Bridging Loan Calculator — Calculate Monthly Interest and Costs — UK 2026
Calculate costs of a UK bridging loan for property transactions. See monthly interest total fees and compare with standard mortgage costs.
Bridging loans are short-term secured loans used to bridge the gap between buying a new property and selling an existing one. Typical terms are 1-18 months with monthly interest rates of 0.4-1.5% (equivalent to 5-18% annually). They are expensive compared to standard mortgages but provide fast access to funds often completing within 7-14 days versus 6-8 weeks for traditional mortgages.
How much does a bridging loan cost?
On a £300000 bridging loan at 0.75% monthly interest for 6 months: monthly interest = £2250. Total interest = £13500. Arrangement fee (2%) = £6000. Exit fee (1%) = £3000. Valuation and legal fees = £2000-£3000. Total cost approximately £24500-£25500. This makes bridging loans significantly more expensive than standard mortgages but speed and flexibility justify the cost for time-sensitive transactions.
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Bridging Loan Calculator
How This Calculator Works
This calculator uses the standard reducing balance method to compute your monthly payments. The formula takes your loan principal, annual interest rate, and tenure to calculate the exact Equated Monthly Installment (EMI) or payment amount. Each monthly payment consists of two components — principal repayment and interest charges. In the early months, a larger portion goes toward interest, but as your outstanding balance decreases, more of each payment reduces the principal. This is why making extra prepayments in the early years of your loan saves significantly more interest than prepaying later.
Tips to Get the Best Loan Deal
Always compare the Annual Percentage Rate (APR) rather than just the advertised interest rate, as APR includes processing fees, insurance charges, and other costs. Negotiate your processing fee — most banks will reduce or waive it if you ask. Choose the shortest tenure your budget allows since longer tenures dramatically increase total interest paid. Check prepayment terms before signing — RBI mandates zero prepayment penalty on floating rate home loans in India. Finally, maintain a credit score above 750 to qualify for the best rates from any lender.
Key Information
| Parameter | Details |
|---|---|
| Monthly Interest Rate | 0.4% - 1.5% |
| Arrangement Fee | 1% - 2% of loan amount |
| Exit Fee | 0% - 1% of loan amount |
| Typical LTV | Up to 75% |
Calculate bridging loan costs
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Use Calculator NowFrequently Asked Questions
How much does a bridging loan cost?
On a £300000 bridging loan at 0.75% monthly interest for 6 months: monthly interest = £2250. Total interest = £13500. Arrangement fee (2%) = £6000. Exit fee (1%) = £3000. Valuation and legal fees = £2000-£3000. Total cost approximately £24500-£25500. This makes bridging loans significantly more expensive than standard mortgages but speed and flexibility justify the cost for time-sensitive transactions.
When should I use a bridging loan?
Common scenarios: buying a new home before your current one sells (chain-breaking) purchasing at auction (28-day completion required) buying property needing renovation before a mortgage is possible and funding commercial property transactions. Do not use bridging loans for long-term borrowing — they are designed for 1-12 month periods. Always have a clear exit strategy before taking one.
Can I get a bridging loan with bad credit?
Yes some specialist lenders offer bridging loans with adverse credit because the loan is secured against property. However expect higher interest rates (1-1.5% monthly versus 0.4-0.7% for good credit) and lower LTV (60% versus 75%). The key factor is the exit strategy and property security rather than credit score alone. Use a specialist broker to find suitable lenders.
What is a fixed vs variable rate mortgage?
A fixed rate locks your interest rate for 2-5 years, giving payment certainty. A variable (tracker) rate moves with the Bank of England base rate and can be lower initially but carries risk of increases. Most UK buyers choose a 2 or 5 year fix then remortgage when the fixed period ends.
How much deposit do I need for a UK mortgage?
The minimum deposit is typically 5-10% of the property value. A 10% deposit opens more competitive rates, and 25% or more gets the best deals. First-time buyers may access government schemes like Shared Ownership with smaller deposits. The bigger your deposit, the lower your LTV ratio and monthly payments.
What are the stamp duty rates for 2025-26?
Post-April 2025 SDLT rates: 0% on first £125,000, 2% on £125,001-£250,000, 5% on £250,001-£925,000, 10% on £925,001-£1,500,000, and 12% above £1.5 million. First-time buyers pay 0% up to £300,000 and 5% on the portion between £300,001-£500,000 (relief lost above £500,000).
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Last updated: March 2026