Bridging loan rates: what you could pay in 2026

Bridging loan rates in the UK are quoted monthly, not annually, and in 2026 they typically range from 0.83% to 1.5%+ a month depending on your loan-to-value (LTV), property type and exit strategy. Most mainstream deals fall between 0.95% and 1.25% a month, roughly 11% to 15% a year annualised.

That looks steep next to a mortgage, until you remember it's covering a few months rather than a few decades, and it's usually the thing standing between you and a deal you can't afford to lose, whether that's an auction lot, a broken chain, or premises you need before your current one sells. The rate is also only part of the cost. Arrangement fees, valuation and legal costs, and how the interest itself is charged, monthly, rolled up, or retained, all change what you actually pay. This guide breaks down rates by LTV band, works through real examples with every fee included, and names lenders worth comparing.

Average bridging loan rates by LTV in 2026

Loan-to-value, or LTV, tells you how much you are borrowing compared with how much the property is worth. For example, if you borrow £700,000 against a property worth £1,000,000, the LTV is 70%. It is the single biggest driver of your rate, because a lower LTV usually means lower risk for the lender and sharper pricing for the borrower. The table below shows where pricing sits across the market right now, with the annual equivalent shown for comparison only, since bridging is priced and thought about in months, not years.

How bridging loan interest is actually charged

Beyond the headline monthly rate, lenders structure how you pay that interest in one of three ways, and this materially changes your cash flow and total cost.

• Serviced interest: you pay the interest monthly, like a normal loan repayment. The balance you owe stays flat, so this is usually the cheapest option overall, but only works if the property or your business is generating enough income to cover it each month.

• Rolled-up interest: interest is added to the loan balance every month and the whole amount, capital plus all the accumulated interest, is repaid at the end. No monthly payments are required, which suits refurbishment projects where the property isn't earning anything yet, but you end up paying interest on a growing balance, so the total cost is higher.

• Retained interest: the lender works out an estimated number of months of interest upfront and deducts it from the amount you actually receive, even though you owe the full loan amount. If you repay early, some lenders refund the unused portion and some don't, so it's worth checking before you sign.

Some lenders offer a rolled-up option with no exit fees or early redemption charges, which is worth asking about if you're not sure how long the loan will run for.

What else affects the bridging loan rate you're offered?

LTV sets the band you land in, but several other factors decide where you sit within it:

• Exit strategy: a confirmed sale with exchanged contracts, or a signed mortgage offer, gets you a better rate than a vague plan to "sell or refinance at some point." Lenders price the certainty of your exit, not just the property.

• Property type: standard residential or commercial property is priced more cheaply than HMOs, semi-commercial units, land, or anything needing significant work before it can be mortgaged conventionally.

• First charge vs second charge: a first charge loan, where the lender has the primary claim on the property, is priced lower than a second charge loan sitting behind an existing mortgage. Second charge bridging typically runs 0.1% to 0.3% a month higher, since the lender is second in line if something goes wrong.

• Open vs closed loans: a closed bridge has a fixed, evidenced repayment date and is usually priced around 0.1% to 0.2% a month cheaper than an open bridge, where the exact exit date isn't confirmed yet.

• Regulated vs unregulated: bridging secured against a property you or a family member lives in falls under FCA regulation and tends to price slightly higher, reflecting the extra affordability checks involved. Unregulated bridging, covering investment, commercial and development deals, moves faster and often prices more sharply at lower LTVs.

• Loan size: larger loans, generally above £500,000, often attract sharper pricing because lenders can spread their fixed costs across a bigger facility.

• Credit profile: bridging is secured against the property first and foremost, so lenders are more flexible on credit than mainstream mortgage lenders. A CCJ or missed payment won't automatically rule you out, but it will usually push you into a higher rate band. It's worth checking the CCJ register before you apply so there are no surprises.

What fees sit on top of your bridging loan rate?

