Glossary definition
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. Rolled up interest is standard on development finance and common on bridging loans, meaning the total interest cost is repaid along with the principal when the loan is redeemed.
Definition
An interest arrangement where monthly interest charges are added to the outstanding loan balance rather than being paid by the borrower each month. Rolled up interest is standard on development finance and common on bridging loans, meaning the total interest cost is repaid along with the principal when the loan is redeemed. This preserves the developer's cash flow during construction but increases the total loan balance over time.
See also
Closely related terms.
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.
Facility Agreement
The legal contract between a borrower and a lender that sets out all terms and conditions of the loan including the facility amount, interest rate, drawdown mechanics, repayment terms, covenants, and events of default.
Further reading
Guides that touch this term.
Guide
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 readReadGuide
Using a Bridging Loan to Buy at Auction: A Step-by-Step Guide
Buying at auction requires completing within 28 days. Bridging loans are the go-to funding solution. This guide covers how to get pre-approved, what it costs, and how to plan your exit.
4 min read readReadGuide
Hidden Arrangement Fees in Development Finance: What Lenders Don't Tell You
Arrangement fees in development finance are rarely as straightforward as a single percentage. This guide exposes the hidden layers of fees that lenders charge and shows you how to negotiate effectively.
9 min read readReadGuide
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 readRead
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