To compare bridging loan quotes, work out for each one the net amount you will receive, the total cost over your expected term and the cost if you repay early or late. The monthly rate matters, but so do the arrangement fee, any exit fee, whether interest is retained or serviced, minimum interest periods and the valuation and legal costs you pay.
At a glance
- Ways interest is commonly paid
- Serviced monthly, retained upfront or rolled up
- Exit fees
- Lendhub and Octane Capital publish none; BFS none on standard facilities
- Early repayment
- Assetz Capital publishes no early repayment charges or minimum charging periods
- FCA Handbook bridging loan definition
- A regulated mortgage contract with a term of 12 months or less
How do you compare bridging loan quotes?
To compare bridging loan quotes, turn each one into the same set of figures, in writing, before you pay for a valuation. A bridging loan comparison on the monthly rate alone misses most of what decides the cost.
- Net advance: the cash you actually receive after fees and any retained interest.
- Total cost over the term you expect to need, including every fee.
- Cost if you repay early: is there a minimum interest period or an early repayment charge?
- Cost if you repay late: extension fees, a higher rate or default interest.
- Third-party costs you pay: valuation, your lender's legal fees and your own.
Our guide to bridging loans explains how bridging works and when it fits. This page is about putting quotes side by side.
What makes up the cost of a bridging loan?
| Item | What it is | What to ask |
|---|---|---|
| Monthly interest rate | Usually quoted per month, not per year | Is it fixed or variable? Is interest charged daily or for whole months? |
| Arrangement fee | Often a percentage of the gross loan | Is it deducted from the advance or added to the loan? |
| Exit fee | A fee on repayment, if charged | Is it a percentage of the loan or of the sale price? |
| Interest method | Serviced, retained or rolled up | If retained, is unused interest refunded on early repayment? |
| Minimum interest period | A minimum number of months charged | What do I pay if I repay in month two? |
| Valuation and legal fees | Usually paid by you, whether or not the loan completes | Which surveyor and solicitors are required, and the quoted cost? |
| Admin and other fees | Telegraphic transfer, admin or monitoring fees | Are all fees listed in the offer? |
| Extension and default terms | What applies if the term runs out | What rate and fees apply after the end date? |
The loan to value matters as much as the rate, because it decides how much you can borrow at all. Our page on loan to value explains how lenders work it out.
How do retained, serviced and rolled-up interest compare?
- Serviced. You pay interest each month. You receive more of the loan on day one, but need the cash flow to meet the payments, and some lenders ask for evidence that you can.
- Retained. The lender deducts the interest for the term from the advance at the start. No monthly payments, but less cash in hand, and early repayment only saves money if unused interest is refunded.
- Rolled up. Interest is added to the loan each month and repaid at the end. No monthly payments, but the balance grows, so check the loan to value at the end of the term.
Retained and rolled-up interest suit a borrower with no income from the property during the term, such as a refurbishment. Serviced interest usually costs less in total because the balance does not grow, but only works if the payments are affordable.
What does a side-by-side bridging loan comparison look like?
This worked example compares two quotes for a £300,000 gross loan over 12 months. The numbers are round figures chosen to show the arithmetic. They are not market rates or any lender's terms.
| Quote A | Quote B | |
|---|---|---|
| Monthly rate | 0.75%, retained | 0.85%, serviced monthly |
| Arrangement fee (2%) | £6,000, deducted | £6,000, deducted |
| Interest for 12 months | £27,000, deducted upfront | £30,600, paid at £2,550 a month |
| Exit fee | 1% (£3,000) | None |
| Cash you receive on day one | £267,000 | £294,000 |
| Total cost if held 12 months | £36,000 | £36,600 |
| Total cost if repaid after 6 months, unused retained interest refunded | £22,500 | £21,300 |
Valuation and legal fees are left out because they would be similar for both. Quote A looks cheaper on the monthly rate and costs £600 less over a full year, but puts £27,000 less in your hands on day one and costs more if you repay at six months. If Quote A did not refund unused retained interest, repaying early would save nothing on interest.
The cheaper quote depends on how long you will really need the money and how much cash you need on completion. If you need the full £294,000 in hand, Quote A would have to be grossed up, and its fees and interest would rise with it.
What do bridging lenders publish about their fees and terms?
