Advanced options
Simple (non-compounded) retained interest shown by default; rolled-up interest compounds monthly and costs slightly more. Expect valuation, legal and possible exit fees on top. Bridging is secured on property: it must have a credible exit (sale or refinance) before it starts, not after. Not financial advice.
What The Bridging Loan Calculator Works Out
- Interest: loan x monthly rate x months, the simple sum a retained-interest facility deducts at the start. Bridging quotes by the month because it lives by the month: rates run around 0.55% to 1.2% monthly, 7% to 14% a year, priced like a service rather than a mortgage because completions take days to weeks.
- Total cost of borrowing: interest plus the arrangement fee (usually 1% to 2%) and, in advanced mode, every other fee. GBP 200,000 for nine months at 0.9% with a 2% fee costs about GBP 20,200, a tenth of the loan, and the sub-line turns that into a rough annualised rate.
- Total to repay: the loan plus the whole cost, the sum the exit (sale or refinance) has to produce.
- Interest structure (advanced): retained interest is deducted up front; rolled-up interest compounds monthly and costs a little more; serviced interest is paid monthly and needs provable income. Most borrowers choose retained or rolled-up because bridging situations rarely come with spare monthly cash flow.
- Other fees (advanced): a valuation fee (often GBP 300 to GBP 1,500 depending on the property), legal fees for both your solicitor and the lender's (GBP 1,000 to GBP 3,000 combined is common) and any exit fee, typically 0% to 1% of the loan. All are added to the total cost and the annualised rate.
- Loan to value (advanced): the loan as a percentage of the property value, plus the gross LTV once retained interest and the fee are added to the facility. Most lenders cap gross LTV at 70% to 75%, lower on commercial or unusual property.
- Net advance (advanced): the cash you actually receive after retained interest and fees are deducted from the facility, which is the figure to check against what the purchase or chain needs.
- Cost if repaid early (advanced): the interest for a shorter actual term, assuming the lender refunds unused retained interest (most do, though many have a minimum term of one to three months). The classic failure runs the other way: an exit that slips rolls into extension fees, default rates and, at the end of that road, repossession.
- Regulation and use cases: regulated bridging on your own home carries FCA protections and a usual 12-month cap; unregulated lending on investment property runs longer and looser. Breaking a chain, 28-day auction deadlines and buying unmortgageable property to renovate all share the same shape of a short, certain gap; anything longer or vaguer is usually a cheaper problem for a different product.