Bridging loan calculator

How to use the bridging loan calculator

Enter the value of the property you are borrowing against, the amount you actually need in your hand at completion (the net loan), the monthly interest rate, the term and the arrangement fee. Then choose how the interest is handled. The calculator works backwards to show the gross loan you would need, the interest over the term, and the amount due when you repay.

Bridging rates are normally quoted per month rather than per year, so a small difference in the monthly rate adds up quickly over a 12-month term. Every figure here is an illustration based on the numbers you enter. It is not a quote or an offer, and real terms depend on the property, the valuation, your plans and the lender.

Retained, rolled-up or serviced interest: what is the difference?

Retained interest

The lender works out the interest for an agreed period at the start and holds it back from the loan. You make no monthly interest payments during that period, but you receive less cash on day one, so the gross loan has to be larger to leave you with the net amount you need. If you repay early, ask the lender how any unused retained interest is treated.

Rolled-up interest

Interest is added to the balance each month and repaid in one go at the end. Nothing is paid monthly, which helps when your cash is going into works, but because interest is charged on interest the amount you owe grows every month. If the sale or refinance takes longer than planned, the balance keeps climbing, so your exit has to cover it.

Serviced interest

You pay the interest every month, just like an interest-only mortgage. The balance stays the same, so the amount due at the end is close to the gross loan, but you need the income or cash flow to meet the payments throughout the term.

What the calculator does not include

• Valuation and legal fees. You normally pay for the lender’s valuation and both sets of solicitors. These vary with the property and the deal.
• Exit fees and minimum interest periods. Some lenders charge an exit fee or a minimum number of months’ interest even if you repay early.
• Broker fees. We tell you about any fees before you commit to anything.
• Your exit. The most important number is not on this page: how the loan will be repaid. Lenders want a realistic sale or refinance plan and a fallback. Our guide to bridging loan exit strategies explains what they look for.

When a bridging loan makes sense

Bridging is short-term property finance. Our clients in Fareham, Portsmouth, Southampton and across Hampshire use it to complete at auction within the deadline, to buy a property that is not yet mortgageable because it needs work, to stop a chain collapsing, or to release capital quickly while longer-term finance is arranged. If you are bidding at auction, read our auction property finance checklist first, and if the property needs work see our guide to light and heavy refurbishment finance.

If the loan would be secured on a home that you or a close family member live in, or will live in, it may be a regulated mortgage and different rules and protections apply. We will explain at the outset how your case is handled.