Bridging loan calculator
Estimate the monthly interest, total interest, arrangement fee and net day one advance on a holiday let or serviced accommodation bridge.
Your estimate
Illustrative only. Not a quote or advice. Not an offer of finance.
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How the bridging loan calculator works
Bridging is priced monthly, so we start with the monthly interest, which is the gross loan multiplied by the monthly rate. The total interest is that figure multiplied by the term in months. The arrangement fee is the gross loan multiplied by the fee percentage. We then build the total to repay and the net advance differently depending on whether interest is rolled or serviced.
With rolled interest the total to repay is the gross loan plus the total interest plus the fee, and the net advance is the gross loan minus the total interest and the fee, because both are retained up front. With serviced interest you pay the monthly interest as you go, so the total to repay is the gross loan plus the fee, and the net advance is the gross loan minus the fee only.
Rolled versus serviced interest
Rolled, or retained, interest means nothing to pay each month, which suits a refurbishment with the property empty during the works, but it reduces the day one advance and raises the redemption figure. Serviced interest keeps the loan smaller and the redemption lower, but you need monthly cash flow to cover it. The right choice depends on whether the property is producing short-let income during the bridge. Once you have an exit lined up, our holiday let mortgage calculator helps model the term loan you refinance onto.
Worked example
On a 350,000 pound bridge at 0.85 percent a month over nine months with a 2 percent fee, the monthly interest is 2,975 pounds, the total interest is 26,775 pounds and the fee is 7,000 pounds. On rolled interest the total to repay is 383,775 pounds and the net day one advance is 316,225 pounds. On serviced interest the total to repay is 357,000 pounds and the net advance is 343,000 pounds.
Bridging loan calculator: common questions
What does a bridging loan on a holiday let cost?
Bridging is priced per month, indicatively from around 0.75 percent, plus an arrangement fee of about 2 percent. On a 350,000 pound bridge at 0.85 percent a month over nine months, the interest is roughly 27,000 pounds and the fee about 7,000 pounds. Enter your figures above to see the total to repay and the net advance.
What is the difference between rolled and serviced interest?
With rolled, sometimes called retained, interest the monthly cost is added to the loan and paid at the end, so there is nothing to pay each month but the total to repay is higher. With serviced interest you pay the monthly interest as you go, so the day one advance is larger and the redemption figure is lower. Toggle between them above to compare.
When would I use a bridge on a holiday let deal?
Bridging suits a fast purchase at auction, a property that needs refurbishment or a change of use before it can be let as serviced accommodation, or a deal a term lender will not yet fund because the short-let income is not yet proven. It is short term and more expensive than a holiday let mortgage, so the exit, usually a sale or a refinance onto a term loan once the property is up and letting, matters as much as the rate. Send us the plan and we will sense check the exit.
Need a bridge on a holiday let?
Send us the deal and the exit and we will come back with a view on fundability and likely terms within one working day.