In short: Bridging loan rates in the UK are quoted as a monthly interest rate, typically in the region of 0.6%–1.5% per month depending on loan-to-value, asset type and charge. The headline rate is only part of the picture — arrangement, valuation, legal and exit fees all feed into the true cost, so the right comparison is total cost over the term, not the rate alone.
Bridging is priced differently from a mortgage, and that catches many borrowers out. A mortgage is quoted annually; a bridge is quoted monthly, because it is designed to be held for months, not decades. Understanding the full cost structure is the difference between a bridge that works commercially and one that quietly erodes your margin.
How are bridging loan rates quoted?
Rates are expressed as a monthly percentage. A loan at 0.85% per month on £200,000 costs roughly £1,700 in interest each month it runs. The longer you hold the loan, the more the monthly figure compounds into your total cost — which is why a credible, fast exit matters as much as the rate itself.
What is LTV, and why does it drive your rate?
Loan-to-value (LTV) is the loan as a percentage of the property’s value. A £140,000 loan on a £200,000 property is 70% LTV. It is the single biggest factor in your pricing because it defines the lender’s risk:
| LTV band | Lender risk | Effect on pricing |
|---|---|---|
| Up to 60% | Lower | Most competitive rates |
| 60–70% | Moderate | Standard market pricing |
| 70–80%+ | Higher | Higher rates; fewer lenders |
Lower LTV means more of your own equity is in the deal, so the lender prices the loan more keenly. If you can reduce the loan amount or add security, you move into a better band.
The full cost breakdown
A monthly rate alone never tells you what a bridge costs. These are the components to total up:
| Cost | Typical basis | Notes |
|---|---|---|
| Monthly interest | ~0.6%–1.5% / month | Driven by LTV, asset, charge |
| Arrangement fee | ~1%–2% of loan | Often added to the facility |
| Valuation fee | Property-dependent | Desktop valuations reduce cost |
| Legal fees | Lender + borrower side | Efficient panels keep this lean |
| Exit fee | 0%–1% (if applicable) | Not charged by every lender |
| Broker fee | Varies | Where a broker packages the deal |
How interest is charged: retained, rolled or serviced
- Retained — interest for the full term is deducted from the advance up front. You borrow less net, but make no monthly payments.
- Rolled-up — interest accrues and is settled at the end with the capital.
- Serviced — you pay interest monthly, like a mortgage. Suits borrowers with income to cover it.
The method changes your cashflow significantly even when the rate is identical, so always confirm which applies before comparing two offers.
How to compare bridging lenders fairly
Never compare on the monthly rate alone. Build a total figure:
- Take the monthly rate × expected number of months.
- Add arrangement, valuation, legal and any exit fees.
- Express it as the total cost of the facility for your specific term.
A lender with a slightly higher monthly rate but no exit fee and faster completion can be cheaper overall than a “cheap” rate that drags out legals and adds an exit charge. Speed is a cost saving in bridging. For the wider context, see how bridging finance works.
Frequently asked questions
Are bridging loan rates monthly or annual?
Monthly. Because bridges are short-term, lenders quote a monthly interest rate rather than an annual one.
What is a typical bridging loan rate in the UK?
As a general range, monthly rates often sit between around 0.6% and 1.5%, depending on LTV, the asset and whether it is a first or second charge. Your specific terms depend on the deal.
What does LTV mean?
Loan-to-value is the loan amount as a percentage of the property’s value. Lower LTV usually means better pricing because the lender carries less risk.
Can fees be added to the loan?
Often yes — arrangement fees and retained interest can be built into the facility, reducing the net amount you receive but removing monthly payments.
⚠ Important risk warning: Ponte Finance PLC is not regulated by the Financial Conduct Authority (FCA). Investments are not covered by the Financial Services Compensation Scheme (FSCS) or the Financial Ombudsman Service (FOS). Your capital is at risk. Past performance is not a reliable indicator of future results. Ponte Finance does not guarantee the buy-back of shares or early exit from investments. Your property may be repossessed if you do not keep up repayments on a loan secured against it. Rates and figures shown are illustrative ranges for general information only and are not a quote or financial advice.