Glossary definition
Base Rate
The interest rate set by the Bank of England's Monetary Policy Committee, which serves as the benchmark for variable-rate lending across the UK financial system. Development finance and bridging loan rates are often quoted as a margin above the Bank of England base rate, for example base rate plus 4.5%.
Definition
The interest rate set by the Bank of England's Monetary Policy Committee, which serves as the benchmark for variable-rate lending across the UK financial system. Development finance and bridging loan rates are often quoted as a margin above the Bank of England base rate, for example base rate plus 4.5%. Changes to the base rate directly affect borrowing costs on variable-rate facilities and influence fixed-rate pricing through the swap market.
See also
Closely related terms.
Rolled Up Interest
An interest arrangement where monthly interest charges are added to the outstanding loan balance rather than being paid by the borrower each month.
Serviced Interest
An interest arrangement where the borrower makes regular monthly interest payments throughout the loan term, keeping the outstanding loan balance static.
Arrangement Fee
A fee charged by the lender for setting up a loan facility, typically expressed as a percentage of the gross loan amount.
Further reading
Guides that touch this term.
Guide
Development Finance vs Bridging Loans: Which Do You Need?
Two of the most common short-term property finance products, but they serve very different purposes. We break down the rates, terms, and scenarios where each makes sense.
8 min read readReadGuide
UK Development Finance Market 2026: Rates, Trends and Outlook
A comprehensive overview of the UK development finance market in 2026, covering current interest rates, lender appetite, emerging trends, and what developers should expect over the coming 12 months.
9 min read readReadGuide
How Does Development Finance Work? A Complete Guide for UK Developers
A ground-up guide to how development finance is structured in the UK, covering loan mechanics, drawdown schedules, monitoring surveyors, and what lenders look for in your application.
5 min read readRead
Where it shows up
Finance products using this term.
Service
Development Finance
Senior debt funding for ground-up residential and commercial developments.
From 6.5% p.a. · Up to 65-70% LTGDVReadService
Bridging Loans
Short-term finance for acquisitions, auction purchases and time-sensitive deals.
From 0.55% p.m. · Up to 75% LTVReadService
Commercial Mortgages
Long-term finance for commercial property acquisition and refinancing.
From 5.5% p.a. · Up to 75% LTVRead
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