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Are there different types of bridging loans?

Yes, bridging loans come in a few varieties to cater to various needs. This includes:

  • Open Bridge Loans – These loans don’t have a pre-set repayment date, but they typically require full repayment within a year. They are ideal for situations with uncertain timelines, such as property development projects.
  • Closed Bridge Loans – Unlike open bridges, closed bridges have a fixed repayment date agreed upon upfront. This is suitable for scenarios with a clear exit strategy, like bridging the gap between selling your existing property and buying a new one.
  • Fixed vs. Variable Rate – Bridging loans can have either fixed or variable interest rates. Fixed rates offer predictability in monthly repayments, while variable rates can fluctuate based on market conditions.

It’s worth considering that choosing the right type of bridging loan depends on your specific circumstances and exit strategy.