Bridging Loan Cost Calculator UK
Work out the real cost of a UK bridging loan — the monthly interest plus the stack of arrangement, exit, valuation, legal and broker fees that can add more than half again on top of the headline rate.
A bridging loan is short-term, secured finance — typically 1 to 18 months — used to “bridge” a gap, most often when you need to buy before you’ve sold. The headline rate looks small because it’s quoted per month, not per year: 0.85% a month sounds cheap, but that’s roughly 10% a year, and bridging rarely lasts a full year by design. The real catch is the fees. On a £200,000 bridge, the interest might be around £15,800 over nine months — but add the arrangement fee, exit fee, valuation, legal costs and broker fee and the true cost climbs to roughly £26,000, about 66% more than the interest alone. This calculator works out both halves: the interest under each repayment method, and the full fee stack that turns a “0.85% loan” into a five-figure cost. To model the longer-term mortgage that repays the bridge, use the Mortgage Calculator; for property tax, the Stamp Duty Calculator.
Loan and property
Interest
Lender and broker fees
Other costs
Bridging loan cost
Estimated total cost of bridge
Calculating…
Calculating…
Total interest
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Net advance estimate
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Total repayment
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Monthly serviced payment
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Gross LTV
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Annualised interest
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Bridging loan cost — quick lookup
The left table shows the monthly interest by loan size and monthly rate — the figure that builds up every month the bridge runs. The right shows how rolled-up interest grows with the term on a £200,000 loan, which is why getting out fast matters so much. Neither table includes the fees; those come later, and they’re where the real cost hides.
| Loan | 0.60% | 0.85% | 1.10% | 1.50% |
|---|---|---|---|---|
| £100k | £600 | £850 | £1,100 | £1,500 |
| £200k | £1,200 | £1,700 | £2,200 | £3,000 |
| £300k | £1,800 | £2,550 | £3,300 | £4,500 |
| £500k | £3,000 | £4,250 | £5,500 | £7,500 |
| Term | Interest | Owed at end |
|---|---|---|
| 3 months | £5,143 | £205,143 |
| 6 months | £10,419 | £210,419 |
| 9 months | £15,831 | £215,831 |
| 12 months | £21,381 | £221,381 |
| 18 months | £32,914 | £232,914 |
Right table uses a £200,000 loan at 0.85% a month with interest rolled up (compounding). Every extra month adds more than the last, because interest accrues on the growing balance. Bridging punishes delay — the difference between a 6-month and a 12-month exit is over £10,000 in interest alone.
How bridging loan cost is calculated
Bridging finance is priced unlike a normal mortgage, and the first thing to understand is the rate. Bridging rates are quoted per month, not per year. A rate of 0.85% a month is not 0.85% a year — it’s roughly 10% a year. The monthly quote makes the loan look cheap; the annual reality is anything but. Because bridging is meant to be short, the lender expects to be repaid in months, and the pricing reflects the risk and speed of that.
The headline interest is simple to work out — but how you pay it varies, and that changes the number:
The three ways interest is charged
Lenders offer three structures, and they produce different totals and different amounts of cash in your hand:
- Serviced: you pay the interest monthly, like a normal loan, and repay the principal at the end. The interest is simple — rate times months — but you need the monthly cash flow to cover it.
- Rolled-up: the interest compounds onto the balance each month and you pay it all at the end. No monthly payments, but you owe more, because interest accrues on interest. This is the most common bridging structure.
- Retained: the lender deducts all the interest upfront from the advance. On a £200,000 loan over nine months, around £15,300 is held back, so you actually receive about £184,700. Convenient, but it reduces the cash you get.
On a £200,000 loan at 0.85% a month over nine months, serviced interest is £15,300, rolled-up is £15,831 (the compounding adds £531), and retained holds back £15,300 from the advance. The differences look small over nine months but grow with the term — and which structure suits you depends entirely on whether you have monthly cash flow and how much cash you need upfront.
Worked examples
Four scenarios showing how the structure, term, and — above all — the fees shape what a bridge really costs.
Scenario 1 · Breaking a chain
Buy before you’ve sold
Interest: £8,702 · Fees (arrangement, valuation, legal, broker): £7,800
Total cost: £16,502
The classic use: your buyer pulls out but you’ve found your next home, so a bridge lets you proceed and repay when the sale completes. The £8,702 interest is the headline — but the £7,800 of fees nearly matches it, almost doubling the cost. At over £16,000 for six months, a bridge is only worth it if losing the onward purchase would cost you more.