The monthly rate is never the whole story. Here's what else you'll typically pay.

Not every lender charges every fee. LendInvest, for example, doesn't charge exit fees on its bridging products. Always ask for a full cost breakdown rather than comparing lenders on the monthly rate alone.

Real worked examples: what a bridging loan actually costs

These three examples show how the rate, term and fees combine into a total cost, using typical scenarios at different loan sizes and LTVs.

Example 1: Buying at auction

Loan: £180,000 | Property value: £300,000 | LTV: 60% | Rate: 0.95% a month | Term: 6 months | Structure: Serviced

• Monthly interest: £1,710

• Total interest over 6 months: £10,260

• Arrangement fee (2%): £3,600

• Legal and valuation: £1,500

• Total cost: £15,360 (8.5% of the loan)

Example 2: Refurbishment before remortgaging

Loan: £320,000 | Property value: £550,000 (post refurbishment) | LTV: 58% on end value, around 70% on purchase price | Rate: 1.15% a month | Term: 9 months | Structure: Rolled-up

• Interest accrued over 9 months: £33,120

• Arrangement fee (2%): £6,400

• Legal and valuation: £2,000

• Total cost: £41,520 (13.0% of the loan)

In these examples, exiting earlier than planned reduces the interest owed (since it accrues monthly), but fees and legal costs stay largely fixed, so shorter isn't always proportionally cheaper. You can use our business loan calculator to work out how much your bridging loan could cost based on different scenarios. 

Why the lowest rate isn't always the cheapest deal with a bridging loan

Because arrangement fees are charged on the loan amount rather than the interest, a lower monthly rate with a high fee can cost more than a slightly higher rate with a low one. Here's a real comparison on the same £300,000 loan over 8 months.

Lender B has the higher headline rate but works out £600 cheaper overall. The crossover point shifts depending on how long the loan runs, which is exactly why you should always ask for the total cost over your expected term, not just the rate on the illustration.

Real lenders to compare for a bridging loan

Rather than approaching lenders individually, most businesses use a broker or panel to compare several at once, since pricing and appetite vary significantly by lender. Here are examples of specialist bridging lenders available through Capitalise's panel, each suited to slightly different situations.

No single lender is cheapest for every deal. The lender most likely to offer you a competitive rate depends on your LTV, property type and exit strategy, which is why comparing more than one matters more than chasing a single advertised "from" rate.

Bridging loan rates vs other property finance

The Bank of England base rate has sat at 3.75% through mid 2026, after being cut from 4% in December 2025. It influences the cost of funds for lenders generally, but bridging pricing is driven far more by LTV, exit strategy and property type than by base rate movements alone.

How to get the best bridging loan rate

A few practical steps can move you into a cheaper rate band before you even approach a lender:

1. Get your LTV as low as you can: even a modestly larger deposit or extra equity can move you into a cheaper rate band, particularly around the 60% and 75% thresholds.

2. Have your exit ready to evidence: a signed sale agreement, a mortgage offer in principle, or proof of incoming funds all strengthen your case and support a lower rate than a plan you can't yet prove.

3. Check your credit position first: check your credit profile clear up errors before applying, since adverse credit pushes you into a higher rate band even on an otherwise strong deal.

4. Compare more than one lender: pricing for the same deal can vary by 0.3% to 0.5% a month between lenders, which adds up to thousands of pounds on a typical loan.

5. Ask for the total cost, not just the rate: request a full breakdown of arrangement, valuation, legal, exit and admin fees, and compare the total cost over your realistic timeline, not the best-case scenario.

6. Be realistic about your term: asking for 12 months when you expect to exit in 5 signals uncertainty to a lender. A shorter, more accurate term can support a better rate.

