A bridging loan is short-term finance secured on property. It’s designed to “bridge” a gap when you need money fast, until longer-term finance (like a mortgage) or a sale completes. This isn’t cheap credit; it’s fast credit.
You’ll often see lenders and brokers offer a 100k bridging loan calculator online, tools that let you plug in the amount, term and interest rate to see estimated costs and monthly charges before you apply.
Typical costs & current rates
In the UK in 2025/26 bridging loan interest rates are significantly higher than standard mortgages and quoted monthly rather than annually:
- Typical rates range from about 0.5% to 1.5% per month, depending on loan-to-value (LTV), property type and your exit plan.
- Some lenders start even lower (from 0.44 – 0.55% per month) in very strong cases.
Lets look at a common £100K bridging example:
| Item | Value |
|---|---|
| Purchase Price (Security Property) | £165,000 |
| Loan Requested | £100,000 |
| Term | 6 months |
| Net LTV | 61% |
| Interest Rate | 1.5% per month |
| Monthly Interest | £100,000 × 1.5% = £1,500 |
| Total Interest (6 months) | £1,500 × 6 = £9,000 |
| Lender Arrangement Fee (1%) | £100,000 × 1% = £1,000 |
| Loan Amount | £100,000 |
| Arrangement Fee | £1,000 |
| Total Interest | £9,000 |
| Total to Repay | £100,000 + £1,000 + £9,000 = £110,000 |
For a 100k bridging loan interest rate of 1% per month, you’d be paying roughly £1,000/month in interest, before fees.
That adds up fast if you hold the loan for many months, which is why bridging finance is meant for short periods (usually 6 – 12 months).
Other costs to budget for:
- Arrangement fee: typically 1–2% of the loan
- Valuation fee
- Legal/solicitor fees
- Redemption admin fees
All these stack on top of the interest.
Common uses of a £100k bridging loan
A bridging loan isn’t everyday finance. Typical uses include:
Buying before you’ve sold
If you’ve found a house at auction or want to complete quickly before your current property is sold, a bridging loan buys time.
Auction purchases
Property bought at auction usually needs funds fast (sometimes within 28 days). Bridging finance lets you act immediately where a mortgage can’t.
Renovation or refurbishment
Investors use bridging loans to buy and renovate a property quickly, then refinance to a longer-term product once the work is done.
Chain breaks
If your sale hasn’t completed but your purchase must, a bridging loan stops the whole chain collapsing.
Unmortgageable property
Some properties (e.g., major structural issues or unusual buildings) can’t get standard mortgage offers until repaired. Bridging loans fill the gap.
Who typically takes out a bridging loan
Because of the cost and risk, the usual borrowers are:
- Property investors and developers needing quick capital
- Auction buyers with tight completion deadlines
- Homeowners in chains needing to move fast
- People buying uninhabitable or unremortgageable properties
- Experienced borrowers with clear exit strategies
Banks and high-street lenders generally don’t offer bridging loans, these come from specialist lenders or brokers.
How you’ll repay it
Bridging loans are short-term finance. Lenders want a clear exit strategy, proof you’ll repay, such as:
- Sale of a property
- Refinance to a mortgage or buy-to-let loan
- A formal funding event (e.g., development finance)
If you can’t repay on time, lenders will expect you to re-bridge or refinance, and monthly interest keeps accruing until you close it out.
How to use a 100k bridging loan calculator
A 100k bridging loan calculator helps you:
- Estimate total interest costs
- See how fees change your effective borrowing cost
- Test different loan terms (3, 6, 12 months)
- Compare lender offers quickly
Most work by having you enter:
- Loan amount (e.g., £100,000)
- Interest rate (monthly)
- Loan term (in months)
- Any fees/arrangement costs
…and they spit back an estimated total cost. It’s not an exact quote, but it gives clarity before you commit.