Glossary definition
Serviced Interest
An interest arrangement where the borrower makes regular monthly interest payments throughout the loan term, keeping the outstanding loan balance static. Serviced interest is more common on commercial mortgages and longer-term investment loans than on development finance.
Definition
An interest arrangement where the borrower makes regular monthly interest payments throughout the loan term, keeping the outstanding loan balance static. Serviced interest is more common on commercial mortgages and longer-term investment loans than on development finance. Some bridging lenders offer a choice between serviced and rolled up interest, with serviced interest usually attracting a lower headline rate.
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.
DSCR (Debt Service Coverage Ratio)
A financial metric that measures the ability of a property's net operating income to cover its annual debt service obligations, calculated as net operating income divided by total debt service.
ICR (Interest Cover Ratio)
A measure of how comfortably a property's rental income covers the interest payments on a loan, calculated as annual rental income divided by annual interest costs.
Further reading
Guides that touch this term.
Guide
Commercial Mortgages in the UK: A Complete Guide
Everything you need to know about commercial mortgages in the UK - from eligibility criteria and rental coverage ratios to how lenders value multi-let properties and what lease length matters.
4 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
Bridge First, Then Development Finance: When Bridging Comes First
Some sites have to be bought before a development facility can be put in place. This guide explains when a bridge comes first, how the bridge-to-development refinance works, and what to agree with the bridging lender at the outset.
6 min read readRead
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