Bridging Loan


Looking for short term finance to purchase a property?
Use our UK bridging loan calculator to get an indicative quote.
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How To Use A Bridging Loan Calculator

The fields above make certain assumptions. The good news is that you can change the rate of interest in line with the loan to value you require using the rates mentioned above to give you a more accurate indicative quote. 


Please note that if you enter a 12 month term for the loan the overall cost will assume that you pay interest over the full term. It is often the case that bridge loans are paid off before the full term - as mentioned above you only pay interest for the time you use the loan.


The minimum loan term is one month. After the initial 30 days you will only pay interest up to the day you pay the loan back.


A bridging loan is secured finance and the cost of it will depend on a number of factors.  

These factors include: 

Loan to value - this is the ratio of total borrowing to total property value. The lower the LTV generally the lower the rate of interest you will pay on the loan. If more than one property is involved securing a bridging loan over two properties may allow you to reduce the loan to value and therefore the overall cost of the loan. 


Property location - This is a factor, particularly for properties in more remote areas of the UK. This is particularly true of north Scotland and Northern Ireland when it comes to residential property purchase. The more remote the property the more risk there is to a lender that you may not be able to provide an exit for the bridging finance so this may be reflected in the interest rate you pay.


Regulated or unregulated? - If the property is for personal use then it will fall under regulated lending governed by the FCA (Financial Conduct Authority). There are fewer regulated lenders in the market so in certain situations your options may be more limited. Regulated lending is highly competitive so the good news for borrowers for loan to values below 60% the rates currently are as low as they ever have been.


Lender fees - Bridging loan lenders will typically charge a facility arrangement fee of 2% which is based on either the net or gross loan. For most of the lenders we use the lender fee will be based on the net loan. Lenders may also charge a loan drawdown fee - typically £295. This fee can vary depending on the number of properties involved. When your loan is redeemed there will also be a redemption fee. This is the cost of removing a legal charge from your property (ies) and will be typically £120.


Legal costs - A bridging loan transaction like a mortgage requires solicitors to complete the legal charge paperwork. The lender will have their own solicitor who will have their fees and you will also be required to have a solicitor to represent you. Legal fees can vary, and will depend on the complexity of the transaction.Some bridging lenders provide dual representation which can reduce the overall cost.


Survey fees - As with any loan secured lending on an asset the lender will generally want an independent valuation. Most UK bridging loan lenders will appoint a surveyor from an agreed panel. The cost will depend on the lender but most work to a scale based on property value. For some lenders we work with provide what is called a desktop valuation (typically for properties valued under £1 million) which are not only quicker but are cheaper as well.


Broker fees - We charge a broker fee typically of £995 for arranging finance on your behalf. 


Loan exit fees - The lenders we use rarely apply an exit fee. If they are charged it will be payable on the redemption of the loan and can be anything from 1% to 2%. Our calculator has this field set at 0% as this type of fee if it is included typically applies to higher risk lending on investment land/property transactions.


How is Bridging Loan Interest Calculated?

Interest depending on the bridging finance provider can be calculated in different ways. 


We work with lenders where you have the option of rolling up the interest on the loan so there is no requirement to service the loan. 


This can be very attractive for cash flow. In this situation interest is added to the loan balance every month. 


When you pay off the short term loan the redemption repayment will comprise of the original capital and the accrued monthly interest.


Reducing the cost of the bridge finance

If you are buying a property before selling an existing one it may be possible to reduce the cost of finance by using more than one security property. By securing the bridge over multiple properties the overall loan cost may be reduced. If you have an outstanding mortgage on a property you are using as security this will be factored into the overall loan to value calculation.

Why use Clifton Private Finance?

We are independent company registered in England and we are regulated by the Financial Conduct Authority. We have access to the best loan rates in the market for both authorised and regulated lenders as well as private lenders for unregulated transactions where speed is often of the essence.


We know the short term finance market very well and we can find the right finance for your situation. If you need a longer term finance to replace bridging finance we can arrange that for you. Our calculator is a useful tool to get an indicative quote but we recommend talking to us about what you are trying to achieve to get a bespoke quote for your requirements. 

IMPORTANT INFORMATION: This bridging finance calculator is intended to provide you with an approximate guide only to illustrate what a bridging loan would cost. 

For a personalised quotation please call our bridging team on 0117 959 5094  


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