Bridge Loan Calculator
Enter the loan amount, interest rate and term to see the interest-only monthly payment on a bridging loan and what it costs in total.
A bridge (or bridging) loan is short-term finance that "bridges" the gap between buying a new property and selling your old one. They're almost always interest-only: you pay the interest each month and repay the whole principal in one lump sum when your other property sells.
How bridge loan costs are calculated
Because bridge loans are interest-only, the monthly payment is just the loan multiplied by the monthly interest rate. The total cost is that interest over the term, plus any arrangement or exit fees.
Monthly payment = Loan × (annual rate ÷ 100) ÷ 12
Total interest = Monthly payment × months
Total cost = Total interest + fees
Total interest = Monthly payment × months
Total cost = Total interest + fees
| Term | Meaning |
|---|---|
| Loan amount | The principal you borrow |
| Rate | Annual interest rate (bridge rates are higher than mortgages) |
| Fees | Arrangement/exit fees as a % of the loan |
Worked example
A 200,000 bridge loan at 9% for 6 months, with 2% fees:
| Monthly = 200,000 × 0.09 ÷ 12 | 1,500 |
| Total interest = 1,500 × 6 | 9,000 |
| Fees = 200,000 × 2% | 4,000 |
| Total cost | 13,000 |
Frequently asked questions
How is a bridge loan repaid?
You usually pay interest only each month and repay the full principal in one payment when your existing property sells or you refinance. Some lenders roll the interest up instead of charging it monthly.
Why are bridge loan rates so high?
They're short-term, quick to arrange and higher risk for the lender, so rates are well above standard mortgage rates and fees are common.
What if I repay early?
Many bridge loans charge interest only for the time you use them, so repaying early can reduce the total interest. Check for any minimum term or exit fees.
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Estimates for general information only. Real bridge loans may compound interest, roll up interest, or add valuation and legal costs. Not financial advice.