Scenario 2 · Auction purchase
Fast completion a mortgage can’t match
Interest: £15,831 · Fees: £10,400
Total cost: £26,231
Auctions demand completion in 28 days, far quicker than a mortgage. A bridge funds the purchase, then a standard mortgage repays it once arranged. The interest of £15,831 is significant, but the £10,400 fee stack adds 66% on top. Bridging buys speed — here it costs over £26,000 for it, so the property needs to be worth chasing at that price.
Scenario 3 · The term overrun
When the exit slips
Interest at 6mo: £10,419 · Interest at 12mo: £21,381
Overrun cost: +£10,962
This is the danger that turns a sensible bridge into an expensive one. If the sale or refinance that was meant to repay the loan slips from six months to twelve, the interest more than doubles — over £10,000 extra. Bridging interest compounds on a balance that only grows until you exit. A weak or uncertain exit plan is what makes bridging dangerous, not the rate itself.
Scenario 4 · Retained interest, small advance
Less cash than the loan suggests
Interest held back: £15,300 · arrangement fee 2%: £4,000
Cash you actually receive: ≈ £180,700
With retained interest, the lender deducts the whole interest bill upfront and the arrangement fee is often added too. So a “£200,000 loan” puts around £180,700 in your hands. If you need a specific net sum, you have to borrow more than that sum to cover the retained interest and fees — a step borrowers routinely forget, then find themselves short at completion.
The fee stack — headline rate vs true cost
This is where most bridging calculators stop and ours doesn’t. The monthly rate is what gets quoted; the fees are what get forgotten — and on a typical bridge they can add more than half again on top of the interest. Here’s the full stack on a £200,000 loan, in the order it lands on your bill:
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1
Arrangement fee — the big one
Usually 1.5% to 2% of the loan, charged for setting it up — often added to the loan rather than paid upfront. On £200,000 at 2%, that’s £4,000 before a penny of interest. The single largest fee on most bridges.
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2
Exit fee — sometimes 1% of the loan
Charged by some lenders when you repay, often 1% of the loan or 1% of the property value. Not every lender charges it, so it’s worth checking — but where it applies, that’s another £2,000 on £200,000.
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3
Valuation & legal fees
The lender needs the security valued, and there are legal costs on both sides — yours and the lender’s, which you usually pay. Together often around £2,000 to £2,500, depending on the property and complexity.
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4
Broker fee — for arranging it
Most bridging goes through a broker, who typically charges around 1% of the loan. On £200,000 that’s £2,000. Worth it for access to the right lender, but another line on the bill that the headline rate ignores.
£200k bridge, 9 months — interest vs true cost
The fees nearly equal the interest itself:
The same loan that looks like a £15,800 cost on the interest quote is really a £26,000 cost once the fees land — about 66% more. Nothing about the rate changed; the rate just never told the whole story. This is the single most important thing to grasp about bridging: the monthly rate is the part everyone quotes and the part that matters least to the total. Always price the full stack — arrangement, exit, valuation, legal and broker — before deciding a bridge is affordable. A “0.85% loan” is a £26,000 decision.
The exit is everything
What makes bridging work or fail isn’t the rate — it’s the exit, the way you’ll repay it. Every bridge needs a clear, realistic exit: a confirmed sale, an agreed mortgage offer, or guaranteed funds arriving by a fixed date. The interest compounds on a balance that only grows until that exit happens, so a weak or vague plan is what turns an expensive-but-sensible bridge into a genuine problem. Lenders will ask for the exit before they lend; you should be even more sure of it than they are. If you can’t say precisely how and when the loan gets repaid, you’re not ready to take one.
Two scenarios that change the cost
What if…
Your exit slipped by six months?
What if…
You serviced the interest instead of rolling it up?
Key bridging loan terms explained
Bridging has its own vocabulary, much of it about how interest is charged and how you’ll repay. The ten terms below cover what you’ll meet talking to a bridging lender or specialist broker about a short-term loan.
- Bridging loan
- Short-term secured finance, usually 1 to 18 months, used to bridge a funding gap — most often buying a property before selling another. Fast to arrange and priced per month, not per year.
- Monthly interest rate
- Bridging rates are quoted per month, typically 0.5% to 1.5%. A 0.85% monthly rate is roughly 10% a year — the monthly figure makes the loan look far cheaper than it is over time.
