interest is charged on these types of exit fee. The number of lenders charging exit fees is dropping and, in most cases, we’re able to find a facility for a client where this charge is not applied.

Broker fees

Except in very complex cases, Rapid Bridging do not charge broker fees to our residential bridging clients.