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Bridging finance in 2022

Bridging loans serve as an alternative to a mortgage where finance is needed for a shorter term than is typical for a mortgage, when the loan is repaid by a planned future transaction (usually the sale of the asset itself or another property). We are noticing an increase in demand for this type of finance. Loans generally need to be in excess of €500,000, up to 65% loan-to-value (LTV) and loan terms of 1-3 years. Depending on the profile of the client, rates can start as low as 0.7%pcm. The main benefit to the client is that no capital repayment is required during the term and interest can be paid either monthly, yearly or rolled up to maturity.

We had an enquiry this week from a client wanting to borrow €10 million (50% of the purchase price) for commercial purposes for the next 12-18 months. He had been offered 13% pa in principle via a private investor and has approached us to get a better interest rate. As a broker with specialist knowledge of this market, we have access to more potential lenders and are likely to achieve much more competitive conditions. It’s important to highlight that clients are not protected by mortgage regulation for this type of finance, you can find a little more about bridging finance by checking out our mortgage products.

Katherine Walkerdine Founding Partner / Business Developer BA (Hons),Cert PFS,Cert CII (MP)

Living in Spain since founding Mortgage Direct in 2006. Prior to that, she had her own practice in London for fifteen years advising high-net-worth clients on their investment and taxation planning. An array of UK and Spanish qualifications.

Mortgages taken out in currencies other than the currency in which you earn are considered Foreign Currency Mortgages. Changes in the exchange rate may therefore increase the equivalent value of your debt. Under the Mortgage Law 5/2019 banks in Spain have introduced mechanisms to protect consumers from exchange-rate risk. For more information, please speak to your broker.

Mortgage Direct, S.L. is a company registered in the Registro de Intermediarios de Crédito Inmobiliario del BdE with the nº D108.

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