- Rolled-up interest
- Interest that compounds onto the balance each month and is paid in full at the end, with no monthly payments. The most common bridging structure — convenient, but you owe more because interest accrues on interest.
- Serviced interest
- Interest paid monthly, like a normal loan, with the principal repaid at the end. Avoids compounding, so the total is slightly lower, but you need the monthly cash flow to cover the payments.
- Retained interest
- Interest the lender deducts upfront from the advance, so you receive less than the loan amount. A £200,000 loan might put around £184,700 in your hands — borrow more if you need a specific net sum.
- Exit (repayment strategy)
- How you’ll repay the bridge — a property sale, a remortgage, or incoming funds by a set date. The single most important part of any bridge; lenders won’t lend without a credible one, and a weak exit is what makes bridging dangerous.
- Arrangement fee
- The lender’s setup fee, usually 1.5% to 2% of the loan, often added to the balance rather than paid upfront. The largest single fee on most bridges — £4,000 on a £200,000 loan at 2%.
- Exit fee
- A charge some lenders apply when you repay, often 1% of the loan or property value. Not universal, so worth checking — where it applies it’s another four-figure cost the headline rate ignores.
- Open vs closed bridge
- A closed bridge has a fixed repayment date and a confirmed exit (such as an exchanged sale); an open bridge has no fixed date and a less certain exit. Open bridges are riskier and usually cost more.
- Loan to value (LTV)
- The loan as a percentage of the property’s value. Bridging is usually capped around 70–75% LTV, sometimes lower, and a higher LTV often means a higher monthly rate to reflect the lender’s risk.
Five mistakes people make with bridging loans
Bridging is fast, flexible, and unforgiving of poor planning. These five errors, drawn from the recurring property-finance threads on r/HousingUK and r/UKPersonalFinance, are how a sensible bridge becomes an expensive one.
Reading the monthly rate as an annual one
A 0.85% rate sounds trivial until you realise it’s per month — roughly 10% a year. Borrowers anchor on the small monthly figure and underestimate the cost of a longer term. Always annualise the rate mentally, and remember the interest compounds if it’s rolled up. The headline number is designed to look cheap.
Cost: a “0.85% loan” that’s really 10%+ a year Fix: multiply the monthly rate by 12 to gut-checkPricing the interest but ignoring the fees
The interest is the part everyone quotes; the fees are where the real cost hides. Arrangement, exit, valuation, legal and broker fees can add 50–66% on top of the interest — over £10,000 on a £200,000 bridge. Price the whole stack before deciding a bridge is affordable, not just the rate.
Cost: £10,000+ of fees not budgeted Fix: total every fee, not just the interestRelying on a weak or vague exit
The exit is everything. A bridge repaid by a sale that hasn’t exchanged, or a remortgage not yet agreed, can overrun and double the interest. Interest compounds on a balance that only grows until you repay. Never take a bridge without a concrete, realistic exit and a backup plan if it slips.
Cost: interest doubling on a slipped exit Fix: secure a concrete exit plus a fallbackForgetting retained interest cuts the advance
With retained interest, the lender deducts the whole interest bill upfront, so a “£200,000 loan” might hand you around £184,700. Borrowers who need a specific net sum arrive at completion short. If you need £200,000 in hand, you must borrow enough to cover the retained interest and fees on top.
Cost: short at completion by tens of thousands Fix: gross up the loan for retained interest and feesUsing a bridge when a cheaper option exists
Bridging buys speed, and you pay heavily for it. If the timing isn’t genuinely tight — if a longer completion, a let-to-buy, or simply waiting would work — a bridge can be thousands more expensive than the alternative. Use bridging only when the speed it provides is worth the premium, not as a default.
Cost: paying for speed you didn’t need Fix: confirm no cheaper route fits the timingFrequently asked questions
How much does a bridging loan cost in the UK?
More than the rate suggests. Bridging rates are quoted per month, typically 0.5% to 1.5%, so a £200,000 loan at 0.85% costs about £1,700 a month in interest. Over nine months, rolled up, that’s around £15,800.
But the fees roughly match the interest: arrangement (1.5–2%), exit (sometimes 1%), valuation, legal and broker fees can add over £10,000 on a £200,000 bridge, taking the true cost to around £26,000. Always price the full stack, not just the rate.
