Estimate UK Bridging Loan Costs in Seconds
Borrow £350,000 at 0.72% a month and the interest comes to about £2,520 every month. Keep the bridge for nine months and you have paid £22,680 in interest alone. The arrangement fee, exit fee, valuation and legal bills all come on top.
Our calculator puts all of those costs side by side using typical UK pricing. It will not replace a lender’s offer, but it will give you a sensible working number before you speak to a broker.
Current pricing by LTV band and property type is covered on our bridging loan rates UK page.
Bridging Loan Calculator
Start with the property value and the amount you want to borrow. Add the monthly rate and how long you expect to keep the loan, then pick how the interest is handled. The results show the interest, each of the main fees, what the whole facility costs, how much actually lands in your account on completion and the balance due when you repay. The calculator also compares your loan-to-value with the ceiling most lenders set for that kind of property.
Everything here is an estimate built on typical UK bridging terms, not an offer of finance. Rolled-up interest is worked out on a simple basis unless you choose otherwise. If your lender charges interest on interest each month, pick the compounded setting instead.
Get a formal quote
Happy with the figures? Open the form below and your results are added to the message box for you. Add your details and anything else we should know, send it, and a specialist will come back with lender options and a formal quote.
Example Bridging Loan Costs
Here are three typical deals with every cost broken out. In all three, the interest is rolled up and charged on the original loan only.
Scenario 1: £250,000 Residential Investment Bridge
An investor buys a tenanted house at auction, does some light refurbishment and moves onto a buy-to-let mortgage at month 6.
- Loan: £250,000 at 65% LTV
- Term: 6 months
- Monthly rate: 0.72%
- Interest (rolled-up): £10,800
- Arrangement fee (2%): £5,000
- Exit fee (1%): £2,500
- Legal and valuation: £2,000
- Total estimated cost: £20,300, or 8.1% of the loan
Scenario 2: £500,000 Mixed-Use Refurbishment
A shop with flats above needs converting. The plan is to sell at month 9 when the works are done.
- Loan: £500,000 at 70% LTV
- Term: 9 months
- Monthly rate: 0.85%
- Interest (rolled-up): £38,250
- Arrangement fee (2%): £10,000
- Exit fee (1%): £5,000
- Legal and valuation: £3,500
- Total estimated cost: £56,750, or 11.4% of the loan
Scenario 3: £750,000 Commercial Property Bridge
An empty commercial unit is bought with a tenant lined up but not yet trading from it. A commercial mortgage takes over at month 12.
- Loan: £750,000 at 60% LTV
- Term: 12 months
- Monthly rate: 0.95%
- Interest (rolled-up): £85,500
- Arrangement fee (2%): £15,000
- Exit fee (1%): £7,500
- Legal and valuation: £5,000
- Total estimated cost: £113,000, or 15.1% of the loan
Notice that the cost goes from 8.1% of the loan to 15.1%. People often assume bigger loans are dearer, but size has little to do with it here. The third bridge is held for a year instead of six months and at a higher rate, so interest takes a much larger slice. Halve the term on any of these and you roughly halve the interest. The fees barely move.
Had the lender on Scenario 3 compounded its interest monthly, the interest bill would have been £90,112 and the overall cost £117,612. That is worth asking about before you sign.
There is more on what pushes bridging prices up or down on our bridging loan rates UK page.
What Lenders Will Actually Lend
What a calculator says and what an underwriter approves can differ. Underwriters look at the security, the exit and the shape of the deal, and treat the headline LTV as a starting point. Here is roughly where the market sits today.
Residential and buy-to-let property
On houses and flats you can usually borrow up to 75% LTV. A strong applicant with a clean exit may get 80%, and first-charge bridges attract the keenest terms. Second-charge bridging exists too, with a lower LTV cap and a higher rate.
Semi-commercial and mixed-use
Think 65% to 70%. Lenders weigh up how much of the building is residential and how much is commercial, and if the commercial part is empty the figure drops.
Commercial property
Most lenders stop at 60% to 65% on fully commercial security. Empty units, unusual use classes and short leases will all bring that down.
Land and development
Land with no planning is treated cautiously and often gets 50% or less. Once detailed consent is in place, the picture changes a great deal.
Common deal structures
We see four main kinds of bridge:
- Purchase bridge: buying quickly, often at auction, then refinancing or selling.
- Refurbishment bridge: funding light or heavy works against today’s value, sometimes in stages.
- Refinance bridge: clearing an existing loan or releasing equity while longer-term finance is put together.
- Chain-break bridge: completing on a new property before your own sale has gone through.
How a deal is put together affects the LTV, the rate and how many lenders will look at it. We use mainstream, specialist and private lenders, so most cases have somewhere to go. Our guide to how much you can borrow on a bridging loan goes through the sizing rules for each type of deal.
