Bridging loan calculator
Estimate what a bridging loan could cost, how much would actually be released on completion, and what you would repay at the end.
How this calculator works
Bridging interest is normally quoted as a monthly rate. With retained interest, the lender holds back the interest for the whole term at the start, so less cash is released but nothing is paid monthly. With rolled-up interest, interest is added to the balance each month and paid with the loan at the end; the calculator compounds it monthly, as many lenders do. With serviced interest, you pay the interest every month and the gross loan is released in full, less fees.
The arrangement fee is shown as deducted on completion. If a lender adds it to the loan instead, the net release is higher but so is the balance. Valuation, legal and broker fees are not included.
What lenders will look at
Lenders look first at the security and the exit: how the bridge will be repaid, whether by sale, refinance onto a commercial mortgage or another source. Our guide to bridging loan exit strategies explains what makes an exit credible. If retained interest runs out because the exit is delayed, the loan does not stop costing money, so leave a margin in the term.
The rate you are offered depends on the property, the loan to value, your experience and the strength of the exit. For heavier works, see refurbishment finance; for buying at auction, auction finance.
Find out more about business bridging loans, or tell us what you need and we will search the market for lenders suited to your case.
Questions about this calculator
How is bridging loan interest calculated?
Usually as a monthly rate on the amount borrowed. It can be retained (deducted upfront for the term), rolled up (added to the balance each month) or serviced (paid monthly). Rolled-up interest usually compounds, so it costs a little more than the same rate retained.
Why is the net loan less than the amount I borrow?
Because the arrangement fee, and retained interest if you choose it, are taken from the loan on completion. Check the net figure against what you need to complete the purchase, plus your other costs.
What happens if I repay the bridge early?
Many bridging loans charge interest only for the months the loan is open, sometimes with a minimum period, and unused retained interest may be refunded. Terms vary by lender, so ask before you commit.
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