Interest gets the attention, but fees often determine whether the bridge remains efficient. In most UK cases, the first fee to model is the arrangement fee, commonly 1% to 2% of the facility. Legal fees are also central: borrower legal plus lender legal costs can typically land around £800 to £1500 for straightforward work, sometimes more if title complexity or document negotiation expands. Valuation is normally required and for standard residential assets might sit around £300 to £600, with wider ranges for specialist properties, portfolios or commercial units. If a broker is involved, there may be a broker fee, and some deals include monitoring, drawdown or admin costs.
| Cost item | Common range (UK 2026) | How it affects planning |
|---|---|---|
| Monthly interest | 0.5% to 1.5% per month | Main driver of cost over time. Each extra month has immediate impact. |
| Arrangement fee | 1% to 2% | Often payable from loan proceeds or upfront; include in total capital stack. |
| Legal fees | £800 to £1500 typical | Can increase with title issues, company structures, or urgent completions. |
| Valuation fee | £300 to £600 typical | Higher for specialist assets or portfolios; can affect timeline too. |
| Broker / packaging fee | 0% to 2% | Varies by route and service level; include clearly in total cost model. |
| Exit / admin fees | Case dependent | Can become material if project drifts beyond planned redemption date. |
A practical approach is to build three totals before sign-off: (1) interest-only cost, (2) fee-only cost, and (3) all-in cost. The first tells you the time sensitivity, the second tells you fixed transaction friction, and the third tells you the true cash consequence. This prevents a common planning error where a project appears profitable on gross spread but underperforms when transaction costs are fully included.
Borrowers usually choose between an open bridge and a closed bridge. A closed bridge has a known exit date, often supported by an exchange-complete sale, a remortgage offer in progress, or another documented liquidity event. Because the route out is clearer, closed bridge cases can be easier to underwrite and may secure more competitive terms when everything else is equal. Open bridges are useful when timing is uncertain, but the uncertainty itself is risk that lenders price for. That can mean tighter leverage, stronger stress testing, and greater focus on fallback exits.
For budgeting, treat open bridge planning conservatively by adding a time buffer. If your expected period is six months, model at least eight months to test resilience. This is particularly relevant where sale chains are fragile, planning decisions are pending, or refinance depends on post-works valuation evidence. Underestimating timeline is one of the fastest ways to turn a workable bridge into an expensive one.
| Bridge type | Typical use | Main advantage | Main risk |
|---|---|---|---|
| Closed bridge | Known completion or refinance date | Clearer underwriting and potentially sharper pricing | If expected date slips, extension cost can still rise quickly |
| Open bridge | Exit date uncertain at start | Useful flexibility where timing is not fixed | Higher uncertainty can increase pricing and reduce leverage |
Neither format is automatically better. Closed bridges suit certainty. Open bridges suit flexibility. The right choice depends on whether your exit is genuinely date-certain or only aspirational.
Maximum gross LTV in bridging often sits around 70% to 80%, though actual offers depend on property type, borrower profile and exit quality. Prime residential assets with straightforward legal title and credible exits may support stronger leverage. Specialist commercial buildings, unusual construction, high vacancy, short lease issues, or legal defects can reduce available LTV or push pricing upward. Lenders also examine whether required works are cosmetic or structural, because structural risk can change both valuation confidence and saleability.
In practical underwriting, LTV is not only about security margin; it is also a proxy for options under stress. If your transaction drifts and the lender needs confidence in refinance or sale, lower leverage gives both borrower and lender more room. That is why reducing leverage can sometimes improve terms and speed. Even if you can borrow at the top end of LTV, the cheapest strategic decision is not always the largest loan. Borrowing slightly less can improve resilience, especially in uncertain markets or where your exit depends on one key milestone.
Use the property value field in the calculator to test this directly. If the same loan amount is mapped against a lower valuation, LTV rises and risk band changes. That shift helps you stress test whether your structure still works if valuation evidence comes in softer than expected.