Few lenders publish rates, but several publish features that change the total cost, such as exit fees and early repayment terms. The table is built from their profiles in our lender directory, in alphabetical order, and is not a ranking.
| Lender | Product | Amount | Term | Repayment |
|---|---|---|---|---|
| Assetz Capital | Bridging finance | Preferred loan size £500k to £10m (terms outside the guidelines considered) | Commitment term 2 to 24 months | Interest-only, interest-retained or serviced options; no early repayment charges or minimum charging periods; maximum LTV up to 75% of market value |
| Bridging Finance Solutions (BFS) | Bridging loans (incl. property purchase, capital release, auction, short-term cash flow) | Typically £50,000 to £2m | 1 day to 24 months (another page describes a period of 12 months) | Interest serviced monthly, or retained for up to 12 months; up to 70% of open market value; overpayments without penalty after the initial term |
| Glenhawk | Residential bridging | £250,000 to £10,000,000 | 3 to 24 months | Short-term loan; LTV up to 80%; no exit fee |
| Glenhawk | Commercial bridging | £250,000 to £3,000,000 | 3 to 24 months | Interest retained or serviced; 1st charge only; LTV up to 70% |
| Lendhub | Bridging | £100k to £10m | Up to 24 months | Serviced, retained, part-retained or rolled interest; max LTV 75% (feature list states up to 80% LTV and up to 90% LTP) |
| MT Finance | Property purchase bridging | Not published | 1 month minimum; up to 12 months regulated, up to 24 months unregulated | Not published; up to 70% LTV on first and second charges (another page states up to 75% LTV for properties under 60% commercial space) |
| Octane Capital | Bridging loans (residential and semi-commercial) | From £175,000 to £15,000,000 (and beyond) | Up to 24 months | Fixed or variable; daily interest |
| Westwood Capital Finance | Bridging loans (purchase, refurbishment, auction, below market purchase, stock purchase, secured business loan) | £100,000 to £2,000,000 | 3 to 24 months | Interest serviced monthly or retained; repay at any time with no penalties; 1st or 2nd legal charge |
- Assetz Capital says there are no early repayment charges or minimum charging periods on its bridging, and offers interest-only, retained or serviced interest. It lends to limited companies and LLPs.
- Bridging Finance Solutions states no upfront fees and no exit fees on standard loan facilities, while valuation fees may be payable. Interest can be serviced, or retained for up to 12 months.
- Glenhawk publishes no exit fee on its residential and regulated bridging, says an admin fee applies on those loans, and that extension and default fees may apply.
- Lendhub states there are no exit fees, and offers serviced, retained, part-retained or rolled interest.
- MT Finance says no fees or early repayment charges apply for repaying after the first month.
- Octane Capital says it charges no exit fees, calculates interest daily and lends against open market value rather than a 180-day value.
- Westwood Capital Finance says there are no early repayment penalties, with interest paid monthly or deferred to the end.
Is the cheapest bridging loan the one with the lowest rate?
Not necessarily. A cheap bridging loan on paper can cost more in practice if it carries an exit fee, a minimum interest period you will not use, retained interest that is not refunded or a lower loan to value that forces you to find more cash. The cheapest quote is the one with the lowest total cost for the term you will actually need, at the net advance you actually need.
Bridging is often quoted monthly and held for months, not years, so an annual percentage rate can mislead in either direction. Our guide to APR explains what an annual rate does and does not capture.
If the sale or refinance is delayed, the extension and default terms decide the cost. Compare them as carefully as the headline rate.
Does it matter whether the quote is for a regulated bridge?
Yes, because fewer lenders offer regulated loans and the process differs. Under article 61(3)(a) of the Regulated Activities Order, a loan is a regulated mortgage contract where the borrower is an individual or trustees and at least 40% of the land is used, or intended to be used, as or in connection with a dwelling, unless an exclusion in article 61A, such as the one for investment property loans, applies, and the FCA Handbook treats a regulated mortgage contract of 12 months or less as a bridging loan. Our guide to regulated bridging loan lenders explains which lenders offer each kind.
How do you get bridging loan quotes to compare?
Ask each lender or broker for a written decision in principle showing the gross loan, net advance, rate, interest method, every fee and the term, and the cost of early and late repayment. Our guide to how to get a bridging loan sets out the steps from enquiry to funds.
Capzy is a credit broker, not a lender, and the lender pays us when a facility completes. You can check your funding options with a soft search that does not affect your credit score. A lender's full application may involve a hard search, and all lending is subject to status and lender criteria. More guides are in our types of finance section.
Sources
- Regulated Activities Order 2001, article 61: regulated mortgage contracts, legislation.gov.uk
- Regulated Activities Order 2001, article 61A: exclusions, legislation.gov.uk
- Glossary: bridging loan, Financial Conduct Authority
- Assetz Capital: Bridging Finance, Assetz Capital
- Bridging Finance Solutions (BFS): Home page and footer, Bridging Finance Solutions (BFS)
- Glenhawk: Home, Glenhawk
- Lendhub: Home page and footer, Lendhub
- MT Finance: Bridging Loans, MT Finance
- Octane Capital: Bridging loans, Octane Capital
- Westwood Capital Finance: Home, Westwood Capital Finance
Capzy is a credit broker, not a lender. We get paid by the lender. This page is general information, not financial, tax or legal advice. Finance is subject to status, lender criteria and affordability; rates and terms depend on your circumstances.