We provide commercial mortgages to the people of Northern Ireland.
Unlike a bridging loan which is usually for borrowing of less than 18 months (and in most cases 12 months), a commercial mortgage is taken over a much longer period of time, in some cases up to 30 years.
Quite often, a number of different lending products are used to make a deal or project work.
For example, a developer could borrow money against a piece of land with a short term bridging loan. They could then utilise property development finance to build on that same piece of land and finally, when the project is finished, they could apply for a long term commercial mortgage to repay the existing bridging loans and development finance.
As you can see, commercial mortgages are longer term options and usually come attached with a much cheaper interest rate. The reason for this is that all of the ‘risk’ in the deal has been taken out by the bridging and development loans.
By the time a bank comes along with their cheap, long term commercial mortgage, the project has been purchased, developed and finished.
Commercial mortgage rates and fees in Northern Ireland
Whilst a bridging loan can be as much as 1.5% a month and in some cases, much higher than that, a commercial mortgage can start from as little as 3.5% a year.
Even on slightly riskier projects where traditional bank funding won’t come into play, there are a number of alternative finance providers who will lend in Northern Ireland with rates from 7.5% a year.
It is important that a distinction is made between bridging loans and commercial mortgages because the rates and interest charged differ massively as you will see below.
The other thing to note with commercial lending is that the fees charged by the lenders tend to be a lot less than they would with a bridging loan. We know of one instance where a borrower in Belfast was charged an arrangement fee of 6% and another example where a borrower in Lurgan was charged an exit fee of 3% of the GDV – not the loan!
If you have a project that you would like funded, why not apply today?