Bridging Loan Rates in 2026

Bridging loan rates are quoted by the month, and that single fact catches out more borrowers than any other. A 0.88 percent rate looks small next to a mortgage until you remember it is charged every month, not every year. On the 2025 market average of 0.88 percent a month, the industry benchmark that 2026 opens from, a full twelve-month term works out at around 10.56 percent of the loan before any fees (Bridging Trends, 2025). Prime cases with low leverage and clean first-charge security price from around 0.5 percent a month (Bridging Trends, 2025), while higher leverage, second-charge or complex cases sit above the average. Understanding what moves a bridge along that range, and what sits on top of the rate, is the difference between a quote you can trust and a headline number that flatters the real cost.

A note on who we are before the detail. We are a finance arranger and introducer, not a lender. We are not authorised by the FCA, and bridging outside the regulated mortgage perimeter is unregulated commercial lending. Where a loan is secured on the borrower’s own home it is a regulated case and we refer it to an authorised firm. Every figure here is indicative market data, never our pricing and never an offer.

What sits behind the rate

The same property can attract different rates from different lenders on the same day, and the drivers are consistent enough to plan around. Loan to value comes first: a case at the lower end of the range prices more keenly than one pushed toward the ceiling, because the lender’s exposure against the security is smaller. The market average sits at 60 percent, with first-charge cases running 55 to 75 percent (Bridging Trends, 2025), and where a borrower sits in that band shapes the rate directly. Charge position is next. A clean first charge, where the bridge is the only or senior debt, is cheaper than a second charge sitting behind an existing mortgage, because the second-charge lender recovers only after the first has been repaid. Property condition matters, since a lender is quicker and cheaper on standard, saleable stock than on something uninhabitable or non-standard. The strength of the exit carries real weight, because a confirmed sale or a mortgage offer in principle turns a projected repayment into a demonstrated one. And the borrower profile, the track record and the credit history, moves both the rate and the choice of lender. Adverse credit does not automatically disqualify a case, but it does lift the price.

The full cost stack

The monthly rate is only the first line of the bill. The arrangement fee comes from the lender and typically runs 1 to 2 percent of the gross loan, deducted from the advance rather than paid separately. A RICS valuation fee scales with the value and location of the property. Legal fees apply on both sides, the borrower’s own solicitor and the lender’s, since the lender’s legal costs are usually passed on. Some lenders charge an exit fee on redemption, often set as a percentage of the loan or of the value, though plenty charge none at all, so it is a point to check on every quote rather than assume. Where the case comes through an introducer there may be a broker fee, which should be disclosed up front. On a second charge there is also the cost of obtaining the first lender’s consent. None of these is hidden, but a borrower comparing only the monthly percentage can be surprised by the total, which is why the honest comparison is always the whole cost across the expected term.

The monthly rate is the number everyone quotes, but the cost of a bridge is the whole stack, and two loans at the same 0.88 percent can land in very different places once the fees and the interest method are counted.

Rolled, retained or serviced

There are three ways to handle the interest, and the choice changes both the cash flow and the net loan. Retained interest is deducted from the gross facility at the outset: the lender holds back the interest for the expected term so there is nothing to pay during the loan, but the net amount reaching the borrower is smaller. Rolled-up interest is added to the balance each month and settled in full on redemption, so again there are no monthly payments, but the debt grows over the term. Serviced interest is paid monthly in cash, which keeps the balance flat and the net loan higher, but it requires the borrower to fund those payments from income or rent. Most bridges are retained or rolled up precisely because the borrower does not want a monthly drain while the exit is pending. The right choice depends on whether cash flow or net advance matters more to the case.

A worked illustration

Take a gross bridging loan of £200,000 at the 2025 market average of 0.88 percent a month (Bridging Trends, 2025). The monthly interest is around £1,760, so a full twelve-month term carries roughly £21,120 of interest, though most bridges are repaid before the full term, which lowers the actual cost. Add an arrangement fee at 1.5 percent, around £3,000, plus a RICS valuation and legal fees on both sides. On a retained-interest structure the lender holds back the twelve months of interest and the fees from the £200,000, so the net advance reaching the borrower is meaningfully below the gross figure, which is exactly why we model the gross-to-net on every case before it goes to a lender. On a prime, low leverage case pricing nearer 0.5 percent a month (Bridging Trends, 2025), the same £200,000 would carry around £1,000 of monthly interest instead, showing how far the rate range moves the total. These figures are illustrative market arithmetic, not a quote, and every real case turns on its own leverage, term and exit.

Regulated and unregulated pricing

Roughly 45 percent of the bridging market is regulated, with the balance unregulated (Bridging Trends, 2025). Regulated bridging, secured on a home the borrower or a close family member occupies, sits inside the FCA mortgage perimeter and carries the consumer protections and advice requirements that come with it. That regulatory overhead, and the different risk profile of owner-occupier cases, can shape pricing and process, and these cases are placed with authorised firms rather than arranged by an introducer like us. Unregulated bridging, secured on investment or commercial property, is where the bulk of investor and developer activity sits, and it is priced purely on the security, the leverage and the exit. The base rate underpins both: with the Bank of England rate held at 3.75 percent since December 2025 (Bank of England), the floor under the cost of money has been steady through the first half of 2026, which has helped keep quotes stable across the market.

How to compare quotes

The trap in comparing bridging quotes is reading only the monthly rate. A loan at 0.75 percent with a 2 percent arrangement fee and an exit fee can cost more over a short term than one at 0.88 percent with a 1 percent fee and no exit charge. The comparison that matters is the total cost across the realistic term, net advance included, not the headline percentage. Ask every lender for the same things: the monthly rate, the interest method, the arrangement fee, whether there is an exit fee, the valuation and legal costs, and the net loan that actually reaches you. Line those up side by side and the cheapest headline rate is often not the cheapest deal. This is much of the value an introducer adds, running a short competitive process and presenting the true cost stack rather than the flattering front number. You can read more about what a bridging loan costs and how the pieces fit together before you commit to anything.

FAQ

What is the average bridging loan rate in 2026? The 2025 market average is 0.88 percent a month, the level 2026 opens from, with prime low leverage first-charge cases from around 0.5 percent (Bridging Trends, 2025). Rates are quoted monthly, not annually. These are indicative market figures, not our pricing and not an offer.

How much does a bridging loan cost in total? Beyond the monthly interest, expect an arrangement fee of typically 1 to 2 percent of the gross loan, a RICS valuation, legal fees on both sides, sometimes an exit fee, and on a second charge the cost of the first lender’s consent. The right comparison is total cost across the expected term.

Why is my quote higher than 0.88 percent? Because 0.88 percent is a market average (Bridging Trends, 2025). Higher leverage, a second charge, non-standard security, a weaker exit or adverse credit all push a case above the average, just as a prime, low leverage case can price below it.

Should I service the interest or roll it up? Serviced interest keeps the balance flat and the net loan higher but needs monthly cash. Retained or rolled-up interest means no monthly payments but a smaller net advance or a growing balance. The choice depends on whether cash flow or net advance matters more to your case.

Talk to us

If you want the real cost of a bridge rather than the headline rate, the fastest route is to put the case in front of us. We can model the whole stack and run a short competitive process. Read more about bridging loan rates or compare bridging finance for your situation.

All figures in this article are indicative market commentary for UK property in 2026, not an offer or a quote, and any facility is subject to lender terms and full underwriting. This article was written by Matt Lenzie.