What the calculator is doing
Bridging interest is quoted monthly, not annually, and how it is charged changes the cost more than most people expect. There are three structures, and the calculator models all of them.
- Serviced — you pay the interest monthly, like a standard loan, and repay the principal at exit.
- Retained — interest for the whole term is deducted from the advance up front. Your monthly outgoings are nil, but you receive considerably less on day one.
- Rolled up — interest is added to the balance and settled in full at exit. It compounds monthly, so the total is higher than the same rate serviced.
Why the net advance is the number that matters
The arrangement fee, valuation and legal costs come out of the loan, and with retained interest the full term of interest does too. A £250,000 facility can put well under £230,000 in your account. If your purchase needs the full amount, that gap is the thing that breaks the deal, and it is the figure this calculator leads on.
Read more
These go into the detail the calculator summarises:
- How bridging loan costs really work — fees, rates and the mistakes people make with online calculators.
- How bridging loan interest is calculated — monthly rates, compounding, and the three interest structures.
- Bridging loans explained — what they are for, timescales, and how we arrange them.
Frequently asked questions
How is bridging loan interest calculated?
Bridging interest is quoted as a monthly rate rather than an annual one. It can be serviced (paid monthly), retained (deducted from the advance up front) or rolled up (added to the balance and settled at the end). Rolled-up interest compounds each month, so it costs more than the same rate paid monthly.
Why is the money I receive less than the loan amount?
The arrangement fee, valuation and legal costs come out of the advance, and with retained interest the whole term of interest is deducted up front too. On a £250,000 facility that gap can be well over £20,000, which is why the net advance matters more than the headline loan.
Are these figures a quote?
No. The calculator works from the numbers you enter, so it is an illustration only. It is not a quote, a rate we have offered, or a decision in principle. Actual terms depend on the property, your exit plan and the lender.