In this article, we explain how much does a bridging loan cost in the UK and how those costs build over a short borrowing period. 

The guide breaks down interest rates, fees, and the main factors that influence total repayment, helping borrowers understand what they are likely to pay and why costs vary between lenders and scenarios.

• Bridging loan cost for UK borrowers typically falls between 7% and 15% of the loan value after interest and fees.
• Monthly interest usually ranges from 0.55% to 1.25%, with higher pricing linked to leverage, asset risk, and exit clarity.
• Arrangement fees often sit near 1.5% to 2%, while legal, valuation, and admin charges add several thousand pounds.
• KIS Finance brokers help borrowers interpret how bridging loan interest rates vary across lenders.

What are bridging loans used for?

Bridging loans exist to solve timing problems rather than long-term affordability. Borrowers use them when waiting creates risk or lost opportunity. 

The product suits situations where speed matters more than holding cost, and where a clear repayment route already exists.

Common scenarios:

• Buying property at auction with fixed completion deadlines
• Resolving chain breaks during residential purchases
• Funding refurbishment projects ahead of refinance
• Releasing capital while awaiting property sales

Speed replaces traditional underwriting depth. Lenders focus less on long-term affordability and more on asset value, leverage, and exit certainty. 

That shift explains why bridging loan interest rates price monthly and why overall costs accumulate quickly even across short terms. Specialist brokers such as KIS Finance help borrowers interpret how those rates interact with fees, term length, and structure across different lenders.

What is the average total cost of a bridging role?

Across the UK market, most bridging loans land between 7% and 15% of the loan amount once interest and fees combine.

Typical outcomes look like this:

• A six-month £100,000 loan often totals £8,000 to £12,000
• A twelve-month £250,000 loan often totals £25,000 to £30,000
• Larger loans scale broadly in line with these percentages

These ranges assume mainstream residential or semi-commercial security. Higher risk assets or unclear exits push totals upward. 

A defined repayment route, commonly referred to as an exit strategy, lowers perceived risk and directly improves pricing.

Interest rates and how they work

Interest represents the largest single cost driver. Bridging loans quote monthly rates because the loans rarely run long enough for annual pricing to reflect reality.

Current UK market positioning moving into 2026 generally looks like this:

• Around 0.55% to 0.75% per month for lower LTV loans with strong exits
• Roughly 0.75% to 1.25% per month for standard transactions
• Close to 2% per month only for higher risk, high leverage, or urgent cases

Monthly pricing does not convert neatly into annual comparisons, but context helps. A rate of 0.75% per month equates to roughly 9.4% annualised, while a rate of 2% per month approaches the high twenties. These figures exist only for comparison because bridging loans seldom last a full year.

Interest structure also affects cash flow:

• Rolled-up interest accumulates and settles when the loan redeems
• Retained interest deducts interest upfront, refunding unused months
• Serviced interest requires monthly payments and limits balance growth

Each structure suits different liquidity positions and project timelines.

Loans below roughly 55% LTV attract the most competitive rates. Pricing rises steadily as leverage increases toward 75% or 80%.

Bridging loan fees

When calculating a total cost of a bridging loan, you must consider arrangement fees, valuation fees, legal fees, broker fees, and additional administrative charges.

Arrangement fees

Arrangement fees cover lender underwriting, structuring, and approval. Market norms remain stable heading into 2026.

Typical ranges:

• 1.5% to 2% of the loan amount
• £2,000 on a £100,000 loan
• £10,000 on a £500,000 loan

Lenders often roll these fees into the loan balance, which means interest accrues on them during the term. Borrowers sometimes overlook this compounding effect when estimating total cost.

Valuation fees

Every bridging lender requires an independent valuation of the security property. Costs depend on value, complexity, and asset type.

Common valuation ranges include:

• £300 to £500 for properties near £250,000
• £500 to £900 for properties around £500,000
• £800 to £1,500 or more for higher values or complex assets

Valuation fees remain payable even if the loan does not complete because surveyors still deliver the report.

Legal fees

Borrowers cover both their own legal fees and the lender’s legal representation. Combined totals often fall between £1,500 and £3,500.

Costs rise when cases involve:

• Mixed-use or commercial property
• Multiple securities
• Corporate or SPV borrowing structures

Legal fees behave more like fixed costs, which explains why smaller bridging loans sometimes appear disproportionately expensive.

Broker fees

Brokers play a central role within the UK bridging market. Fee models vary:

• Some brokers charge nothing directly and receive lender commission
• Others apply 0.5% to 2% of the loan amount or a flat fee

An experienced broker often reduces overall cost through lender selection, stronger terms, and faster completion. That indirect saving frequently outweighs any direct fee.

Administrative charges

Smaller line items accumulate quickly. Common charges include:

• Drawdown fees around £295 to £500
• Redemption fees around £100 to £150
• Bank transfer fees around £25 to £50

These amounts look modest individually but still affect total repayment.

Cost examples

Worked examples illustrate how interest, fees, and timing combine into a final figure. Actual pricing varies, but these scenarios reflect typical UK market outcomes heading into 2026.

A £100,000 bridging loan over six months at 0.75% monthly interest often produces:

• Interest of roughly £4,500 across the term
• An arrangement fee near £2,000
• Valuation costs around £500 for a standard residential asset
• Combined legal fees close to £2,500
• Administrative charges of approximately £400

Total repayment commonly lands close to £10,000, equivalent to around 10% of the loan amount.

A £250,000 loan over twelve months at 0.65% monthly interest typically includes:

• Around £20,000 in accumulated interest
• An arrangement fee of roughly £5,000
• Valuation costs near £500
• Legal fees close to £2,500
• Administrative charges around £440

Total costs often reach £28,000 to £29,000, assuming no exit fees and repayment on schedule.

A £500,000 loan over six months at 0.85% monthly interest frequently results in:

• Interest near £25,000
• Arrangement fees of around £10,000
• Valuation fees close to £900
• Legal costs near £3,500
• Administrative charges around £440

The combined total commonly approaches £40,000. Larger loans scale proportionally, though stronger cases sometimes attract marginally lower rates or negotiated fees.

How to reduce bridging loan costs?

Borrowers lower total costs when they address pricing drivers early rather than focusing narrowly on interest rates. Lenders reward clarity, reduced risk, and efficient execution.

Cost reduction typically comes from:

• Lower loan-to-value ratios, which unlock sharper pricing bands
• Clear exit strategies, supported with evidence rather than assumptions
• Shorter loan terms, limiting interest accumulation
• Clean property security, which reduces legal and valuation complexity

Preparation also matters. Early submission of documentation speeds underwriting and reduces delays that extend interest exposure.

FAQs

What is the typical cost of a bridging loan?

Typical costs fall between seven and fifteen percent of the loan amount once interest and fees accumulate. A six month £100,000 loan often reaches between £8,000 and £12,000.

Why do bridging loans cost more than mortgages?

Bridging lenders price for speed and short durations. Monthly rates between 0.5 and 1.5 percent exceed standard mortgage pricing because underwriting compresses into days rather than weeks.

Can I negotiate fees?

Arrangement fees, exit fees, and interest rates sometimes change when borrowers present strong cases or work with experienced brokers. Valuation and legal fees tend to remain fixed.

When do I pay interest?

Interest timing depends on whether you choose rolled-up, retained, or serviced structures. Each option affects cash flow differently.

Are there hidden costs?

Transparent lenders provide full cost schedules. Potential additions include extension fees, monitoring fees on development loans, and early repayment charges under some structures.

How fast can a bridging loan complete?

Straightforward cases often complete within one to two weeks. Some urgent cases complete faster, although faster completion can slightly raise pricing.