How bridging loan costs are worked out
Bridging lenders quote a monthly interest rate and usually take an arrangement fee of 1% to 2%. How the interest is paid changes the gross loan you need to borrow.
Retained, rolled up or serviced
- Retained: the full term's interest is deducted from the advance on day one, so the gross loan is larger than the cash you receive
- Rolled up: interest compounds monthly and is repaid with the loan at exit
- Serviced: you pay the interest each month, so the gross loan stays close to the net amount
What this calculator does not include
Valuation, legal and broker fees, exit fees and any default interest are not included. Ask for a full cost breakdown before you commit.
Frequently asked questions
What LTV can I get on a bridging loan?
Typically up to 70% to 75% of the property's value, including retained or rolled-up interest.
Is retained interest refunded if I repay early?
Many lenders refund unused retained interest, subject to a minimum interest period. Check the terms.
What is a typical bridging rate?
Rates vary with LTV, property type and exit. Lower LTV and a clear exit usually mean a lower monthly rate.