Bridging loans in the UK can be regulated or unregulated depending on the use and the property. A case is more likely to be regulated where the security is, or will become, your main residence. Many buy-to-let and commercial transactions are commonly unregulated. This distinction matters because process, documentation and protections can differ materially. Regulated cases often carry additional consumer safeguards and can require stricter affordability and suitability handling, while unregulated cases are frequently assessed primarily on asset and exit logic.
Borrowers should not treat unregulated as automatically negative or regulated as automatically cheap. They serve different purposes. Professional investors often rely on unregulated bridges for speed in auction or refurb contexts. Owner-occupier borrowers in residential transitions may need regulated structures. The right path is the one that fits your actual use case and legal position. Misclassification can create avoidable delays, and delays in bridging are expensive because cost continues monthly.
Before committing, confirm the expected regulatory status in writing and ask your broker or lender to explain what that means for timeline, required evidence, legal process and contingency planning. A clear understanding at the start reduces execution risk later.
A second charge bridging loan sits behind an existing first mortgage. This can be useful if the first charge has a strong rate you do not want to redeem, or if early repayment charges on the main mortgage make a full refinance inefficient. In these cases, a second charge bridge can provide short-term capital without disturbing the original senior debt. Typical uses include fast auction deposits, refurbishment capital, planning costs, or short-term liquidity while waiting for a sale or refinance event.
Because second charge lenders rank behind the first charge lender, terms can be tighter and pricing can be higher than equivalent first charge cases. Legal process can also involve more coordination. In the calculator, checking the second-charge option applies a simple rate uplift to reflect that risk profile. It is only an estimate, but it helps frame the likely direction of cost.
If you are considering second charge borrowing, request a side-by-side comparison between: (1) second charge bridge while retaining first mortgage, and (2) redeeming everything into a first charge bridge. The cheaper path depends on timeline, penalty costs, and how quickly your exit can be completed.
Chain breaks are one of the most common reasons to use a bridge. A buyer may need to complete on a purchase before sale proceeds from an existing property are available. Bridging can protect the onward purchase and avoid losing the new property. In this scenario, the exit is normally the eventual sale of the old home, so timing confidence is critical. If the sale is already advanced with strong evidence, a closed bridge may fit. If timing is uncertain, an open bridge with buffer modelling is safer. Build cost projections with delay scenarios because chain delays are frequent.
Auction buyers often have 28 days, sometimes less, to complete. Traditional mortgage routes may not move fast enough, especially when valuation or legal complexity appears late. Bridging can deliver speed, then the borrower exits via sale or remortgage once the asset is stabilised. Auction projects are where planning discipline matters most: include stamp duty, fees, refurb costs, and a realistic sales period in one integrated model. Profit can disappear if timeline assumptions are optimistic.
For light-to-moderate refurbishment, a bridge can finance purchase plus short-term works, then exit into a term mortgage or sale at improved value. This is a classic value-add strategy, but execution risk sits in contractor timing, cost overruns and valuation evidence at refinance. If your project is closer to full redevelopment, you may need to assess whether development finance is the more suitable next step at exit or even from the start.
Some investors use short-term finance to secure a site or asset while seeking planning uplift. The objective is to crystallise increased value before refinancing, selling, or moving into development finance. This can be high-reward but timeline-sensitive. Planning decisions can take longer than expected, so open-bridge risk is real. The strongest structures include multiple fallback exits, adequate cost buffer and evidence that the property remains marketable even if the planning outcome is delayed or reduced.
The exit strategy is the centre of bridging underwriting. Lenders typically ask not only “how will you repay?” but also “what if that plan slips?” Three routes dominate in 2026: sale, remortgage, and move into development finance for more complex schemes. A sale-led exit can work well where demand is proven and pricing is realistic, but listing periods and chain events can cause slippage. A remortgage-led exit can be efficient if title, condition and affordability criteria will be met by completion. Development-finance transitions can make sense when a short bridge secures control, then a larger structured facility funds staged delivery.
Strong deals usually present a primary and secondary exit. For example, primary exit might be sale at month six, secondary exit might be refinance at month eight if the sale market softens. This dual-route design improves lender confidence and borrower resilience. It also gives you a framework for extension decisions if conditions change. Without alternatives, borrowers can be forced into poor negotiation positions near maturity.
