Bridging Loan Calculator United Kingdom

A bridging loan is short-term secured borrowing that covers a gap in funding, most often when you need to complete a purchase before another property has sold, or when you buy at auction and must pay quickly. Because these loans run for months rather than years, lenders quote a monthly interest rate instead of the annual APR on a mortgage. This calculator turns that monthly rate into the total interest over the term, the fees and the single sum you repay when the loan is redeemed.

How bridging loan interest works

Apply the monthly rate to the loan for each month of the term. A £150,000 loan at 0.85% a month builds up £1,275 of interest each month, so over twelve months the interest is £15,300. The calculator uses this simple whole-term basis, the rate on the full loan for every month, which matches how retained-interest facilities are priced and is the usual way bridging is quoted, so it is easy to compare lenders.

A rate of 0.85% a month is about 10% over a year, far higher than a normal mortgage. Bridging is expensive because it is fast and short term, so the aim is nearly always to exit as soon as the deal allows rather than run the loan for its full permitted term.

Retained, rolled-up and serviced interest

With retained interest, the whole term’s interest is calculated up front and kept back from the advance, so you borrow the loan plus its interest and make no monthly payments. With rolled-up interest, the charge is added to the balance each month and settled at the end. With serviced interest, you pay the interest monthly, like an interest-only mortgage, and repay only the capital at the end. The calculator’s whole-term total is closest to a retained or rolled-up structure; if you service the interest, the total cost is broadly the same but paid in instalments.

The fees you pay

The arrangement fee, sometimes called the facility fee, is usually the biggest extra cost. It is typically 1% to 2% of the loan and charged at drawdown; on a £150,000 loan, a 2% fee is £3,000. Some lenders also charge an exit fee on repayment, as a percentage of the loan. Many bridging products have no exit fee, so the default here is zero. Enter the percentages from your quote in the advanced options to see what they add.

Valuation, legal and broker fees are not included. They vary a lot by lender and deal, so the total repayable is what you owe the lender for the facility, not the full cost of arranging the loan.

A worked example

You take a £150,000 bridge at 0.85% a month for 12 months with a 2% arrangement fee and no exit fee. The interest is £150,000 × 0.85% × 12 = £15,300. The arrangement fee is £150,000 × 2% = £3,000. The total repayable on the exit date is £150,000 + £15,300 + £3,000 = £168,300. If the sale completes in month eight, you would usually pay interest only for the months used, though many lenders set a minimum interest period. A realistic exit date is the biggest factor in the true cost.

Assumptions and limitations

This is a planning estimate. It applies the monthly rate to the full loan for the whole term on a simple-interest basis without compounding, so a compounded rolled-up facility will cost slightly more. It assumes the loan is drawn in full on day one and repaid at the end of the term, and it excludes valuation, legal, broker and redemption administration fees and any early repayment charges. The rate, term and fees are your lender’s figures, so confirm the exact terms and the all-in cost with the lender or a regulated broker before committing.

About This Bridging Loan Calculator

Use this bridging loan calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.