Bridging Loan Calculator

Bridging loans are short-term — typically up to around 12 months, sometimes longer — and priced monthly rather than annually. A 1% monthly rate annualises to about 12% on a simple basis; compounding would make the effective rate a little higher. Plus a 2% arrangement fee on day one. A 200,000 bridge at 1% per month for 6 months, 2% fee: roughly 12,000 interest and 4,000 fee — 16,000 total.

Run it with sensible defaults

Using loan amount of 200,000, monthly rate of 1%, term of 6, arrangement fee of 2%, the calculation works out to 16,000.00. The defaults are meant as a starting point, not a recommendation.

The levers in this calculation

The inputs — Loan Amount, Monthly Rate, Term, and Arrangement Fee — do not pull with equal force. Adjusting one input at a time toward extreme values shows which ones move the result most.

How the math works

Simple monthly interest (most bridge loans) plus arrangement fee. Interest accrues each month on the original loan amount and is paid at exit rather than serviced monthly; total cost is similar either way.

What the headline rate hides

Lenders quote a rate; what you pay is a blend of that rate, fees, insurance, and any early-repayment penalty built into the product. The figure here isolates the core interest cost so you can compare like-for-like across deals; fees, insurance, and other costs sit on top of that base.

What this doesn't capture

The figure shown reflects the core calculation; additional costs such as valuation, legal fees, insurance, and any early-repayment charges (where applicable) sit on top and can add materially to the total cost of borrowing. Rates and product terms can also change over the life of the loan, which can shift the picture relative to this fixed-snapshot estimate.

Worked example

Suppose you borrow 300,000 at 1.2% monthly for 9 months with a 2.5% arrangement fee:

• Arrangement fee: 300,000 × 2.5% = 7,500 (due upfront)
• Monthly interest over 9 months at 1.2% (simple) = 32,400
• Total repayment: 339,900

The arrangement fee hits your cash immediately. The interest accrues monthly on the original loan amount and is paid at exit.

When this metric matters

Bridging loans appear in property transactions where timing mismatches exist — for example, needing funds before a sale completes or before refinancing closes. The short, high-cost nature means total outlay varies sharply with term length and rate. Comparing two bridge offers requires both the headline monthly rate and the upfront fee structure.

What this illustrates and what it does not

This calculator models the core interest and fee arithmetic for a bridging loan under standard terms. It illustrates how simple monthly interest and upfront fees combine to form the total repayment amount. It does not predict actual lender pricing, model partial repayments, account for rate resets, include regulatory fees, or estimate cashflow timing. The result serves as an educational comparison tool to understand the mechanics, not as a binding quote.