As of July 2026, a UK bridging loan typically costs 0.55%–1.1% per month in interest — the market average was 0.82% in Q1 2026 (Bridging Trends) — plus fees of roughly 2–5% of the loan. On a £200,000 bridge over nine months, the total cost of credit comes to around £22,000–£23,000, about 11% of the amount borrowed.
Below you'll find every fee itemised, a complete worked example, and a like-for-like comparison of the three ways bridging interest can be charged. All figures are representative market ranges as at 8 July 2026, sourced and dated. New to bridging? Start with our bridging finance guide for how the product works.
How much does a bridging loan cost per month in 2026?
Unlike mortgages, bridging loans are priced as a monthly interest rate. As of July 2026, typical pricing looks like this:
| Scenario | Typical monthly rate (July 2026) | Approx. annualised |
|---|---|---|
| Prime residential, below 60% LTV, strong exit | from ~0.55% | ~6.6% |
| Mainstream residential & buy-to-let bridging | 0.65%–0.95% | ~7.8%–11.4% |
| Market average, all completed loans (Q1 2026) | 0.82% | ~9.8% |
| Higher LTV, adverse credit or complex security | 1.0%–1.5% | ~12%–18% |
Sources: Bridging Trends Q1 2026 (compiled by MT Finance, published May 2026) for the 0.82% market average; broker-quoted ranges as at July 2026. Representative figures only — your quote depends on LTV, property type, credit profile and exit.
The rate you're offered depends on your loan-to-value ratio (LTV), the property type, your exit strategy and how quickly you need to complete. Our bridging loan interest rates guide breaks down how each factor moves the price.
What fees do you pay on a bridging loan?
Interest is only part of the bill. Expect most of these fees on any quote:
| Fee | Typical amount (July 2026) | When it's paid |
|---|---|---|
| Arrangement (facility) fee | 1–2% of the gross loan — ~2% is most common | Usually added to the loan at drawdown |
| Valuation fee | ~£300–£2,000+ on residential, scaling with property value; more for commercial or development sites | Upfront, usually non-refundable |
| Lender's legal fees | ~£750–£1,500+ (you pay the lender's solicitor as well as your own) | At completion |
| Your own solicitor | ~£750–£1,500 | At completion |
| Broker fee | £0–1% — many brokers are paid commission by the lender instead | On offer or completion |
| Exit fee | Often none; some lenders charge ~1% or one month's interest | On redemption |
| Telegraphic transfer (CHAPS) fee | ~£25–£50 | At drawdown |
| Redemption administration fee | ~£100–£300 (removes the lender's charge) | On redemption |
Typical market ranges as at July 2026, compiled from published lender and broker fee scales. Always check the full fee schedule on your illustration.
Gross vs net loan: the arrangement fee — and, if retained, the interest — usually comes out of the facility. The "gross" loan is the whole facility; the "net" loan is the cash you actually receive on day one. Two "£200,000" quotes can put very different sums in your hands, so always compare the net advance and the total cost of credit.
Worked example: a £200,000 bridging loan over nine months
Assumptions: £400,000 property, £200,000 gross loan (50% LTV), nine-month term, interest serviced monthly at 0.85% per month — a representative mainstream rate as at July 2026, consistent with the 0.65%–0.95% band and the 0.82% Q1 2026 average (Bridging Trends). Arrangement fee 2%, broker paid by lender commission, no exit fee.
| Cost line | Basis | Amount |
|---|---|---|
| Monthly interest | £200,000 × 0.85% | £1,700 |
| Interest over 9 months (serviced) | £1,700 × 9 | £15,300 |
| Arrangement (facility) fee | 2% of gross loan | £4,000 |
| Valuation fee | Residential, £400,000 property | £600 |
| Lender's legal fees | Payable by the borrower | £1,200 |
| Your own solicitor | Conveyancing on the bridge | £900 |
| Telegraphic transfer (CHAPS) fee | At drawdown | £35 |
| Redemption administration fee | Removing the lender's charge | £120 |
| Exit fee | None assumed (many lenders charge £0) | £0 |
| Total fees | £6,855 | |
| Total cost of credit | Interest + fees | £22,155 |
Illustrative example on typical July 2026 terms, rounded to the pound. Not an offer or a quote — your figures will differ.
That £22,155 is about 11.1% of the amount borrowed for nine months' use of the money. Two sensitivities worth knowing: if the loan ran a full 12 months, serviced interest rises to £20,400 and the total to roughly £27,255; and if your broker charged a 1% fee instead of taking lender commission, add £2,000.
💡 If the arrangement fee is added to the loan rather than paid from the advance, your gross loan becomes £204,000 and interest is charged on the fee too — around £310 more over nine months at 0.85%. Cheap headline rates with big added fees often cost more overall.
