Bridge cost and rolled interest calculator

How the bridge cost is built up

• Arrangement fee = net loan × fee percentage. Usually added to the loan rather than paid in cash.
• Serviced interest = net loan × monthly rate × months. Paid each month, so it does not compound.
• Rolled interest compounds: each month the interest is added to the balance and the next month is charged on the larger balance, then the whole lot is repaid at the end.
• Retained interest is calculated for the full term on the gross loan and deducted up front, so the net advance you receive is smaller.
• Gross loan = net loan plus fee, plus rolled or retained interest where applicable. Total cost of finance = fee plus total interest. Effective annualised cost expresses that total cost as a yearly percentage of the net loan over the term.

The single biggest cost lever on a bridge is time, because the interest is charged per month. A bridge held for three months costs a fraction of one held for eighteen, so lining up the exit early matters. Rolled-up interest keeps cash free while the works are done and the trade settles but compounds, so the longer the term the more it adds. Where senior debt is already in place, a second charge can sometimes top up the facility rather than refinancing the whole loan. The classic hospitality route is to bridge to secure a property or fund a refurbishment quickly, then repay by refinancing onto a commercial mortgage once the trade is proven. See how we arrange bridging and refurbishment finance for hospitality property.