What is the difference between Retained and Rolled-Up bridging interest?

With retained interest, the total interest for the agreed loan term is calculated upfront and deducted from the gross facility, meaning your net cash in hand is lower, but you make zero monthly payments. With rolled-up interest, monthly interest accrues onto the principal loan balance and is repaid as a lump sum upon exit.

What are typical UK bridging loan interest rates and fees?

UK bridging loan interest rates typically range from 0.55% to 1.25% per month (approx. 6.8% to 16% APR). Standard lender arrangement fees are 1% to 2% of the gross loan amount, alongside legal and valuation fees.

🌉 COMMERCIAL AUCTION & PROPERTY DEVELOPMENT FINANCE

UK Bridging Loan & Auction Finance Calculator

Accurately model short-term bridging finance for property flips, refurbishments, and auction purchases. Compares Retained Interest, Rolled-Up Interest, and Serviced Monthly Interest to calculate net cash in hand and total exit redemption.

⚙️ Loan & Property Details

Property Market Value / Purchase Price £300,000

Loan-to-Value (LTV %) 70% (£210,000)

40% LTV 65% LTV 75% Max Standard 80% Specialist

Loan Term 12 Months

3 mos (Auction) 6 mos (Flip) 12 mos (Refurb) 24 mos

Monthly Interest Rate (%) 0.75% / month

Equivalent to approx. 9.38% Annual Rate

Interest Payment Structure

Lender & Broker Fees

Arrangement Fee (%)

Broker Fee (£)

Legal & Valuation (£)

Exit Fee (%)

Net Cash Advanced (Cash in Hand) RETAINED INTEREST

£183,405

From a gross facility of £210,000, you receive £183,405 after interest retention and lender arrangement fees.

Total Interest Cost £18,900

Redemption Total £210,000

All-In Borrowing Cost £26,595

💵 Bridging Facility Cashflow Breakdown Completion Statement

Gross Loan Facility (70% LTV): £210,000

Lender Facility Fee (2.0%): -£4,200

Broker, Legal & Valuation Fees: -£3,495

Retained Interest (12 mos @ 0.75%): -£18,900

Net Completion Advance: £183,405

📊 Comparison Across 3 Payment Structures At Current Terms

Structure	Net Cash in Hand	Monthly Outflow	Repayment at Exit
Retained Interest	£183,405	£0 / month	£210,000
Rolled-Up Interest	£202,305	£0 / month	£229,692
Serviced Monthly	£202,305	£1,575 / mo	£210,000

Recent Calculations

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How UK Bridging Finance Works for Property Investors

A bridging loan is a short-term secured property loan used to bridge a temporary financial gap—most commonly when purchasing an unmortgageable property at an auction (with a strict 28-day completion deadline), refurbishing a dilapidated house (BRRR strategy), or buying a new home before the current one sells.

Lenders calculate interest on a monthly rate (e.g. 0.75% per month) rather than an annual percentage rate (APR), because loans are typically redeemed within 6 to 12 months.

1. Retained Interest Interest for the full term is deducted from your advance on Day 1. Zero monthly payments.

2. Rolled-Up Interest Interest compounds each month onto the loan debt. Full debt + interest settled upon exit.

3. Serviced Monthly Borrower proves income to service interest payments each month, maximizing net advance.

Frequently Asked Questions

What happens if I redeem my bridging loan early?

Most reputable UK bridging lenders operate with a minimum interest period (typically 1 to 3 months). If you exit in month 5 of a 12-month retained facility, the unused 7 months of retained interest are refunded directly to you upon redemption.

What is an exit strategy and why do lenders require it?

An exit strategy is your verified legal plan to repay the capital debt. Common exits include selling the renovated property on the open market or refinancing onto a long-term Buy-to-Let mortgage or commercial facility. Without a credible exit strategy, bridging finance cannot be sanctioned.