Bridging loan rates · England & Wales
Bridging loan rates, priced on your deal
Bridging is priced monthly, not annually – with Proxima rates from 0.85% per month. What you actually pay depends on the asset, the loan to value, the charge position and the strength of your exit. Here is exactly what drives the rate, the fees that sit alongside it, and how to keep the whole cost down.
The basics
How bridging loan interest works
Bridging loan rates are quoted as a monthly interest rate, not an annual one. That is the single biggest difference between how bridging and term mortgages are presented, and the thing people most often misread. A rate of 0.85% per month is the cost of the money for one month – over a year that is 10.2%, but a bridge is rarely held for exactly a year. Because it is short-term property finance repaid from a defined exit, you pay interest only for the months you actually use the loan (subject to minimum interest periods, typically three months).
Interest accrues month by month across the term. Whether you pay it as you go or roll it into the balance is a choice we cover below. Yes, bridging loan rates are higher than a residential mortgage rate – you are paying for speed, flexibility and certainty of completion that a mainstream lender cannot match. The total interest bill on a short, well-planned bridge is often smaller than people expect, because the term is measured in months.
What drives the rate
What determines your bridging loan rate
There is no single bridging loan rate – there is a rate for your deal. A lender prices the risk of your specific case, so two borrowers can be quoted very different rates on the same day. Four factors move the number more than anything else.
On top of those four, the loan size, the term, the borrower’s experience and any adverse credit all affect the number. A larger loan against a strong asset with a low LTV and a watertight exit is the profile that earns the keenest bridging loan rates. Push any one of those the wrong way and the rate rises to match the increased risk.
How you pay it
The three ways interest is paid
The headline rate is the same three ways, but how the interest is handled changes your net loan and your monthly cashflow. You choose the model that fits the deal.
Retained
The lender deducts the full term’s interest from the advance upfront. You make no monthly payments and redeem the gross loan at the end but your net loan on day one is smaller.
Rolled up
Interest is added to the balance each month and repaid in full at redemption. No monthly outlay, and you only pay for the months used but the balance climbs across the term.
Serviced
You pay the interest monthly and redeem the principal at the end, so the balance stays flat and your net loan is largest, provided the deal generates income to cover the payments.
Retained and rolled-up interest take monthly payments out of your hands, which particularly suits refurbishments and developments with no income until sale or letting. Serviced interest keeps the balance flat and is a fit where the property already produces rent. Our bridging loan calculator lets you model all three, so you can see the net loan and total cost for each before you commit.
The full cost
The fees beyond the interest rate
The monthly rate is only part of what a bridging loan costs. To compare offers fairly you have to look at the whole fee stack, because a keen headline rate can hide a heavier set of charges. Here is what to budget for.
Arrangement fee
Also called the facility or lender fee, this is the largest cost after interest – usually 2% of the loan. It is typically deducted from the advance rather than paid in cash, so it reduces your net loan. Always check whether a quoted rate comes with a standard arrangement fee before you decide it is cheap. Also keep an eye out for high administration fees.
Valuation fee
A RICS valuation confirms the security value that sets your loan to value and informs your rate. The cost scales with the size and complexity of property, and on the right cases a desktop valuation or AVM can replace a full physical inspection – much cheaper and faster. On stronger, lower-LTV deals we can sometimes lend on a lighter valuation basis.
Legal costs
You typically cover the lender’s legal fees as well as your own. Working with experienced bridging solicitors and market-leading title indemnity insurance keeps this cost contained and the timeline short – sloppy legals are where completions slip and costs can balloon.
Exit fee
Some lenders charge an exit fee on redemption, often 1% of the loan or one month’s interest. Many, including us on almost all cases, do not. An exit fee is easy to miss when comparing rates, so ask for it in writing. There may also be a broker fee if you arrange through an intermediary rather than dealing directly with the lender.
Add it up and the true cost of a bridge is the interest plus the arrangement fee, valuation, legals and any exit fee. The clearest way to see the real number for your deal is to run it through our bridging loan calculator, which shows the gross loan, the net advance and the total cost across the term.
Keeping it down
How to get the lowest bridging loan rate
Because the rate is priced on risk, the way to bring it down is to reduce the risk you present. A few things move the needle more than just haggling.
- → Keep the LTV low. Putting in more equity or offering additional security drops your loan to value and, with it, your rate.
- → Evidence your exit. An exchanged sale, an agreed refinance or a strong track record turns an open bridge into a closed one and prices keener.
- → Offer a first charge. A clean first charge over a mainstream asset is the lowest-risk profile a lender can price.
- → Right-size the term. Don’t take six months when your exit lands in 12 – you don’t want to incur extension fees or worse, so a realistic term saves real money.
The lowest bridging loan rate on paper is not always the cheapest deal in practice. Weigh the rate against the arrangement fee, the exit fee and – crucially – whether the lender can actually complete in the time you have. A slightly higher rate that funds on schedule beats a market-leading rate that collapses a week before completion or takes weeks to get over the line.
Proxima was founded by highly experienced operators who have overseen in excess of £500m of property lending. You deal directly with the decision-makers who set the rate, not a broker stacking margin on margin, with a prompt decision in principle within 24 hours. We work with best-in-class solicitors and market-leading title indemnity to keep completion fast and certain. Meet the team.
A bridging loan is secured against property. Your property may be at risk if you do not keep up repayments on a loan secured against it. All figures on this page are illustrative and not a quote or offer of finance.
Rates you can trust
A rate that holds to completion
We price the risk on the asset and the exit, quote you an honest rate the same day, and stand behind it. A decision in principle lands within 24 hours, and the person who sets your rate is the person who completes the loan. Model your deal on the calculator, then tell us about it.
Explore
Rates in context
Calculator
Model the rate, net loan and total cost across all three interest models.
Lenders
How our direct pricing compares to other bridging lenders and brokers.
FAQs
Bridging loan rate questions, answered
What is the typical interest rate on a bridging loan?
Bridging is priced monthly. Across the market, rates commonly run from around 0.75% to 1.5% per month, with Proxima rates from 0.85% per month. Where inside that range your rate sits depends on the asset, the loan to value, the charge position and the strength of your exit; a low-LTV first charge over a standard residential property with a clear exit prices at the keen end.
Are bridging rates higher than mortgage rates?
Yes. A monthly bridging rate is higher than an annual mortgage rate because bridging is short-term, fast and flexible, and priced on the risk of a single deal rather than long-term affordability. The fair comparison is the total interest over the months you actually hold the loan; on a short, well-planned bridge that bill is often smaller than people expect.
What are the disadvantages of a bridging loan?
Interest is charged monthly and adds up quickly, and there is a fee stack on top; an arrangement fee of around 2%, a valuation, legal costs and sometimes an exit fee. The loan is secured against property, so your property may be at risk if the exit fails and you cannot repay. The main risk is a weak or delayed exit, which is why we stress-test the exit before we lend.
Can I reduce my bridging loan rate?
Often, yes – by reducing the risk on your deal. A lower loan to value, a first charge, a stronger and better-evidenced exit and a realistic term all pull the rate down. Dealing directly with the lender rather than through a broker chain removes a fee and a layer of margin too. Run your numbers through our calculator and then talk to us about structuring the deal.
Are bridging loan rates fixed or variable?
Most bridging loans are agreed at a fixed monthly rate for the term, so you know the cost from day one. That certainty is one of the reasons professionals use bridging for time-critical deals – the rate quoted is the rate you pay, and with us it holds from decision in principle through to loan completion.
Have a deal in mind?
Tell us about it and you’ll get a clear and commercial view the same day – direct from decision makers.