Retained vs serviced vs rolled-up interest: what's the difference in cost?
The same £200,000, nine-month loan at 0.85% per month costs a different amount depending on how the interest is structured:
| Method | How it works | Interest over 9 months | Total cost of credit* | In practice |
|---|---|---|---|---|
| Serviced | You pay interest monthly, like an interest-only mortgage | £15,300 | £22,155 | £1,700/month outgoing; lender must evidence affordability |
| Retained | Interest for the term is deducted from the advance on day one | £15,300 | £22,155 | No monthly payments, but net day-one advance falls to ~£180,700 after retained interest and the arrangement fee |
| Rolled up | Interest compounds monthly and is repaid at redemption | £15,831 | £22,686 | No monthly payments; redemption figure ~£215,831 plus fees — the most expensive route |
*Including the £6,855 of fees from the worked example above. Rolled-up interest compounds: £200,000 × (1.00859 − 1) = £15,831.
Serviced is cheapest if you can afford (and evidence) the payments. Retained suits borrowers who need certainty and no outgoings — and many lenders refund unused retained interest if you exit early. Rolled-up maximises day-one cash but grows fastest; it's usually chosen when the exit is a sale with comfortable equity headroom.
⚠️ Check the early repayment terms. Most bridging lenders let you repay without penalty after a minimum interest period (typically 1–3 months), but not all — and default rates after the term expires are punitive. Make sure your exit has slack in it.
Are bridging loans regulated by the FCA?
If the loan is secured on a home you or an immediate family member live in (or will live in), it's a regulated mortgage contract under FCA rules — most owner-occupier chain-break and downsizing bridges qualify. Most buy-to-let, commercial and land bridging is unregulated: 59% of transactions in Q1 2026 (Bridging Trends). Fewer formal protections apply, so use an FCA-authorised broker — you can verify any firm on the FCA register — and see MoneyHelper's bridging loans overview for an impartial, government-backed summary of the risks.
How can you reduce the cost of a bridging loan?
- Borrow at a lower LTV: pricing from ~0.55% per month is generally reserved for loans below 60% LTV (July 2026 terms). More equity or additional security means a cheaper rate.
- Prefer a closed bridge if you can: a fixed repayment date (e.g. contracts exchanged) prices better than an open-ended loan.
- Match the term to the exit — then add a buffer: too short risks default rates; too long wastes retained interest unless it's refundable.
- Choose serviced interest if affordable: it avoids compounding, saving £531 on our nine-month example.
- Hunt for no-exit-fee lenders: a 1% exit fee (£2,000 on £200,000) can erase the saving from a lower headline rate.
- Compare on total cost of credit: a whole-of-market bridging loan broker will line up quotes on the same basis — net advance, all fees, like-for-like.
Nesto is an introducer, not an adviser: we match you with an FCA-authorised bridging specialist for free, with no obligation. Tell us what you need and we'll connect you, usually the same day.
Bridging loan cost FAQs
How much does a £100,000 bridging loan cost?
On typical July 2026 terms — 0.85% per month over nine months — a £100,000 bridging loan costs about £850 a month in interest (£7,650 over the term), plus roughly £4,900 in fees (a 2% arrangement fee of £2,000 and around £2,900 of valuation, legal and administration costs). Total cost of credit: around £12,500.
Do you pay bridging loan interest monthly?
Only if you choose serviced interest. Many borrowers opt for retained or rolled-up interest instead, where nothing is paid monthly and the interest is settled from the advance at the start or at redemption. Lenders must be satisfied that monthly payments are affordable before agreeing a serviced structure.
What is the cheapest way to pay bridging loan interest?
Serviced interest is cheapest overall because it avoids compounding — £15,300 versus £15,831 rolled up on our £200,000 nine-month example. But it requires provable affordability. If cash flow is tight, retained interest usually beats rolled-up on cost, and many lenders refund unused retained interest if you repay early.
Can you repay a bridging loan early?
Usually, yes — and it is often the plan. Most bridging lenders charge no early repayment penalty after a minimum interest period, typically 1–3 months. If interest is retained or rolled up, repaying early normally reduces the total interest you pay; check the lender's refund policy before you sign.
Do all bridging lenders charge an exit fee?
No. Many bridging lenders charge no exit fee at all; others charge around 1% of the loan or one month's interest on redemption. Because an exit fee can wipe out the benefit of a lower headline rate, always compare quotes on total cost of credit, not the monthly rate alone.
Are bridging loan fees added to the loan?
The arrangement fee usually is — which means you pay interest on it too. Valuation fees are paid upfront, legal fees at completion, and exit or redemption administration fees when you repay. If fees are added to the loan, your gross loan and interest bill rise while your net advance stays the same.