How to Increase Your Borrowing
If the loan you need is more than lenders will offer, hunting for a looser lender rarely works. You get further by making the deal itself stronger. In our experience, three changes make the most difference.
Bring down the LTV
Lower LTV means less exposure for the lender, so more of them will bid for the case. Putting in more cash, or offering extra security, can bring a better rate and a larger advance at the same time. Sitting just above a lender’s limit? Trimming the loan by a few thousand pounds can open up noticeably better terms.
Strengthen your exit
Lenders spend more time on the exit than on almost anything else, because it is the only way they get paid back. An agreed sale with a named buyer, or a refinance with an agreement in principle already issued, counts for a lot. “We will probably sell or remortgage” counts for very little. On a borderline case, solid evidence of the exit is frequently the reason we get it approved.
Show relevant experience
Underwriters like borrowers with a track record. Finished refurbishments, earlier bridges that redeemed on time and a portfolio you have managed yourself all help your case. A first bridge can still be funded. What worries lenders is a first-time borrower who also has a high LTV or a thin exit.
Improving two of these at once usually works better than pushing hard on one. A firmer exit and a slightly smaller loan can turn a marginal application into an easy approval, and we make sure lenders see those strengths in the first submission.
Common Reasons Deals Fail
When a bridge falls apart, the cause was nearly always there on day one. It just stayed hidden until something went wrong. These are the weak spots we see most often.
A missing exit strategy
Nothing kills more bridges. If the sale falls through or the refinance gets turned down, there is no way to repay the loan and the borrower is in a difficult spot. Good lenders will not lend against a vague exit, and the ones that will charge heavily for it. Have the exit confirmed before the money is drawn.
An overstated property value
A lot of deals wobble when the lender’s valuer comes back lower than the borrower hoped. If the loan was sized on the higher figure, it now breaks the LTV limit. Either the advance is cut or the lender walks away. Use a realistic value from the outset and you will not be hunting for extra deposit in the last week.
A refinance exit that was never going to work
Some borrowers plan to move onto a term mortgage without checking whether they would actually be accepted. The building might not suit mainstream lenders, the rent might be too low, or the borrower’s own circumstances might rule them out. Check the follow-on mortgage is achievable before the bridge completes, not after.
Underestimating the timeline
Builders run late. Buyers pull out. Solicitors take longer than promised. If the term has no margin, an extension fee or default interest will eat into whatever profit the deal was meant to make. Add a few months of breathing room.
Going direct to the wrong lender
Send a case to a lender whose criteria it does not fit and you lose weeks, often ending in a decline that sits on your record. Picking the right lender first time is a big part of a broker’s job. We cover the most common causes of decline in why bridging loans get declined, and the criteria lenders apply in our bridging loan requirements UK.
What Affects Bridging Loan Rates
A high street lender publishes its rates. Bridging lenders mostly do not. Each lender prices the specific risk in front of it, so two people asking the same lender on the same day may get very different quotes. The main things that shift the price are below.
Loan-to-value
Nothing affects the price as much. At 50% LTV a lender is well protected; at 75% it is not, and you pay for that difference. The closer the loan gets to the lender’s maximum, the bigger the margin, which is why cutting the LTV is usually the quickest way to a better rate.
Property type
Houses and flats get the best pricing. Mixed-use buildings, commercial premises, land and anything unusual cost more to borrow against, mainly because they take longer to value and longer to sell if the lender ever needs to repossess.
Charge position
With a first charge, the lender is repaid before anyone else when the property is sold. A second charge puts it behind your existing mortgage, so in a bad outcome it gets back less. Expect a higher rate to cover that.
The strength of your exit
An agreed sale or a refinance with an agreement in principle tells the lender it will be repaid on schedule, and lenders tend to reward that with a lower rate. A thin or untested exit pushes the price the other way.
Term and timing
The longer the loan runs, the more can go wrong, and monthly rates creep up slightly to reflect that. Urgency costs money too. If a lender has to complete in a few days with little time for checks, the quote is usually higher than for a deal with weeks to spare.
Borrower profile and experience
An experienced borrower with clean credit is cheaper to lend to than someone on their first project. Adverse credit, complicated income or an unusual ownership structure will all add a little to the rate.
Market conditions
Bridging lenders borrow money themselves, so their pricing follows funding costs. When base rate goes up, bridging pricing usually follows, though this specialist part of the market does not track mainstream mortgages exactly.
Lenders look at all of this in the round. A low LTV, a confirmed exit, an experienced borrower and an ordinary house will get you the cheapest rate going. Swap all four for their opposites and expect a quote near the top of the range. Our job is to put your case in front of the lenders most likely to price it well.
Bridging Loan Fees
The monthly rate gets the attention, but fees can matter just as much, and on a short facility they can add several percent to what you pay. Here is the usual list.
Arrangement fee
This is the lender’s set-up charge, normally between 1% and 2% of the amount borrowed. Lenders usually take it out of the advance on completion, so you receive less than the loan amount. A 2% fee on £500,000 means £10,000 never reaches your account.
