Bridging Loan Calculator — City of London

Understanding Bridging Loan Costs in the City of London

Bridging loans are a vital tool for property investors and developers operating in the City of London. These short-term financing solutions provide the speed and flexibility needed to capitalise on time-sensitive opportunities in one of the world's most competitive property markets. Whether you are purchasing a property at auction, breaking a chain, or funding a light refurbishment project, understanding the true cost of a bridging loan is essential for making informed investment decisions.

The total cost of a bridging loan is made up of several components. The primary cost is the interest, typically charged at a monthly rate between 0.40% and 1.50%. The rate you are offered depends on factors including the loan-to-value ratio, the property type and location, your exit strategy, and your experience as a borrower. Properties in prime City of London locations often attract more competitive rates due to the strong underlying asset values and deep buyer demand.

In addition to interest, most bridging lenders charge an arrangement fee of 1-2% of the gross loan amount. Some lenders also charge a valuation fee, legal fees, and potentially an exit fee. Our calculator above focuses on the two main cost components, interest and arrangement fee, to give you a clear picture of the likely total cost. When comparing quotes from different lenders, always look at the total cost of borrowing rather than just the headline interest rate, as a lower rate with higher fees may end up costing more overall.

Use our bridging loan calculator to model different scenarios and understand how changes in term length, interest rate, and arrangement fee affect the overall cost. Once you have an idea of the numbers, contact our team for a personalised quote from our panel of specialist bridging lenders with access to competitive terms for City of London properties.