Bridging loan cost calculator
What short-term bridging finance really costs, fees and all.
Ballpark only — specialist advice is essential. Bridging rates, fees and structures (retained vs rolled-up interest) vary widely; lenders typically cap at ~70–75% LTV and charge default rates if you overrun. Speak to a whole-of-market bridging broker before committing.
Bridging is short-term secured lending priced by the month, not the year — typically 0.8–1.2% per month in 2025/26, which is 10–15% annualised. It exists for situations a mortgage cannot serve: completing an auction purchase in 28 days, buying before selling, or funding a property too unmortgageable to lend on until works are done. Used briefly and exited cleanly, it is a legitimate tool; used without a firm exit, it is how equity evaporates.
The full cost is interest plus fees. A worked example: borrow £200,000 for six months at 1% per month — £12,000 of interest — plus a 2% arrangement fee (£4,000), valuation and legal costs (often £1,500–£3,000, including the lender’s legals which you pay), and sometimes an exit fee of around 1%. Total: roughly £18,000–£20,000, or close to 10% of the loan, for half a year. Interest is often “rolled up” (added to the balance rather than paid monthly), which helps cash flow but compounds the cost.
Lenders care about two things: security (loan-to-value usually capped around 70–75% of the property) and the exit — the concrete event that repays them, meaning a sale under way or a refinance you demonstrably qualify for. Price your own deal the same way: if the exit slips three months, the example above grows by £6,000+. Bridging quotes vary widely, and the cheapest headline rate is frequently not the cheapest total — compare on the all-in figure the calculator produces. Illustration, not advice.
Common questions
How much does a bridging loan cost per month?
Typically 0.8–1.2% of the loan per month depending on loan-to-value, the property and your exit — so £1,600–£2,400 a month on £200,000. Add the one-off costs (arrangement fee around 2%, valuation, both sides’ legal fees, sometimes a 1% exit fee) to get the real total.
What is an “exit” on a bridging loan?
The event that repays it: completing the sale of your existing property, refinancing onto a mortgage once works are done, or another realisable source. Lenders price and approve around the exit’s credibility — and so should you. Bridging without a firm exit is the expensive way to discover how fast 1% a month compounds.
When does bridging actually make sense?
Short, defined gaps where the prize exceeds the cost: a 28-day auction completion, securing a chain-free purchase before your sale completes, or buying an unmortgageable property to renovate and refinance. Six months of bridging at ~10% of the loan only pays if the alternative — losing the property or the discount — costs more.
Can I get bridging if I still have a mortgage?
Yes — bridging is commonly secured as a second charge behind an existing mortgage, or across both properties, provided combined borrowing stays inside the lender’s LTV limit (usually 70–75%). Regulated bridging (secured on your own home) has extra consumer protections and a 12-month maximum term.
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