Klarefi

Bridging loan calculator

A bridging loan costs the interest, the arrangement fee, the exit fee and any other costs. Enter the loan, the term, the monthly rate and the fees to see the total cost, the amount due at exit and the loan to value. The result is an estimate, not an offer.

Free for lenders. Amounts in pounds, rates per month, and nothing leaves your browser.

Bridging loan calculatorStays in your browser

Used for the loan to value

The loan amount is

Gross is the amount borrowed. Net is what arrives

The net or gross loan you chose above

In months

For example 0.85

Interest treatment

How the interest is charged

A percentage of the gross loan

A percentage of the gross loan

Valuation and legal costs. Added to the total cost only

Enter the property value, the loan, the term and the monthly rate, or fill in the example, to see the cost.

This is an estimate, not an offer. A lender's own terms decide the real figures.

The calculator needs the loan, the property value and the fees. Klarefi collects those from the applicant with the documents behind them, and links every figure to its source. Whether to lend stays with your credit team.

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How we count the loan.

The gross loan is the amount borrowed before any deductions. The arrangement fee and the exit fee are each a percentage of the gross loan. The net loan is what the borrower receives on day one.

Other costs are the valuation and legal costs the borrower pays. We add them to the total cost and leave them out of the loan.

This is one common way to count. Lenders differ, so check how yours sets the fees and the interest.

How the numbers are worked out.

  1. Retained interest

    The lender takes the arrangement fee and the interest for the whole term off the loan on day one. The gross loan is the net loan divided by (1 minus the arrangement fee minus the monthly rate times the months). Interest is the gross loan times the rate times the months. The borrower pays nothing each month and repays the gross loan plus the exit fee at the end.

  2. Rolled-up interest

    Only the arrangement fee comes off the loan, so the gross loan is the net loan divided by (1 minus the arrangement fee). The interest builds up and is paid at the end. Simple interest is the gross loan times the rate times the months. Compound interest is the gross loan times ((1 plus the rate) to the power of the months, minus 1). The borrower repays the gross loan, the interest and the exit fee.

  3. Serviced interest

    Again only the arrangement fee comes off the loan. The borrower pays interest every month, which is the gross loan times the monthly rate. The total interest is that payment times the months. At the end the borrower repays the gross loan plus the exit fee.

  4. Total cost and loan to value

    The total cost is the arrangement fee, the interest, the exit fee and the other costs. The loan to value on day one is the gross loan divided by the property value. With rolled-up interest we also show the loan to value at exit, which is the gross loan plus the interest, divided by the property value.

What a calculator cannot tell you.

  • Whether the property value comes from a proper valuation, and how long a sale would take.
  • Whether the exit route is likely to work, such as a sale or a refinance.
  • Extra charges in the facility letter, such as default interest, extension fees and early repayment charges.
  • Whether the figures the borrower gave match their documents.

Those take the valuation, the exit evidence and the borrower's documents read together. That is the work Klarefi does during the application. Your credit team still makes the decision.

Questions about bridging loan costs.

  • How much does a £200,000 bridging loan cost?

    It depends on the rate, the term and the fees. As an example, take a £200,000 gross loan for 12 months at 0.85% a month, with a 2% arrangement fee and a 1% exit fee. The interest is £20,400, the arrangement fee is £4,000 and the exit fee is £2,000. That is £26,400 in total, before valuation and legal costs. With retained interest the borrower would receive £175,600 on day one. These rates are examples, not a quote.

  • What is the difference between a gross and a net bridging loan?

    The gross loan is the amount borrowed before any deductions. The net loan is what the borrower receives on day one, after the arrangement fee and any retained interest come off. The interest and the fees are worked out on the gross loan.

  • What do retained, rolled-up and serviced interest mean?

    With retained interest, the lender holds back the interest for the whole term from the loan. With rolled-up interest, the interest is added to the balance and paid at the end. With serviced interest, the borrower pays the interest every month.

  • How long do you have to pay off a bridging loan?

    A bridging loan is short term. The loan agreement sets the term, and the borrower usually repays the whole loan at the end from a sale or a refinance. Ask the lender what happens if the exit is late, because extension fees and higher interest can apply.

  • Is this calculator an offer?

    No. It gives an estimate from the figures you enter. A lender's own terms, valuation and checks decide the real numbers.

Related.

A case file ready for your credit team.

The form says turnover was 2.4 million. The annual accounts say 2.18 million. Klarefi reads the application, the accounts and the bank statements together, asks the applicant about the difference while they are still applying, and adds the answer to the file.

Book a 15-minute callBuild your loan application

Free to start. Data stored in the EU by default.

  1. Send applicants one link

    They upload the accounts, the bank statements and the rest of your list, from any device.

  2. Klarefi checks each application

    It reads every document, compares the numbers, and asks the applicant in a chat for anything missing or unclear.

  3. Your credit team reviews one file

    Every number links to the line it came from. Anything still open stays visible for review.