Bridging loan calculator
Estimate the monthly interest, total interest, arrangement fee and net day one advance on a warehouse or commercial bridge.
Your estimate
Illustrative only. Not a quote or advice. Not an offer of finance.
How the bridging loan calculator works
Bridging is priced monthly, so we start with the monthly interest, which is the gross loan multiplied by the monthly rate. The total interest is that figure multiplied by the term in months. The arrangement fee is the gross loan multiplied by the fee percentage. We then build the total to repay and the net advance differently depending on whether interest is rolled or serviced.
With rolled interest the total to repay is the gross loan plus the total interest plus the fee, and the net advance is the gross loan minus the total interest and the fee, because both are retained up front. With serviced interest you pay the monthly interest as you go, so the total to repay is the gross loan plus the fee, and the net advance is the gross loan minus the fee only.
Rolled versus serviced interest
Rolled, or retained, interest means nothing to pay each month, which suits a project with no income during the works, but it reduces the day one advance and raises the redemption figure. Serviced interest keeps the loan smaller and the redemption lower, but you need monthly cash flow to cover it. The right choice depends on whether the warehouse produces income during the bridge. Once you have an exit lined up, our commercial mortgage calculator helps model the term loan you refinance onto.
Worked example
On a 500,000 pound bridge at 0.85 percent a month over nine months with a 2 percent fee, the monthly interest is 4,250 pounds, the total interest is 38,250 pounds and the fee is 10,000 pounds. On rolled interest the total to repay is 548,250 pounds and the net day one advance is 451,750 pounds. On serviced interest the total to repay is 510,000 pounds and the net advance is 490,000 pounds.
Bridging loan calculator: common questions
What does a bridging loan on a warehouse cost?
Bridging is priced per month, often around 0.75 to 1 percent, plus an arrangement fee of about 2 percent. On a 500,000 pound bridge at 0.85 percent a month over nine months, the interest is roughly 38,000 pounds and the fee about 10,000 pounds. Enter your figures above to see the total to repay and the net advance.
What is the difference between rolled and serviced interest?
With rolled, sometimes called retained, interest the monthly cost is added to the loan and paid at the end, so there is nothing to pay each month but the total to repay is higher. With serviced interest you pay the monthly interest as you go, so the day one advance is larger and the redemption figure is lower. Toggle between them above to compare.
When would I use a bridge on a commercial property?
Bridging suits a fast purchase at auction, a unit that needs work before it can be let or refinanced, or a chain that has to complete quickly. It is short term and more expensive than a commercial mortgage, so the exit, usually a sale or a refinance onto a term loan, matters as much as the rate. Send us the plan and we will sense check the exit.
Need a bridge on a warehouse?
Send us the deal and the exit and we will come back with a view on fundability and likely terms within one working day.