Bridging Loan Calculator
Estimate the total cost of a bridging loan, interest plus fees, over the term.
Calculator
Bridging Loan Calculator
Estimate the total cost of a bridging loan, interest plus fees, over the term.
Monthly interest rate, typically around 0.55% to 1%.
Rolled-up interest often compounds month on month, so the real cost can run slightly higher than this simple estimate. Bridging is short-term business finance, and the interest may be an allowable finance cost, see our guide to bridging loan interest and tax. This is an estimate only, not a quote or an offer of finance.
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What a bridging loan actually costs
Bridging finance is priced monthly, not annually, because it is designed to be short-term, often covering a chain break, an auction purchase, or works before refinancing onto a standard mortgage. A rate that looks small, well under 1% a month, adds up quickly over a 12-month term.
The headline rate is only part of the cost. Most bridging loans also carry an arrangement fee, typically 1.5% to 2% of the loan, and sometimes an exit fee on top. Interest is frequently rolled up and added to the loan rather than paid monthly, which means it compounds, so the true cost can be a little higher than a simple multiplication of rate and term.
Because bridging is treated as short-term business finance rather than a personal mortgage, the interest cost is often relevant to how the eventual profit or rental income is taxed, so it is worth working out the tax position alongside the raw cost of the loan.
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FAQ
Frequently asked questions
It is priced for speed and short-term risk, not long-term affordability. Lenders can complete in days or weeks with less scrutiny of ongoing income, and the loan is expected to be repaid or refinanced within months, both of which push the rate up compared with a standard mortgage.
Yes. If interest is rolled up and added to the balance each month rather than paid off, you pay interest on interest, so the true cost runs a little above a simple rate times term calculation, especially over a longer bridging term.
Often yes, where the loan is for business or investment purposes, but the treatment depends on what the loan is for and how the property is held. See our guide to bridging loan interest and tax for the detail.