UK bridging typically 0.5–1.2% per month.
Most bridging loans are 3–18 months.
Typically 2% of the loan.
What is a bridging loan?
A bridging loan is short-term finance, often used to buy a property before another sale completes, or to fund a purchase that a standard mortgage will not cover yet. Lenders quote a monthly interest rate, commonly about 0.5% to 1.2%, plus an arrangement fee of around 2% of the loan.
Interest can be paid each month, added to the debt and paid at the end, or kept back from the amount you receive. You need a clear way to repay, usually a sale or a remortgage onto a longer-term mortgage. This calculator turns the monthly rate, term and fee you enter into a total cost. It is not a bridging offer.
A £250,000 UK bridging loan at 0.85%/month over 12 months costs roughly £30,500 in total (interest + arrangement fee).
How bridging works
Interest modes
- Serviced: pay monthly — needs income
- Rolled up: compounds, repaid at end — no monthly outgo
- Retained: pre-paid from loan, you receive less net
When bridging makes sense
- Chain break — buy before your sale completes
- Auction purchases (28-day completion)
- Refurbish-to-sell projects
- Quick-turnaround commercial deals
Frequently asked questions
What is a bridging loan?
A short-term secured loan used to fill a gap — typically between buying a new property and selling an existing one, or until a longer-term mortgage is in place. Terms are 3–18 months; rates are monthly, not annual.
What does 'serviced' vs 'rolled up' mean?
Serviced: you pay interest monthly. Rolled up: interest compounds and is repaid in one lump at the end. Retained: interest for the term is deducted from the loan upfront — you receive a smaller net amount.
How much is a typical bridging rate?
UK bridging rates are 0.5–1.2% per month (6–15% annualised). First-charge regulated bridging is cheaper; second-charge or unregulated is more expensive. Arrangement fees are typically 2% of the loan.
What's a good exit strategy?
Lenders need a clear exit. Common exits: (1) remortgage onto a standard product, (2) sale of another property, (3) maturing investment. No viable exit = no lending.
Is bridging regulated?
Bridging on a property you intend to live in is FCA-regulated. Bridging on BTL/commercial is unregulated. Both are secured against property.
Reviewed by the Mortgage118 editorial team. Excludes legal, valuation and exit fees (~£1,500–3,000). Rolled-up model assumes monthly compounding. Provides an estimate only.
- Rates quoted
- Per month
- Typical term
- 3–18 months
- Max LTV
- 70–75%
- Exit fee
- Often none
- Legal + valuation
- ~£1,500–3,000