UK Bridging Loan Rates 2026: Monthly Cost, Fees, and LTV Bands

UK bridging loans are quoted on a monthly basis rather than an annualised basis, reflecting the short-term nature of the product (typically 1-24 months) and the way bridging lenders fund their loan books. A bridging rate of 0.75% per calendar month is approximately equivalent to a 9% annualised rate, but the comparison is not exact because monthly bridging interest is typically rolled up rather than serviced.

Rolled-up interest is added to the loan balance each month rather than paid out of cash flow. This compounds at the contractual rate, so a 12-month bridge at 1% per month against an initial loan of £1,000,000 would roll up to approximately £1,127,000 at month 12, not the £1,120,000 a simple-interest calculation would suggest. For development bridging - where the loan is in place for 12-18 months and the borrower has no cash flow to service interest until exit - this compounding is a meaningful element of total cost.

Some bridging lenders offer serviced (monthly-paid) interest as well as or instead of rolled-up structures, particularly on regulated bridging loans and on larger commercial bridging deals where the borrower has serviceable income. Serviced bridging is typically priced 5-15 basis points per month lower than the equivalent rolled-up product, because the lender takes less cumulative risk on the loan.

Bridging loan rates in May 2026 vary primarily by LTV, with the lowest rates available at 50-60% LTV and rates increasing materially through the 65-75% LTV bands. The market has stabilised through 2025 and into 2026 following the volatility of 2022-2023, with most specialist bridging lenders now pricing in line with the swap curve and their own funding costs rather than offering deeply variable case-by-case terms.

Indicative ranges for May 2026 - subject to lender, borrower profile, and security type:

These ranges apply to vanilla unregulated bridging on standard residential or mixed-use property. Specialist scenarios - pre-planning, heavy refurbishment, complex title, listed buildings, non-standard construction - typically price at the upper end of the relevant LTV band or above. Specialist scenarios are not always quoted off the standard rate card and are usually priced on a case-by-case basis after a lender review.

Consider a £750,000 unregulated bridging loan against a development site valued at £1,100,000 (68% LTV) for a 12-month term, with rolled-up interest at 0.85% per month. The arrangement fee is 2% (£15,000) added to the loan balance at drawdown; the exit fee is 1% (£7,500) of the original loan amount payable at redemption. Valuation and legal fees of £3,500 are paid upfront and are not added to the loan.

Day-one loan balance after the arrangement fee is added: £765,000. Interest at 0.85% per month rolled up over 12 months produces a redemption balance of approximately £846,000 before the exit fee. Adding the £7,500 exit fee gives a total redemption of approximately £853,500. Total cost of the bridge over 12 months is £103,500 of interest and fees on the £750,000 advanced — an effective total cost of 13.8% of the loan amount, not the 10.2% suggested by the headline monthly rate.

Now stress the example. If the exit slips by three months — a common occurrence on development sites where planning or refurbishment runs long — the loan balance continues to roll up at 0.85% per month for the extension period. Three extra months of rolled-up interest at that rate adds approximately £22,000 to the redemption figure. The total cost of the bridge over 15 months becomes approximately £125,500 — an effective cost of 16.7% of the original loan. We have seen developers underestimate this exit-slip impact repeatedly and we always model both base-case and stressed-exit scenarios before recommending a bridge.

Some lenders offer an extension fee model rather than continuing to charge full rolled-up interest on overruns, typically 0.5-1% of the loan amount for each three-month extension. For developers who anticipate a high probability of overrun, an extension-fee structure can cost less in absolute terms than continued rolled-up interest at the contractual rate.

A regulated bridging loan is one secured against a property in which the borrower or an immediate family member lives or will live (i.e. a regulated residential property). These loans fall under the Financial Conduct Authority's mortgage regulation regime and are subject to consumer protection rules, affordability assessments, and conduct-of-business requirements that materially affect the way the loan is underwritten.

Regulated bridging rates are typically 5-10 basis points per month higher than equivalent unregulated bridging rates because of the additional regulatory and operational cost the lender carries on regulated business. The rate differential is not large in headline terms but should be factored into appraisals on owner-occupier transactions. Regulated bridging is also typically capped at 75% LTV (with most lenders capping at 70%), whereas unregulated bridging can reach 80%+ on cross-collateral structures.

Unregulated bridging - secured against investment property, development sites, or commercial property - is the default for almost all property developer transactions. Construction Capital is not authorised by the Financial Conduct Authority and does not arrange regulated mortgage contracts. Our bridging work is exclusively in the unregulated space, focused on developer, investor and business-purpose transactions where regulated mortgage rules do not apply.

We always identify whether a transaction is regulated or unregulated at the very first call. The first question on any bridging enquiry should be whether the borrower or their immediate family will occupy the security property — getting this wrong exposes the borrower, the lender, and the broker to material risk, and we will not proceed with an enquiry until the position is clear.

Headline monthly interest is one of three significant cost lines in a bridging loan, alongside the arrangement fee paid at drawdown and any exit fee or extension fee charged at redemption. The all-in cost over the life of a bridge is meaningfully higher than the headline rate suggests once these fees are included.

Arrangement fees on UK bridging loans typically sit at 1.5-2.5% of the loan amount, added to the loan balance at drawdown rather than paid out of pocket. The fee covers the lender's underwriting, legal review, and credit-committee work and is non-refundable once the loan completes. Larger loans (above £2M) sometimes attract a reduced arrangement fee in the 1-1.5% range; smaller loans (sub-£250k) may carry a minimum fee in absolute terms that effectively pushes the percentage above 2.5%.

