Bridging loan total cost calculator
A bridging loan quoted at 1% per month rarely costs 12% a year. Arrangement fees of around 2%, exit fees, valuation and legals, and the choice between retained, rolled and serviced interest can push the true cost of a 9-month bridge well past 15% of the cash you actually receive. This calculator shows gross vs net advance and the total cost over the days you really hold the loan, before you sign anything.
Illustrative only, not a quote or an offer of finance. Interest is pro-rated by day; many lenders charge whole months and apply a minimum interest period of 1 to 3 months. Retained deals vary on whether unused interest is refunded at early redemption. Actual pricing depends on lender underwriting, loan-to-value, asset and exit. FundBiz is a broker-matcher, not a lender. Typical UK commercial bridging rates of 0.55% to 1.5% per month: FundBiz panel observation, as of June 2026.
What this calculates
Bridging quotes hide their true cost in three places: the gap between gross and net (fees and retained interest come off the advance before you see it), the interest treatment (retained, rolled and serviced produce different bills for the same headline rate), and the difference between the agreed term and the days you actually hold the loan. This calculator surfaces all three and outputs the total cost in pounds, as a percentage of the cash you actually received, annualised so you can compare it against a term loan or asset finance.
The maths in plain English
Serviced: interest = gross loan x monthly rate x months held (pro-rated by day). You pay it monthly; the net advance is gross minus the arrangement fee.
Rolled up: interest compounds monthly on the growing balance: gross x ((1 + monthly rate) to the power of months held, minus 1). Paid in one lump at redemption.
Retained: the lender deducts interest for the FULL agreed term from the advance on day one, so net = gross minus fee minus (gross x rate x agreed term). This calculator assumes unused interest is refunded pro-rata at early redemption; if your lender does not refund, the interest line is the full retained amount regardless of when you redeem.
Fees: the arrangement fee is deducted from the advance, the exit fee is charged on the gross loan at redemption, and valuation plus legals are paid in cash. All fees are charged in full however short the hold, which is why a 3-month bridge can carry a higher annualised cost than a 12-month one.
Worked example: £500,000 gross, 1% per month, retained, redeemed at 9 months
- Gross loan: £500,000, agreed term 12 months
- Arrangement fee at 2%: £10,000 (deducted)
- Retained interest, 12 months at 1%: £60,000 (deducted)
- Net day-one advance: £430,000
- Redeemed at 270 days (about 8.9 months): interest charged £44,384, with £15,616 of unused retained interest refunded (if the lender refunds)
- Valuation and legals: £1,500
- Total cost: £55,884, which is 13.0% of the £430,000 you actually had, or about 17.6% annualised
The same facility on serviced interest nets £490,000 on day one and totals £55,884 in cost too, but the cost percentage falls to 11.4% of net because more cash reached you. Structure changes the economics even when the headline rate does not move.
| Interest treatment | Net day-one advance | Interest charged | Total fees | Total cost | Cost as % of net | Annualised |
|---|---|---|---|---|---|---|
| Retained (12 months, unused refunded) | £430,000 | £44,384 | £11,500 | £55,884 | 13.0% | 17.6% |
| Rolled up (compounding) | £490,000 | £46,172 | £11,500 | £57,672 | 11.8% | 15.9% |
| Serviced (paid monthly) | £490,000 | £44,384 | £11,500 | £55,884 | 11.4% | 15.4% |
Source: FundBiz bridging total cost calculator worked example
Interest pro-rated by day over 270 days (about 8.9 months). Retained assumes unused interest refunded at redemption; with no refund the retained total cost rises to £71,500. Many lenders charge whole months and minimum interest periods of 1 to 3 months, which raise the true figure.
View as plain-text Markdown
### Worked example: £500,000 gross bridge at 1% per month, 2% arrangement fee, £1,500 valuation and legals, redeemed at 270 days | Interest treatment | Net day-one advance | Interest charged | Total fees | Total cost | Cost as % of net | Annualised | | --- | --- | --- | --- | --- | --- | --- | | Retained (12 months, unused refunded) | £430,000 | £44,384 | £11,500 | £55,884 | 13.0% | 17.6% | | Rolled up (compounding) | £490,000 | £46,172 | £11,500 | £57,672 | 11.8% | 15.9% | | Serviced (paid monthly) | £490,000 | £44,384 | £11,500 | £55,884 | 11.4% | 15.4% | Source: FundBiz bridging total cost calculator worked example Interest pro-rated by day over 270 days (about 8.9 months). Retained assumes unused interest refunded at redemption; with no refund the retained total cost rises to £71,500. Many lenders charge whole months and minimum interest periods of 1 to 3 months, which raise the true figure.
