Calculator
Illustrative example figures. The default values are examples only, not quotes or market rates. Replace them with figures from a lender.
Schedule
Assumptions and definitions
- Interest is simple (not compounded) at the monthly rate on the gross loan for the full term. Some lenders compound rolled-up interest, which costs more.
- Retained interest: interest for the whole term (monthly rate × gross loan × months) is deducted from the advance on day one, so you receive the net advance (loan − arrangement fee − retained interest) and repay the gross loan plus exit fee at the end. Some lenders work out retained interest differently or refund unused interest on early repayment; neither is modelled.
- Net advance = loan − arrangement fee (− retained interest, if chosen). The effective annual rate uses the net advance as the money received.
- The arrangement fee is paid upfront; the exit fee is paid with the loan at the end. Valuation, legal and broker fees are excluded.
- Early repayment, minimum interest periods and default rates are not modelled.
- Effective annual rate is an APR-like measure: the internal rate of return (IRR) of the cash flows (money received after upfront fees, then every payment and fee), compounded to a yearly figure as (1 + monthly IRR)12 − 1. It is not a lender's quoted APR and excludes costs not entered here.
- Results are rounded estimates for illustration and are not an offer of credit.
Start with the exit
A bridge is easy to get into and expensive to stay in. Before anything else, a lender will ask how you will repay it: by selling the property, or by refinancing onto a commercial mortgage once the building is let, refurbished or has planning. If the exit is still uncertain, a bridge is not the right product yet.
Typical uses are buying at auction, where completion is due within a fixed period; buying a new unit before the old one sells; or funding a refurbishment that a mainstream lender will not touch until it is finished. It is not long-term borrowing.
How lenders size and price it
Loans are sized on the property’s value today, and sometimes on its value after the works, with part of the loan held back and released as work is done. Trading history matters less than for a bank loan; the lender looks at the security, the exit and your track record with similar projects.
Rolled up, retained or serviced
| Method | What you pay monthly | What it means |
|---|---|---|
| Rolled up | Nothing | Interest is added to the loan and repaid at exit. Easiest on cash flow, largest final bill. |
| Retained | Nothing | Interest for the term is deducted upfront, so you receive less on day one. |
| Serviced | The interest | You pay monthly from income, so the amount owed at exit stays at the loan plus fees. |
Switch between them in the calculator: the total cost and effective rate move more than most people expect.
See UK lenders offering bridging finance →
Security and conditions
Expect a first legal charge over the property, or a second charge behind an existing mortgage with that lender’s consent, and often personal guarantees from the directors. There are fewer financial covenants than on a term loan, but the conditions are strict: the term, the exit, the scope of any works and what happens if the loan overruns.
Getting to completion
- Terms based on the property, the loan size and your proposed exit.
- A valuation by a panel valuer, paid for by you. On a refurbishment the valuer may give a value today and a value after the works.
- Legal work on title and the security documents. Bridging solicitors are used to working quickly, but a messy title still slows everything down.
- Drawdown, with any works money held back and released against progress.
Speed is why people use bridging, and a simple case can complete much faster than a mortgage. Delays almost always come from title, valuation or a missing document rather than the lender’s credit process. Lenders also look at your experience and credit history.
Costs people forget
- The arrangement fee, often a percentage of the loan and usually deducted from the advance.
- An exit fee on some loans, payable however early you repay.
- Valuation, both sets of legal fees and, if a broker is involved, the broker fee.
- Default interest if the loan runs past its term. Default interest can make a bridge far dearer than planned.
In its favour: it is fast, flexible about property condition, and rolled-up interest keeps cash free for the works. Against it: it is costly if the term runs on, fees weigh heavily on short terms, and the property is at risk if the exit fails.
Lenders and brokers
Specialist bridging lenders, some challenger banks and private lenders. Brokers arrange much of the bridging market; check any firm on the FCA Register. Business bridging is usually arranged for companies, but some loans to individuals can be FCA-regulated.
Frequently asked questions
What is a bridging loan?
Short-term finance secured on property, used to “bridge” until a sale or a longer-term refinance. Terms are counted in months, not years.
What is the difference between rolled-up, retained and serviced interest?
With serviced interest you pay the interest every month. With rolled-up interest nothing is paid monthly; the interest is added and repaid with the loan at the end. With retained interest the lender deducts the interest for the term from the loan upfront, so you receive less on day one but owe no monthly interest.
What is an exit strategy?
Your plan for repaying the loan at the end of the term, normally a sale or a refinance onto a commercial mortgage. Lenders test the exit as hard as they test the property.
Are bridging loans regulated?
Bridging secured on a property you or your family live in can be FCA-regulated. Business bridging on commercial or investment property generally is not. Check with an FCA-authorised adviser and use the FCA Register.
Why are bridging loans quoted monthly?
Because they are short-term, lenders quote a monthly rate. Multiplying by 12 gives a rough annual figure, but compare the total cost, the fees and the effective annual rate shown in the calculator.
Sources and further reading
- British Business Bank: debt finance options
- British Business Bank: business guidance
- FCA Financial Services Register
- FCA: consumer credit (when lending or broking is regulated)
- GOV.UK: Stamp Duty Land Tax
- GOV.UK: finance and support for your business
Links checked 17 Oct 2026. RaiseDebt does not state live market rates; check the source for current figures.