The Bank of England’s Monetary Policy Committee said that it expects to raise the base interest rate soon and this could cause bridging loan rates to rise. The Bank of England base rate is expected to rise from 0.25% to 0.5%. There is fierce competition amongst bridging finance lenders and this has kept interest rates low. If the Bank of England raises interest rates, this could increase the cost of bridging loans, but probably not by a significant amount. Many borrowers try to find the cheapest interest rate, but customer service and the speed at which funds can be available can also affect the choice of bridging finance providers. Customer service could become more important than small differences in interest rate between bridging loan providers. However, there will still be lenders who compete by offering the lowest interest rates. If interest rates rise, because of the competition amongst lenders are expected to limit interest rate rises to a small percentage. Many bridging lenders are funded from banks and these will find that obtaining their funding will be more expensive. They will pass on this rate rise to borrowers. Lenders who are not externally funded may not be forced to increase their rates, but probably will. Brexit could affect interest rates but it will be some time before the full effect of Brexit on the UK economy is known. Bridging finance brokers can find loans from a wide range of bridging loan providers and can advise borrowers about the best bridging loan deals. Brexit could affect interest rates but it will be some time before the full effect of Brexit on the UK economy is known. Bridging finance brokers can find loans from a wide range of bridging loan providers and can advise borrowers about the best bridging loan deals.
May 10, 2022