Common mistakes when comparing bridging loan rates

A handful of habits consistently cost borrowers more than they need to pay:

• Comparing the monthly rate alone without factoring in arrangement, valuation, legal and exit fees

• Underestimating how long the loan will actually run for, which changes the true cost significantly

• Not having a firm, evidenced exit strategy in place before applying, which pushes you into a higher rate band

• Overlooking whether the loan is first or second charge, which materially affects the rate on offer

• Requesting a longer term than you realistically need, which can make the deal look riskier than it is

• Assuming the lowest advertised rate applies to your deal, when "from" rates are usually reserved for the very best cases

How Capitalise helps you find the right bridging loan rate

Capitalise gives you access to a panel of specialist bridging lenders, including Kuflink, Together, LendInvest and Fiduciam, so instead of approaching lenders one at a time, our funding specialists match your deal, your LTV, property type and exit strategy, to the lenders most likely to offer competitive terms. Funds can typically be arranged within a few days, and lenders on our panel can pre-approve a bridging loan within 24 to 48 hours, so you're not left waiting while an opportunity, such as an auction purchase, slips away. 

Frequently asked questions

What is a good bridging loan rate in the UK right now? Anything from 0.83% to 0.95% a month is considered a strong rate in 2026, typically reserved for LTVs at or below 60% with a first charge and a confirmed exit strategy. Most mainstream deals sit between 0.95% and 1.25% a month, and anything above 1.5% reflects higher risk, such as high LTV or adverse credit.

Are bridging loan rates monthly or annual? Bridging loan rates are almost always quoted monthly, unlike mortgages or standard business loans, which are quoted annually. A monthly rate of 1%, for example, works out at roughly 12% a year, which looks high next to a mortgage but reflects the fact that bridging is designed to run for months, not decades.

What's the difference between rolled-up, retained and serviced interest? Serviced interest is paid monthly, so the loan balance stays flat and total cost is usually lowest. Rolled-up interest is added to the balance each month and settled in full when the loan is repaid, suiting properties that aren't yet earning income. Retained interest is deducted from your loan advance upfront based on an estimated term, meaning you receive less cash but still owe the full loan amount.

Is the lowest rate always the cheapest deal? No. Arrangement fees are charged on the loan amount, not the interest, so a lower rate with a high fee can cost more overall than a slightly higher rate with a low fee, particularly on shorter terms. Always compare total cost over your expected term rather than the headline rate alone.

Do first charge and second charge bridging loans have different rates? Yes. First charge loans, where the lender has the primary claim on the property, are priced lower because the lender takes on less risk. Second charge loans, which sit behind an existing mortgage, typically cost 0.1% to 0.3% a month more.

Are regulated bridging loans priced differently to unregulated ones? Generally, yes. Regulated bridging, used when the loan is secured against a property you or a family member lives in, involves extra FCA affordability checks and tends to price slightly higher than unregulated bridging used for investment, commercial or development purposes.

Can I get a bridging loan with bad credit, and what rate would I pay? Often, yes, since bridging is secured against the property rather than assessed mainly on income. A CCJ or missed payment is unlikely to rule you out entirely, but it will usually push your rate into a higher band, commonly 1.3% to 1.75% a month, rather than closing off bridging finance altogether.

Why are bridging loan rates higher than mortgage rates? Bridging loans are priced for speed and short term risk rather than long term stability. Lenders can approve and release funds within days rather than weeks, and they're pricing a loan they expect to be repaid quickly, which shows up as a higher monthly rate compared with a mortgage spread over many years.

What happens to my rate if I need to extend the loan? Extensions are usually possible but come at a cost. You'll pay interest for the extended period, potentially at a new rate if pricing has moved since your original loan was arranged, and some lenders charge an extension fee on top. It's worth building two to three months of contingency into your original term where possible.

Compare bridging loan rates today

The right bridging loan rate depends on your LTV, your exit strategy, the lender you approach, and how the interest and fees are structured, which is why comparing more than one offer matters. Sign up to Capitalise for free to compare bridging finance lenders from our panel and find the most competitive rate for your business.