Ask a bridging lender what their loan costs and you will get a monthly rate. That is maybe two thirds of the answer. The rest hides in an arrangement fee, an exit fee, two sets of legal bills, a valuation, and the way the interest is structured. Here is the full breakdown, with a worked example you can check against our bridging loan calculator.
Monthly rates in 2026: what you will typically pay
Bridging is priced per month, not per year, and in 2026 most deals sit somewhere between 0.75% and 1.5% a month. Multiply by twelve and that is roughly 9% to 18% a year, which is why nobody holds a bridge longer than they have to. Where you land inside that range comes down to four things:
- Loan to value. The biggest lever. A bridge at 50% LTV prices near the bottom of the range; push towards 70-75% and the rate climbs.
- The asset. A clean, lettable house in a liquid market is cheap money. An unmortgageable wreck, a mid-conversion HMO or a commercial unit prices higher, because the security is harder to sell if things go wrong.
- The strength of your exit. A refinance with a decision in principle in place, or a sale with realistic comparables, earns a better rate than "we will sort something out".
- First charge vs second charge. A second-charge bridge sits behind an existing mortgage and recovers second if the property is sold, so it typically costs noticeably more per month.
One structural point: bridging secured on an investment property you will never live in is normally an unregulated loan; the FCA's guidance on the exclusions for investment lending is in PERG 4.4. Unregulated means fewer consumer protections, so the facility letter deserves a proper read.
Every fee, itemised
The monthly rate gets the attention; the fees do a lot of the damage. Check any quote against this list.
- Arrangement fee. Typically around 2% of the gross loan, sometimes 1-1.5% on lower-leverage deals. Some lenders add it to the facility, others take it off the advance; either way it usually forms part of the gross loan you pay interest on.
- Exit fee. Charged by some lenders on redemption, often around 1% of the loan. Many charge none, which can make a slightly higher monthly rate cheaper overall. Always ask.
- Valuation fee. Paid upfront, typically a few hundred pounds to over a thousand depending on the property and whether a GDV figure is needed for refurb works.
- Lender's legal fees. In bridging you normally pay the lender's solicitor as well as your own.
- Your legal fees. Ideally a solicitor who does bridging regularly; slow legals are the most common reason a bridge misses an auction deadline.
- Broker fee. Often around 1%, or a fixed fee, on top of any lender commission. Usually worth it for whole-of-market access, but it belongs in your cost column.
- Drawdown and admin fees. Smaller fixed charges per drawdown or on completion. Individually trivial, collectively a few hundred pounds.
- Telegraphic transfer fee. A small charge, typically under £50, for sending the funds.
On a £200,000 bridge, the non-interest costs alone can plausibly run £7,000-£10,000 before a single month's interest is counted.
Rolled-up, retained or serviced: same rate, different deal
Bridging interest can be handled three ways, and the choice changes both your day-one cash and your redemption figure. Our calculator uses simple interest on the gross loan, which is how most bridging quotes are built.
- Rolled up. Interest is added to the balance and repaid at the end. Zero monthly outgoings, the default on refurb projects, but the biggest redemption figure of the three.
- Retained. The lender holds back the whole term's interest from the advance on day one. Your redemption figure is just the gross loan, but the cash you actually receive is much smaller.
- Serviced. You pay the interest monthly out of pocket. The largest advance and the cleanest redemption, but you need the cashflow to fund it every month.
A worked example
Take a £200,000 gross loan at 0.85% a month over 12 months, with a 2% arrangement fee and no exit fee.
- Monthly interest: £200,000 x 0.85% = £1,700
- Total interest over 12 months: £20,400
- Arrangement fee: £4,000
- Total cost of borrowing: £24,400
That £24,400 is the same in all three structures. What changes is when you pay it and what you receive:
| Rolled up | Retained | Serviced | |
|---|---|---|---|
| Net advance (day one) | £196,000 | £175,600 | £196,000 |
| Monthly payment | £0 | £0 | £1,700 |
| Total to repay at redemption | £220,400 | £200,000 | £200,000 |
Retained looks gentle at redemption until you notice you only ever received £175,600. Need £196,000 of actual cash on a retained basis? You have to borrow a larger gross loan, and the interest and fees are calculated on that bigger number. Run your own figures through the calculator before you sign anything.
How to compare quotes properly
Never compare bridging deals on the headline rate. Compare the total cost of credit over your actual term: every month of interest, plus the arrangement fee, exit fee, valuation, both sets of legals and the broker, added into one number.
The ranking genuinely flips. A 0.79% deal with a 2% arrangement fee and a 1% exit fee can cost more over six months than a 0.95% deal with a 1.5% fee and no exit fee. Short terms are dominated by fees; long terms are dominated by rate. Build the one-number comparison for your term, not the lender's example.
If the bridge is funding works rather than a straight purchase, the structure differs again; our guide to refurbishment bridging for BRRR covers staged drawdowns and LTGDV caps.
How long does a bridge take to arrange?
Faster than a mortgage, slower than the adverts. A genuinely urgent deal with a responsive lender, a clean title and proactive solicitors can complete in around a week to ten days; a more typical bridge takes two to four weeks from application to drawdown, with the valuation and legals setting the pace. Buying at auction on a 28-day deadline? Instruct solicitors and order the valuation the day your bid wins, not the week after.
The biggest hidden cost: a late exit
Every cost above is knowable on day one. The one that wrecks deals is running past your term because the refinance or the sale is late.
Go past redemption and two things typically happen. First, extension fees: lenders commonly charge around 1% of the loan to extend, on top of the continuing monthly interest. Second, default rates: overrun without an agreed extension and the monthly rate can step up sharply, in some cases roughly doubling.
On our £200,000 example, three extra months at the standard rate is another £5,100 of interest; add an extension fee and it is £7,000 or more, and materially worse at a default rate. The defence is boring: pick a term with headroom over your realistic exit date, remember that many buy-to-let lenders will not remortgage against a new valuation until you have owned the property for six months, and start the refinance early. Whatever the exit, pressure-test it with the BRRR calculator or the flip profit calculator before you take the bridge, not after.
A bridging loan is not expensive because the rate is high; it is expensive when it is compared badly, structured wrong or held too long. Price it over your real term and the bridge is just another line in the deal.
This is general information, not financial advice. Bridging rates, fees and criteria vary by lender and change over time; get quotes in writing and speak to a qualified broker or adviser before committing.
