Auction Bridge Calculator
Calculate bridging finance for auction purchases with 28-day completion. Model cash requirements, finance costs, and expected returns.
Auction Purchase Details
Enter your winning bid and property values
Critical: 28-Day Deadline
If you fail to complete within 28 days, you forfeit your deposit of 10% and may face additional penalties.
Related Bridging Calculators
About the Auction Bridge Calculator
What it does and how it helps you
The Auction Bridge Calculator helps UK property investors model fast-track bridging finance for auction purchases. When you win at auction, you typically have just 28 days to complete - this calculator shows exactly how much cash you need, the true cost of finance, and whether the deal generates sufficient profit.
How It Works
Understanding the calculation method
Understanding Auction Bridging Finance
When you win a property at auction, you enter a legally binding contract. The hammer falling means you must complete within the stated deadline - typically 28 days from auction date. Miss this deadline and you forfeit your 10% deposit plus potentially face additional penalties.
Auction bridging finance is specifically designed for this high-pressure scenario. Specialist lenders understand auction timescales and have processes optimised for speed rather than the leisurely 6-8 week completion typical of standard mortgages.
How This Calculator Works
Our Auction Bridge Calculator models the complete financial picture:
1. Auction Purchase Analysis Enter your winning bid (hammer price), auction fees (buyer's premium, typically 2%), the current market value (for lending purposes), and the deposit you've already paid. The calculator shows your total purchase cost including fees.
2. Exit Strategy Planning Define how you'll repay the bridge: sell the property for quick profit, refinance onto a BTL mortgage, or hold while generating rental income. Enter your planned refurbishment budget, expected exit value, and holding period.
3. Bridging Terms Modelling Configure realistic bridge parameters: LTV (typically 70-80% for auction), monthly interest rate, arrangement fee, exit fee, and retained interest months. The calculator shows your net day one advance after all deductions.
4. Cash Requirements The critical output - exactly how much cash you need to complete the purchase and fund any works. This accounts for your deposit already paid, the net bridge advance you'll receive, and refurbishment costs.
5. Profitability Analysis See expected profit, profit on cost percentage, and return on cash invested. The calculator rates the deal from excellent to weak based on returns and leverage.
The 28-Day Auction Timeline
Understanding the typical auction completion timeline is crucial:
Day 0 - Auction Day: - Pay 10% deposit (non-refundable) - Receive memorandum of sale - Contract becomes legally binding
Days 1-3 - Application: - Submit bridging application with valuation and legal pack - Provide proof of funds for balance - Lender issues DIP (Decision in Principle)
Days 3-7 - Valuation: - Lender instructs panel valuer - Valuation completed (often within 48 hours for auction) - Valuation report submitted to lender
Days 7-14 - Legal Due Diligence: - Lender's solicitors review title - Legal pack analysed (you should have done this before bidding) - Any enquiries raised and answered
Days 14-21 - Offer: - Formal facility offer issued - Accept offer and pay arrangement fee - Final conditions satisfied
Days 21-28 - Completion: - Funds transferred to solicitor - Complete purchase - Keys released
Auction Bridging Costs Explained
Understanding all the costs helps you bid accurately:
Interest Rate: Auction bridges typically 0.75-1.25% per month depending on LTV and property type. Interest is usually retained (deducted upfront) for an agreed period.
Arrangement Fee: Typically 1.5-2.5% of the loan amount, deducted from the advance. Some lenders offer lower rates with higher arrangement fees.
Exit Fee: 0-1.5% payable when you repay. Many lenders charge exit fees; factor this into your exit calculation.
Retained Interest: Months of interest deducted upfront. This reduces your net advance but means no monthly payments.
Valuation Fee: £500-£1,500+ depending on property value and type. Auction-speed valuations may cost more.
Legal Fees: Budget £2,000-£4,000 for lender's solicitors plus your own solicitor costs.
Critical Success Factors
For successful auction bridge financing:
1. Arrange Finance Before Bidding Get a DIP from a bridging lender before the auction. Know your maximum bid based on the finance available.
2. Review Legal Pack Thoroughly The legal pack is available before auction. Have your solicitor review it - problems discovered after winning are your problems.
3. Have Cash Ready Even with 75% LTV bridge, you need the 10% deposit plus balance. Ensure funds are liquid and accessible.
4. Build in Buffer Things go wrong. Budget for worse interest rates, higher fees, and longer holding periods than your base case.
5. Know Your Exit Lenders want to see a clear, credible exit. "I'll refinance onto a mortgage" needs evidence of BTL lender appetite and rental income.
When to use this calculator
Use this calculator when planning to bid at property auction or after winning at auction. Essential for understanding your exact cash requirements, ensuring you can complete within 28 days, and validating that the deal generates sufficient profit after all bridging costs. Run multiple scenarios with different bid levels to find your maximum profitable bid.
Frequently Asked Questions
Common questions about this calculator