Is a bridging loan rate monthly or annual?
Monthly. This is the most important thing to understand about bridging cost. A rate of 0.85% is per month, which is roughly 10% a year — not 0.85% a year.
The monthly quote makes the loan look cheap, which is exactly why borrowers underestimate it. To sanity-check any bridging rate, multiply the monthly figure by 12 for a rough annual equivalent, and remember it compounds if the interest is rolled up.
What is rolled-up, serviced, and retained interest?
Three ways to pay bridging interest. Rolled-up interest compounds onto the balance and you pay it all at the end — no monthly payments, but you owe more. Serviced interest you pay monthly, like a normal loan, which avoids compounding but needs cash flow.
Retained interest is deducted upfront from the advance, so you receive less than the loan amount. On a £200,000 nine-month loan, retained interest of about £15,300 means you’d get roughly £184,700. Which suits you depends on your cash flow and how much you need in hand.
What fees come with a bridging loan?
Several, and together they’re substantial. The big one is the arrangement fee, usually 1.5% to 2% of the loan. Some lenders also charge an exit fee, often 1% of the loan or property value. Then there’s the valuation, legal fees on both sides, and a broker fee of around 1%.
On a £200,000 bridge these can total over £10,000 — adding 50–66% on top of the interest. The fees are where bridging’s real cost hides, so budget every one before committing.
What is an exit, and why does it matter so much?
The exit is how you’ll repay the bridge — a property sale, an agreed remortgage, or funds arriving by a set date. It’s the single most important part of any bridge, because the interest compounds on a balance that only grows until you repay.
If the exit slips — a sale falls through, a mortgage isn’t ready — the interest can double and the loan becomes a serious problem. Lenders won’t lend without a credible exit, and you should be even more certain of it than they are. No clear exit means you’re not ready to borrow.
How long can a bridging loan last?
Usually 1 to 18 months, sometimes up to 24. Bridging is designed to be short-term — the pricing assumes you’ll repay quickly, and the cost climbs steeply the longer it runs because interest compounds on a growing balance.
The difference between a six-month and a twelve-month exit on a £200,000 loan is over £10,000 in interest alone. A bridge that drags on is an expensive bridge, so build in a realistic timeline and a buffer for delays.
What is the difference between an open and closed bridge?
A closed bridge has a fixed repayment date and a confirmed exit — for example, a property sale that’s already exchanged. A open bridge has no fixed date and a less certain exit, such as a property you intend to sell but haven’t yet listed.
Open bridges carry more risk for the lender, so they usually cost more and may be harder to get. A closed bridge with a watertight exit is always the safer and cheaper option where your circumstances allow it.
How much can I borrow on a bridging loan?
Typically up to 70–75% of the property’s value, sometimes less, and the loan is secured against property. A higher loan-to-value often means a higher monthly rate, because the lender is taking on more risk.
If you’re using retained interest, remember the lender deducts the interest upfront, so you must borrow enough to cover that and the fees if you need a specific net sum. A broker can help match your circumstances to a lender’s criteria. Speak to a regulated adviser before committing.
Related calculators
A bridge is a temporary step toward a longer-term position. These calculators handle the mortgage that repays it, the property tax, and the wider buying picture.
Methodology & sources
How the maths works
Monthly interest is the loan multiplied by the monthly rate. For rolled-up interest, the balance compounds each month — multiplied by one plus the monthly rate for each month of the term — and the interest is the final balance minus the loan. Serviced interest is the simple monthly figure times the number of months, paid as you go. Retained interest deducts the full interest bill from the advance, reducing the cash you receive. The total cost adds the chosen interest figure to the fee stack: arrangement, exit, valuation, legal, and broker fees.
These are illustrative calculations to show how bridging cost behaves. Real quotes vary by lender, loan-to-value, property type, and your circumstances, and rates and fees change. The aim is to reveal the full cost — interest plus fees — rather than the headline monthly rate alone.
Assumptions and conventions used
- Monthly interest: loan × monthly rate
- Rolled-up: balance compounds monthly; interest = final balance − loan
- Serviced: monthly interest × number of months
- Retained: full interest deducted from the advance upfront
- Arrangement fee: commonly 1.5–2% of the loan
- Exit fee: where charged, often 1% of loan or property value
- Other fees: valuation, legal (both sides), broker ~1%
- Rates and fees shown are illustrative, not live quotes