Bridging Loan Calculator UK
A £200,000 bridging loan at a typical 0.75% monthly interest rate over 12 months costs approximately £18,000 in interest plus indicative fees of around £5,000 to £8,000. Total cost is often in the £23,000 to £26,000 range. Bridging loans are fast but expensive, so always ensure you have a clear exit strategy before proceeding.
Figures verified against HMRC SDLT rates on .
Written by James HartleyCIMA
Calculator
Loan Type
Total Cost of Bridging Loan
£26,300
Over 12 months · £72.00/day
Monthly Interest
£1,500
per month
Total Interest
£18,000
over 12 months
Total Fees
£8,300
arrangement + other
Effective Monthly Rate
1.096%
including all fees
Cost Breakdown
Interest
£18,000
Arrangement
£4,000
Exit Fee
£2,000
Valuation + Legal
£2,300
Bridging loans are designed for 1 to 18 months. The compound interest means costs escalate quickly. Have a clear exit strategy (sale or refinance) before committing.
Bridging rates vary significantly between lenders (0.4 to 1.5% per month). A specialist broker can typically access better rates than going direct.
These insights are generated based on your inputs and general UK financial guidelines. They do not constitute personal financial advice. Always consult a CIMA-qualified accountant or FCA-regulated adviser before making financial decisions.
Cost at Different Terms
| Term | Total Interest | Total Cost | Daily Cost |
|---|---|---|---|
| 6 months | £9,000 | £17,300 | £94.72/day |
| 12 months← You | £18,000 | £26,300 | £72.00/day |
| 18 months | £27,000 | £35,300 | £64.43/day |
| 24 months | £36,000 | £44,300 | £60.64/day |
Note: Bridging finance typically costs 8 to 18% per year in total, making it one of the most expensive forms of secured borrowing. It should only be used when the opportunity clearly outweighs the cost or as a very short-term solution.
New to bridging finance?
Read our bridging loans UK guide for how open and closed bridges work, how interest is charged, typical indicative costs, and exit strategies before you run the numbers below.
Stay updated
Get UK Finance Tips Weekly
Tax changes, HMRC rate updates, and money-saving guides. No spam - unsubscribe any time.
How Bridging Loan Calculator UK Works
For a full overview of how bridging finance works, see our bridging loans UK guide. This is general information, not financial advice. Rates and fees vary by lender and are indicative only.
Monthly Interest Calculation
Bridging loan interest is charged monthly on the outstanding balance. The calculation is straightforward: Monthly interest = Loan amount × monthly rate %. On a £200,000 loan at 0.75%/month, that is £1,500 per month. Unlike a repayment mortgage, the principal is not reduced - you repay the full loan amount at the end of the term. Interest is typically "rolled up" (added to the loan) or "retained" (deducted from the gross advance) to avoid monthly cash outflows.
Total Fees Explained
The arrangement fee (1 to 2%) is charged upfront or added to the loan. The exit fee (0 to 1%) is charged when you repay. Valuation and legal fees are paid regardless of whether the loan proceeds. The calculator shows the true total cost by combining all these elements.
Effective Monthly Rate
The effective monthly rate (including fees) is higher than the headline rate. A 0.75%/month loan with 2% arrangement and 1% exit fees over 12 months has an effective rate of approximately 1.0%/month once fees are amortised. Always compare bridging loans on their total cost, not just the headline rate.
Term Comparison Table
The table shows total cost at 6, 12, 18, and 24 months. Note that fixed fees (arrangement, valuation, legal) are the same regardless of term - so shorter bridges have a higher effective rate but lower absolute interest. This makes bridging most suitable for short terms of 3 to 9 months.
Frequently Asked Questions
A bridging loan is a short-term secured loan used to bridge a gap between buying a new property and selling an existing one, or between buying a property and securing long-term finance such as a mortgage. They are secured against property and typically run for one to twenty-four months. Bridging loans can be arranged quickly but are usually expensive compared with a standard mortgage.
Indicative monthly rates often fall in a broad range that varies by lender, loan to value, property type, and whether the bridge is open or closed. Treat any rate you see as a quote to be confirmed, not a market standard. On top of the monthly rate, arrangement fees, valuation, legal costs, and sometimes exit fees apply.
A closed bridging loan has a fixed repayment date - for example, when a property sale completes on a known date. Because the exit is certain, lenders charge lower rates. An open bridging loan has no fixed repayment date - you repay when funds become available. Open bridges carry higher rates and tighter eligibility criteria because the repayment is less certain. Most lenders set a maximum term of 12 months for open bridges.
Common uses include: breaking a property chain (buying before selling); auction purchases (completion required within 28 days); property refurbishment before refinancing; uninhabitable properties that high-street lenders won't mortgage; commercial-to-residential conversions; and development finance. Bridging should only be used when the benefit (speed, opportunity) clearly outweighs the cost, and when you have a clear, credible exit strategy.
Lenders will insist on a viable exit strategy before approving a bridging loan. Common exits include: sale of the property being purchased; sale of another property; refinancing onto a standard buy-to-let or residential mortgage once refurbishment is complete; remortgaging; receiving a large lump sum (inheritance, equity release on another property). If your exit strategy fails, you could be forced into a distressed sale - always have a backup exit plan.
Related Calculators
View allBuy-to-Let Mortgage Calculator
Calculate BTL mortgage costs, rental yield, and monthly profit.
LTV Calculator
Calculate your loan-to-value ratio and which mortgage rate band you qualify for.
Mortgage Overpayment Calculator
See how overpayments reduce your mortgage balance and total interest.
Property Calculators
All UK property and mortgage calculators in one place.
Related Guides
Bridging Loans UK: How They Work in 2026
Open and closed bridges, how monthly interest is charged, gross versus net loans, typical costs, and exit strategies.
Read guideRemortgage Guide UK 2026
When refinancing is a credible exit from a bridge, and costs to watch.
Read guideLTV Explained
Why your loan to value ratio affects the rates you can access.
Read guideBridging Finance Guide
A complete guide to UK bridging loans - how they work, how to negotiate fees, exit strategies, and a lender comparison checklist.
Was this calculator helpful?
Official Rates Used
This calculator uses official HMRC rates for 2026/27. View the current rates at GOV.UK:
Rates last verified:
Disclaimer: This calculator provides estimates based on standard HMRC rates for 2026/27. Results may vary based on individual circumstances. This is not financial advice. Always consult a qualified accountant or CIMA-qualified financial adviser for personal tax matters.