“These figures are the floor, not the bill. Lenders that charge whole months turn day 32 into two months of interest, minimum interest periods of 1 to 3 months apply however fast you redeem, and a bridge that runs past term picks up default rates that are often double plus an extension fee. The single biggest variable is the retained-interest refund clause: on this example it is worth £15,616. Read that clause before you compare rates, because 0.1% per month is worth far less than the refund.”
Edge cases
No refund on retained interest. Some lenders keep the full retained amount at early redemption. On the worked example that adds £15,616 back onto the cost of a 9-month exit. Ask before you sign; the clause matters more than 0.1% on the rate.
Running past term. Default rates after the agreed term commonly double the monthly rate, and extension fees of 1% or more apply. If your exit (sale or refinance) has any timing risk, price the bridge at 3 months longer than you hope.
Fee on gross vs fee on net. A 2% fee on gross is more pounds than 2% on net. Most lenders charge on gross; this calculator does too.
Second charges and land. Rates at the top of the range (1.2% to 1.5% per month) with lower maximum LTVs. The structure maths is identical; the inputs are just worse.
FAQs
What is the difference between gross and net loan?
The gross loan is the headline facility the lender writes. The net loan (or net advance) is the cash that actually reaches your account on day one, after the arrangement fee and, on a retained deal, the full term of interest have been deducted. On a 12-month retained bridge at 1% per month with a 2% fee, a £500,000 gross loan nets to £430,000. Always compare quotes on net, not gross.
What is retained interest?
The lender calculates interest for the whole agreed term up front and holds it back from the advance. You make no monthly payments; the interest was pre-deducted. If you redeem early, many lenders refund the unused full months, but some do not. Check the refund clause before signing, it changes the true cost of an early exit materially.
What is rolled-up interest?
Interest is added to the loan balance each month and the whole lot is repaid at redemption. Nothing is deducted up front and nothing is paid monthly, but the interest compounds: each month you pay interest on the previous months’ interest. Over 12 months at 1% per month, rolled interest costs about 12.68% of the gross loan against 12% flat for serviced.
What is serviced interest?
You pay the interest monthly in cash, like an interest-only mortgage. It is the cheapest structure in total cost terms because nothing compounds and nothing is pre-deducted, but the lender must underwrite your ability to make the monthly payments, which slows the deal down and excludes borrowers whose cashflow is the reason they are bridging.
Why does the calculator ask for actual days held?
Because almost nobody holds a bridge for exactly the agreed term. Redeem a 12-month bridge at month 7 and the interest bill on a serviced or rolled deal is roughly seven twelfths of the headline. On a retained deal it depends entirely on the refund policy. Fees, by contrast, are charged in full however short the loan, so a short hold makes fees the dominant cost.
What is a minimum interest period?
Many bridging lenders charge a minimum of 1 to 3 months of interest even if you redeem in week two. Some also charge interest in whole months, so day 32 is billed as two months. This calculator pro-rates by day for clarity; treat its result as the floor and ask the lender how they actually count days.
What monthly rate should I expect?
UK commercial bridging in mid-2026 typically prices between 0.55% and 1.5% per month depending on loan-to-value, asset type, exit strength and borrower profile. First-charge residential-backed deals at low LTV sit at the bottom of the range; second charges, land and adverse-credit profiles sit at the top.
Get matched to bridging lenders
Tell us the asset, the amount and the exit. We surface the panel bridging lenders most likely to write the deal, with indicative rate and fee bands you can drop straight back into this calculator. A human adviser reviews every match.
Open bridging eligibility checker →Related reading: bridging finance overview, affordability ratio to stress-test a serviced monthly payment.
By Oliver Mackman. Last reviewed 11 June 2026.