When documenting your exit assumptions, include specific milestones: legal completion dates, refinance application windows, valuation readiness, contractor completion dates, and marketing timeline assumptions. The more concrete the plan, the easier it is to test whether the bridge still works under stress.
Example A: £200,000 closed bridge, 6 months, 1.0% monthly rate. Interest alone is about £12,000. If arrangement fee is 1.5%, broker fee 0.5%, legal fees £1,000 and valuation £450, total cost rises to roughly £16,000 to £18,000 depending on exact structure and whether additional admin fees apply. This illustrates why fee visibility matters. A deal that looked like “12k cost” can become materially higher once frictional costs are included. If the exit slips by two months, interest adds another £4,000 at 1.0% per month before extra extension-related costs.
Example B: open bridge with uncertainty buffer. Suppose a borrower expects six months but models eight due to sale uncertainty. On the same £200,000 balance at 1.1% monthly, interest can approach £17,600 before fees. Add arrangement at 2%, legal and valuation, and total borrowing cost may exceed £23,000 depending on ancillary charges. This does not automatically make the transaction wrong, but it forces a realistic view of minimum required margin. If your project spread is thin, small timeline drift can remove profit.
Interpret calculator output as a planning baseline rather than a formal quote. Underwriting can change fees, legal structure can add costs, and valuation outcomes can shift leverage. The practical use of the tool is to decide whether your transaction still makes sense after adding time and fee contingencies. If not, reduce leverage, improve exit clarity, or renegotiate purchase economics before proceeding.
Bridging finance works best when it is treated as a project with defined controls. First, validate your valuation assumptions with evidence from recent comparables rather than optimistic asking prices. Second, include at least one timing buffer in every model, even for closed bridge cases. Third, map all fees in a single sheet and separate fixed transaction cost from time-dependent cost. Fourth, maintain liquidity for overruns rather than operating with no cash reserve. Fifth, pre-plan your refinance path early if remortgage is your exit; waiting until the final weeks raises execution risk.
A disciplined pre-completion checklist can prevent costly surprises: verify title constraints, confirm planning status, check lease length where relevant, verify contractor availability if refurb is required, and ensure legal parties can complete within target windows. Short-term debt rewards preparation. Most expensive outcomes are not caused by one large error; they come from several small assumptions failing at once.
This page is an educational calculator, not personal financial advice. For transaction decisions, use qualified legal and finance professionals and request written illustrations from lenders or brokers before committing.
Typical pricing in many mainstream scenarios sits around 0.5% to 1.5% per month. The final rate depends on LTV, property quality, transaction complexity, borrower profile and the strength of exit. Lower leverage and clearer exits generally improve terms. Higher risk, specialist assets or uncertain exits often increase cost.
A closed bridge has a known redemption point, such as a contracted sale or scheduled refinance date. An open bridge has no fixed end date and is used where timing is uncertain. Open structures can be very useful, but they need stronger contingency planning because delay risk is higher.
Many deals target a maximum gross LTV in the 70% to 80% range, but that range is not guaranteed. Lender appetite, property type, location, condition, and exit confidence all matter. In weaker scenarios, available LTV can be lower. Borrowing less may improve price and resilience.
At minimum, include arrangement fee (often 1% to 2%), legal fees (often around £800 to £1500), valuation fees (often around £300 to £600), and any broker, admin or exit charges. The all-in figure can be much higher than interest-only estimates, so always model total borrowing cost.
Yes, in some cases. A second charge bridge sits behind your existing first mortgage and can be useful when redeeming the first charge is inefficient. Terms can be tighter because the second lender ranks behind the first lender on security. Compare total costs against first-charge alternatives.
Both exist. Bridging secured on a property that is or will be your main residence is more likely to fall under regulated rules. Many investment, buy-to-let, and commercial uses are commonly unregulated. The distinction affects process, documentation and protections, so confirm status before you proceed.
Delays usually increase total cost quickly because interest continues monthly and additional extension or legal costs may appear. Plan a buffer from day one. Build a secondary exit route, keep reserve liquidity and communicate early with your lender or broker if timeline assumptions change.