Over the last year or so, we have seen numerous new bridging lenders enter the market. This can only be good news for borrowers with more competition amongst lenders. The increasing competition in the market is driving a continued downward trend in rates, and this is reflected in cases that we’ve dealt with recently.
Residential rates are now available from around 0.4% per month, equating to c. 5% per annum.
Meanwhile, commercial rates have seen even bigger falls. For the last ten years, most commercial bridging lenders have been charging 1% upwards, often 1.25% per month for commercial bridging. However, with several new aggressive lenders in the market, we now see rates starting from around 0.675% per month for low LTVs.
By way of an example, our client was looking to purchase a Semi Commercial property on the high street of a popular market town. The property had a guide price of £450k and our client was looking to borrow £280k (62% LTV), with interest serviced monthly rather than accrued.
There were a number of lenders quoting rates well below 1% per month and terms on this deal were offered at a very reasonable 0.725% per month, and with no exit fees.
If you have a bridging enquiry you would like to discuss, please don’t hesitate to contact one of the Key Team today