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Total Interest Payable:
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Arrangement Fee:
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Total Repayment:
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Disclaimer: This calculator is intended for illustration purposes only and is not an offer. The actual terms and conditions of any loan may differ based on individual circumstances and lender requirements.
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- Bridging loans from £25k – £60m
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What is a bridging loan calculator?
A commercial bridging loan calculator helps you estimate the cost of a short-term loan for business or property purposes. Whether you're purchasing commercial property, covering cash flow gaps, or funding a development project, this tool gives you a quick breakdown of potential loan costs, including interest rates.
How does a bridging loan calculator work?
A commercial bridging loan calculator is quick and easy to use. Simply enter key details such as your loan amount, loan term (for example, 6 or 12 months), and the estimated monthly interest rate. The calculator will then estimate your total interest payments and the total amount repayable at the end of the term. It’s a useful way to get an instant idea of the potential costs before you apply.
However, keep in mind that bridging loan calculators provide estimates, not exact figures. Your actual loan costs may vary based on lender fees, credit checks, legal costs, and your specific loan terms. For a more accurate quote, you can compare over 50 lenders and get a decision in principle today.
How are commercial bridging loans calculated?
Commercial bridging loans are calculated based on several key factors, including the loan amount, interest rate, fees, and loan term. Below, we break down the main elements that determine the total cost of the finance.
1. Loan Amount (Loan-to-Value)
The loan amount you can borrow is based on the value of the property being used as security. This is usually expressed as a Loan-to-Value (LTV) percentage. Most lenders offer up to 70% to 75% of the property’s current market value.
For example, if a lender offers 70% LTV and the property is worth £500,000, the maximum loan would be £350,000. The exact amount offered will depend on the lender’s criteria and the property type.
2. Interest Rate
Unlike many traditional loans that charge annual interest, bridging loans apply monthly interest rates. These usually range between 0.5% and 2% per month. Some lenders allow you to either pay the interest monthly or "roll up" the interest, meaning you pay it all at the end of the loan term along with the original loan amount.
3. Term (Loan Duration)
Bridging loans are designed as short-term solutions, typically lasting between 1 and 24 months. Since interest is charged monthly, a longer loan term will mean paying more in total interest. It’s essential to choose a term that aligns with your repayment strategy.
4. Legal and Valuation Fees
When arranging a commercial bridging loan, you’ll need to pay for:
- Valuation fees — The lender requires a professional property valuation.
- Legal fees — You’ll usually need to cover both your own legal costs and the lender’s legal costs.
These fees can vary depending on the property value, loan complexity, and legal work involved.
5. Arrangement and Other Fees
Most lenders charge an arrangement fee for setting up the loan. This is often between 1% and 2% of the loan amount. This fee can either be added to the loan or deducted from the amount you receive.
Some lenders may also apply an exit fee when you repay the loan, although not all do. Exit fees are typically a small percentage of the loan amount or a flat fee.
Bridging Loan Cost Example
| Details | Amount |
|---|---|
| Property Value | £500,000 |
| Loan Amount (70% LTV) | £350,000 |
| Monthly Interest Rate | 1% per month |
| Loan Term | 6 months |
| Total Interest | £21,000 (£3,500 × 6 months) |
| Arrangement Fee (2%) | £7,000 |
| Total Repayment at End | £378,000 (plus legal/valuation fees) |