Exit fees vary by lender. Many specialist bridging lenders charge no exit fee, others charge a flat 1-1.5% of the original loan amount, and a smaller number charge a percentage of the loan balance at redemption. Exit fees are most common on lower headline-rate products and are an important part of the total cost calculation when comparing offers. Some lenders also charge an early redemption fee — typically a minimum interest period of 1-3 months — to ensure the loan generates a minimum return regardless of how quickly it is repaid.

Valuation and legal fees are paid up front rather than rolled into the loan, and typically total £1,500-£5,000 on a vanilla bridge depending on property size and complexity. Legal fees on bridging are higher than on a comparable term mortgage because the lender's solicitor reviews title, planning, and the borrower's exit evidence under a compressed timeframe — bridging completions are routinely targeted within 10-20 working days from formal application. Our true cost of development finance guide breaks down the fee structures across senior, bridging, and mezzanine in more detail.

Bridging used to complete an auction purchase within the standard 28-day completion window is structurally identical to vanilla bridging but is priced with a small premium where the lender commits to a compressed completion timetable. Many auction bridging lenders complete inside 14 days from offer; the fastest specialist lenders can complete in 7-10 days from formal application where the borrower's solicitor and the valuer are responsive. Our bridging loan auction purchases guide covers the process in detail.

The pricing premium for auction speed is typically 0.05-0.10% per month on the headline rate, plus a slightly higher arrangement fee. The premium is not large in cash terms — on a £500k bridge held for 9 months the speed premium typically translates to £2,000-£4,000 of extra cost — and is usually well worth paying when the alternative is losing the auction deposit (typically 10% of the hammer price) and the property itself.

Borrowers approaching auction without pre-arranged bridging should expect a moderately higher rate quoted post-auction. Lenders price post-auction enquiries with the urgency in mind, and the borrower has limited negotiating leverage given the 28-day clock. We always recommend agreeing in-principle terms with a lender before the auction — not after — which usually delivers a 5-10 basis point pricing benefit and considerably more certainty of completion.

Auction bridging is most often used in three scenarios: developers buying sites at auction with the intention of refinancing into development finance once planning or contractor arrangements are in place; investors buying tenanted commercial property with the intention of refinancing into a term commercial mortgage post-completion; and refurbishment investors buying short-lease or non-mortgageable property with the intention of repairing the title or condition before refinancing onto a buy-to-let mortgage. See our bridging loans service for the wider product context.

Refurbishment bridging - loans where part of the facility is held back to fund light cosmetic or "soft" structural work on the security property - is priced broadly in line with vanilla bridging, with a small adjustment for the increased risk inherent in lending against works-in-progress. Light refurbishment scenarios where the property remains habitable throughout typically price at vanilla bridging rates plus 0.05-0.10% per month. Our light vs heavy refurbishment finance guide breaks down the product structure.

Heavy refurbishment bridging - where the property is taken offline for substantial structural work, change of use, or where the works value is material relative to the property value - is priced at a meaningful premium to vanilla bridging, typically 0.10-0.25% per month above the equivalent vanilla rate. The lender's exposure is higher because the security is impaired during the works phase, and a monitoring surveyor is typically appointed to control drawdown of the works element of the facility. See our refurbishment finance vs development finance guide for where heavy refurb crosses into development finance.

The line between heavy refurbishment bridging and development finance is not always sharp. Where the works require building control sign-off and the property is being materially changed (a change of use, a new dwelling created, or a major extension), most lenders will require the loan to be structured as development finance with a monitoring surveyor in place throughout the build. The pricing implication is that development finance is typically cheaper on an annualised basis than heavy refurb bridging for the same project, but the structural and legal package is more demanding.

For borrowers comparing heavy refurb bridging against development finance, the right product depends on the works profile, the timeline, and the eventual exit. A 6-month refurbishment with a clear sale exit at the end is usually better served by heavy refurb bridging. A 14-month conversion with a refinance exit onto buy-to-let is usually better served by development finance. Our development finance vs bridging loans guide goes deeper into the trade-offs.

The most effective ways to reduce the rate quoted on a bridging loan are, in order of impact: present clear and credible exit evidence (a signed sale contract, a development finance offer letter, or a buy-to-let mortgage offer in principle), reduce the LTV by injecting more equity, choose vanilla security over complex title, and approach the right lender on day one rather than going to market in a panic.

Exit evidence is the single most important factor in pricing. Bridging lenders price the risk of the loan being unable to redeem at the contractual end date, and any evidence that the exit is contractually secured allows the lender to compress the risk premium. A non-binding marketing brochure is not exit evidence; a signed sale contract or a development finance offer letter is. The strongest pricing in the bridging market is reserved for cases with documented, near-certain exits in place at the point of drawdown.

Reducing the LTV is the second most powerful lever. A 70% LTV bridge typically prices 10-25 basis points per month above a 60% LTV bridge from the same lender against the same security. For a 12-month £1M bridge, the difference between 60% and 70% LTV pricing typically translates to £12,000-£30,000 of additional interest over the life of the loan. Where the borrower has the capacity to inject more equity, the cash-flow benefit usually justifies the lower headline rate.

Approaching the right lender on day one is the most often-missed lever. Bridging is a fast-moving market where lender appetite shifts week to week — a lender pricing aggressively in February may be uncompetitive by April, and vice versa. We track lender appetite weekly across our panel and direct each enquiry to the lenders currently most likely to win the deal at the best terms. For a live indication on a specific bridging requirement, submit your scheme through our deal room and we will revert with indicative pricing within one working day.