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Bridging Loans on Foreign Property

8th April 2021

By Ben Walker

Bridging Loans on Foreign Property

In some cases, bridging loans on foreign property can be the answer for property professionals and business owners who need short term money fast, but are fully geared on their UK assets.

The concept of bridging on foreign property is the same as bridging in the UK. So, interest can be serviced or retained and the benefits of bridging are similar.

Because the security is in another country, the costs and risks are different for lenders. Therefore this is reflected in the pricing structure.

Consequently, the rates are not as competitive as in the UK and the setup charges can be higher.

But, if that’s what it takes to close a profitable deal, bridging loans on foreign property might be exactly what some people need.

Of course, that’s assuming they own property without a mortgage in the relevant countries.

What could be available for you

Here is an indication of what might be available and possible costs at the time of publishing – please contact us for up to date costs. 

  • Countries currently available Spain, France, Ireland, Portugal, Republic of Ireland, Jersey, Guernsey, Gibraltar and selected Greece / Cyprus.
  • The loan to value is lower than the UK, circa 50% LTV.
  • Residential property and commercial property will be considered.  
  • Land with planning is carefully considered but on a lower LTV.
  • The maximum loan is around £3m sterling.
  • Rates vary by country and range from 0.8% to 1.5% per month
  • Loans are normally from 3-12 months.
  • In most cases, clients must be UK based and own a property in the UK.  An equitable charge is placed on the UK property as a comfort charge – available equity in this property is less of a consideration.
  • Legal fees can be more expensive as the client is paying for UK and country of security solicitors.
  • The speed to offer and completion can be fairly fast but everything varies because of jurisdiction. Theoretically, everything can be done in as little as two weeks if solicitors are efficient. 1 month is more typical.

These products are well funded so worth bearing in mind should the need arise.

IMPORTANT – because Promise offers products from the residential, commercial, development and second charge market we can also suggest alternative strategies which may be cheaper or preferrable. 

Please get in touch to discuss your circumstances and requirements.

Talk to a Promise Money adviser for more details

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