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.
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 2.5% 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 5.5% a year.
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?