Exit fee
Some lenders have one and some do not. Where it applies, it is usually 1% of the loan and is paid on redemption. It is easy to miss when you first compare offers. Get it confirmed in writing and include it in your numbers.
Interest
Most bridges roll the interest up, meaning you make no monthly payments and settle everything when the loan is repaid. Lenders do not all work it out the same way. Some charge a flat monthly amount based on the original loan. Others add each month’s interest to what you owe, so every month after the first costs a little more and a twelve-month bridge ends up noticeably dearer. A third approach is retained interest, where the lender keeps back the whole interest bill from the advance on day one. Paying monthly is also possible with a few lenders.
Valuation fee
You pay for the lender’s own surveyor. A simple residential valuation usually costs between £500 and £1,500, and commercial or complex properties cost more. Some lenders want a desktop report as well as a site visit.
Legal fees
As well as your own solicitor, you normally pay the lender’s. Between the two, budget £1,500 to £3,000 for a typical bridge. Deals with several parties, or with the same firm acting for both sides, can cost more.
Broker fee
Brokers sometimes charge a fee when the loan completes. CFN tells you what ours is at the outset, so there is nothing unexpected on completion day.
Administration and drawdown fees
If the money is released in tranches for building work, expect a charge from certain lenders every time a tranche is drawn. Find out before you commit and allow for it.
Modelling the full cost
To compare offers properly, total every fee and all the interest over the term, then divide by the loan. The percentage you get is the fairest single measure of cost. A lender with a low monthly rate but heavy arrangement and exit fees can easily end up costing more than a slightly higher rate with no exit fee. We work this out for each lender we approach so you can see which offer is genuinely cheapest.
Frequently Asked Questions
What is the maximum amount I can borrow with a bridging loan?
On residential property, most lenders go up to 75% or 80% of the value, with lower limits for commercial buildings and land. Good security and a proven exit give you more choice. Ask for the top of the range with a weak exit and very few lenders will say yes.
What is the maximum loan term available on a bridging loan?
Anything from 1 to 18 months is normal, and certain lenders will go to 24 months if the deal justifies it. Move the term up and down in the calculator and watch what happens to the total.
How is interest on a bridging loan calculated?
Bridging rates are quoted monthly, which is why the cost climbs quickly. A £400,000 loan at 0.85% a month for six months runs up £20,400 of interest on a simple basis. If the lender compounds it, the bill is higher.
Can I use a bridging loan to purchase a home at auction?
Yes. Auction buying is one of the main reasons people use bridging finance. Completion is normally due 28 days after the hammer falls, and an ordinary mortgage is rarely ready that quickly.
What are the costs involved with a bridging loan?
Besides interest, expect an arrangement fee, legal costs, a valuation fee and often an exit fee. Judge offers on what the whole facility costs you, not on the headline monthly rate.
How do I pay back bridging finance?
Through the exit you agreed with the lender at the start. For most borrowers that means selling a property or moving onto a longer-term mortgage, and the lender will want evidence of that before it releases any money.
What is an open bridging loan vs a closed bridging loan?
With a closed bridge, the repayment date is already fixed because the sale has exchanged or the refinance offer is signed. With an open bridge, it is not. Closed bridges are cheaper because there is less uncertainty. Open ones can still be arranged, at a higher price and with a convincing plan behind them.
Can I get a bridging loan with bad credit?
Often, yes. Bridging lenders care most about the property and the exit, so a CCJ or a late payment is not an automatic no. Some specialist lenders deal with adverse credit all the time while others avoid it completely, and picking the right one first saves time and protects your record.
Speak to a Commercial Bridging Specialist
No two bridges are the same. Your rate, the structure and which lenders will take the case depend on the property, your exit, your timescale and what you are trying to do. The calculator gives you a starting point. A call with one of our specialists gives you a real answer.
CFN is a whole-of-market FCA authorised broker. As a specialist commercial finance broker, we work with mainstream, specialist and private bridging lenders for clients across the UK and internationally, on everything from simple residential bridges to complex commercial and development facilities. There are no hidden charges and no obligation to proceed.
Call us on +44 1494 622 111 or email info@cfnuk.com to speak to a specialist directly.
Commercial Finance Network is authorised and regulated by the Financial Conduct Authority. Your property may be repossessed if you do not keep up repayments on a loan secured against it.
Related Pages
- Commercial Mortgage vs Bridging Finance – which structure fits the deal depending on timing, cost and property condition
- Commercial Mortgage Rates UK – current rate ranges by LTV band, property type and borrower profile
- What Is a Bridging Loan and When Should You Use One? – the basics of short-term property finance and the situations it suits best
- Development Finance – funding for ground-up builds and conversions when a bridge is not the right fit
- Development Exit Loans – refinancing a completed scheme while units sell or let
