Bridging Loan Calculator
Calculate the true cost of UK bridging finance. Compare serviced vs retained interest and see the total finance cost.
Typical: 0.5% - 1.5% per month
Typical: 1% - 2%
Typical: 1%
What is a Bridging Loan?
A bridging loan is a short-term financing solution used to "bridge" the gap between purchasing a property and arranging longer-term finance or selling an existing property. In the UK, these loans are typically used for:
- Auction purchases — where exchange within 28 days is mandatory
- BRRRR projects — financing renovation before refinance
- Chain breaks — when your sale is delayed but your purchase is ready
- Quick turn opportunities — time-sensitive property deals
Typical UK Bridging Loan Rates
UK bridging loans typically charge 0.5% to 1.5% per month (6% to 18% APR). Rates depend on:
- Loan-to-value (LTV) — lower LTV = better rates
- Property type — residential vs commercial
- Exit strategy — sale vs refinance
- Credit history and experience
Serviced vs Retained Interest
Serviced interest means you pay interest monthly from your own funds. This keeps your loan amount intact but requires cash flow.
Retained interest means the interest is deducted from the loan amount upfront. You receive less cash but have no monthly payments.
Important: Bridging loans are high-cost financing. Always have a clear exit strategy. Failure to repay can result in property possession.
Hidden Costs to Watch
- Arrangement fee — typically 1-2% of loan amount
- Exit fee — charged when loan is repaid, often 1%
- Valuation fee — £300-£1,000+ depending on property
- Legal fees — £500-£1,500 for the bridging loan
- Broker fees — some brokers charge 1-2%
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Try Free ReportNot financial advice. Always verify details with a qualified mortgage broker or financial adviser.