# Bridging Finance Costs Explained Source: https://www.cashbookfinance.co.uk/insights/bridging-finance-costs-explained Last updated: 2026-10-26 Author: Bjorn Laku, Director & Chief Marketing Officer (https://www.bjornlaku.com/) Publisher: Cashbook Finance Limited > Understand UK bridging finance costs, including interest, arrangement and legal fees, LTV, property risk, exit strategy and factors that affect pricing. FCA-registered UK lender FRN 782472 ## Bridging costs explained. This is a practical guide to total bridging cost. It explains interest, arrangement fees, valuation and legal costs, exit fees, [loan-to-value](https://www.cashbookfinance.co.uk/insights/bridging-finance-glossary#term-loan-to-value-ltv), term length, security quality and why the cheapest headline rate can still be the wrong deal. Written and reviewed by [Bjorn Laku](https://www.cashbookfinance.co.uk/bjorn-laku), Director & CMO. Business bridging only: Cashbook Finance does not offer regulated bridging loans secured on a home the borrower or a close family member lives in. LTV · Property → short-term capital Illustration Bridging structure check A £325,000 loan against a £500,000 property Within reference **65%** loan-to-value, against a 70% illustrative reference point - **Equity remaining** £175,000 - **Headroom to 70% LTV** £25,000 Estimated property value · £500,000 Requested gross loan · £325,000 Within a 70% illustrative LTV reference point. **Security risk:** Your property may be repossessed if you do not keep up repayments on a loan secured against it. Check eligibility · Costs and exit **£30m+** funded · **100+** UK businesses since 2019 · London SE1 - FCA **782472** - ICO **ZB545200** - Companies House **10723098** Cost component **What you may pay** Interest, [arrangement fee](https://www.cashbookfinance.co.uk/insights/bridging-finance-glossary#term-arrangement-fee), valuation, legal work, possible exit/admin charges and any broker fee should be viewed together. Interest · Arrangement fee · Legal/valuation Pricing driver **What changes the quote** LTV, asset type, title risk, borrower profile, exit route, term, urgency and documentation quality all affect cost. Loan-to-value · Exit route · Security quality Decision shortcut **Use this page for** Estimating true total cost, comparing quotes properly and avoiding open-ended borrowing that gets expensive fast. Total cost · Quote comparison · Exit discipline - [Invoice Finance vs Overdraft](https://www.cashbookfinance.co.uk/insights/invoice-finance-vs-overdraft) - [Invoice Finance vs Business Loan](https://www.cashbookfinance.co.uk/insights/invoice-finance-vs-business-loan) - [Invoice Factoring vs Invoice Discounting](https://www.cashbookfinance.co.uk/insights/factoring-vs-invoice-discounting) - [Selective vs Full-Ledger Finance](https://www.cashbookfinance.co.uk/insights/selective-invoice-finance-vs-full-ledger) - [Trade Finance vs Invoice Finance](https://www.cashbookfinance.co.uk/insights/trade-finance-vs-invoice-finance) - [Bridging Finance vs Development Finance](https://www.cashbookfinance.co.uk/insights/bridging-finance-vs-development-finance) - [Bridging Finance vs Commercial Mortgage](https://www.cashbookfinance.co.uk/insights/bridging-finance-vs-commercial-mortgage) - [Invoice Finance Costs Explained](https://www.cashbookfinance.co.uk/insights/invoice-finance-costs-explained) Check eligibility · About 2–3 minutes, no credit search. ### What actually changes bridging cost. Primary driver **Loan-to-value** More equity and valuation margin usually improve the case. Evidence driver **Exit route** A credible sale or refinance route lowers uncertainty. Main watch-out **Timing** Open-ended borrowing creates avoidable cost. What actually changes bridging cost | Cost driver | Usually stronger when | Watch-out | | --- | --- | --- | | Loan-to-value | More equity and valuation margin usually improve the case. | Tight LTV leaves no room for cost or value movement. | | Exit route | A credible sale or refinance route lowers uncertainty. | Speculative exits are expensive or not fundable. | | Legal route | Clean title and fast solicitors help completion. | Title defects, planning issues and unclear ownership slow everything. | | Timing | Short, documented deadlines can fit bridging well. | Open-ended borrowing creates avoidable cost. | ### Bridging costs: use the comparison to make a funding decision. Separate headline interest from the full cost of completing and exiting the bridge. #### Interest May be serviced, rolled or retained. The method changes net proceeds. #### Transaction costs Valuation, legal, arrangement and broker costs can materially affect the usable amount. #### Delay risk Extensions, default interest or a delayed exit can increase total cost beyond the initial illustration. Examples are educational only. Eligibility, pricing, security and final terms always depend on a formal assessment of your business, your documents and the facility proposed. **Related guidance:** [Bridging finance](https://www.cashbookfinance.co.uk/bridging-finance) · [Pricing & decisions](https://www.cashbookfinance.co.uk/pricing-decisions) · [Eligibility](https://www.cashbookfinance.co.uk/eligibility) · [Case studies](https://www.cashbookfinance.co.uk/case-studies) Worked example ### The full cost of a bridge. A £325,000 bridge against a £500,000 property (the console above), repaid by a sale in month 9. Interest is the largest cost and grows with every month the exit takes, which is why the exit date matters more than the headline rate. Check eligibility · Talk it through with a director | Property value | £500,000 | | --- | --- | | Gross loan (65% loan-to-value) | £325,000 | | Arrangement fee, 1%, from the loan | £3,250 | | Interest at 1% a month, rolled up, for 9 months | £29,250 | | Repaid at exit (loan plus interest) | £354,250 | | Cost before valuation and legal fees | £32,500 | | If the exit is 3 months late | +£9,750 in interest | Illustrative: interest at 1% a month, rolled up, and an arrangement fee of 1% of the loan. Valuation and legal costs are extra and quoted per case. Bridging finance is secured against property, which may be repossessed if repayments are not maintained. ### What actually drives bridging-finance cost? Cashbook Finance assesses the whole repayment case rather than one monthly rate. Loan-to-value, property type and condition, valuation, legal complexity, expected term, retained or [serviced interest](https://www.cashbookfinance.co.uk/insights/bridging-finance-glossary#term-serviced-interest), borrower circumstances and the credibility of the exit all affect structure and total cost. A faster or higher-leverage transaction can require more risk headroom even when the underlying property is strong. Check eligibility · About 2–3 minutes, no credit search. #### Official sources - Bank Rate · Bank of England Official guidance and legislation on the rules this page refers to. They explain the rules in general; take advice on your own position. ### More guides on bridging finance - [Bridging for limited companies and SPVs](https://www.cashbookfinance.co.uk/insights/bridging-loans-limited-companies-spvs) - [Refurbishment bridging finance](https://www.cashbookfinance.co.uk/insights/refurbishment-bridging-finance) - [VAT bridging loans](https://www.cashbookfinance.co.uk/insights/vat-bridging-loans) - [Auction bridging finance](https://www.cashbookfinance.co.uk/insights/auction-bridging-finance) - [Bridging loans in London](https://www.cashbookfinance.co.uk/bridging-loans-london) - [Bridging finance valuations](https://www.cashbookfinance.co.uk/insights/bridging-finance-valuation-guide) --- Cashbook Finance. Cashbook Finance Limited is registered with the Financial Conduct Authority under Firm Reference Number 782472. Company number 10723098. Registered office: Cumberland House, 24–28 Baxter Avenue, Southend-on-Sea, Essex SS2 6HZ. Registered with the Information Commissioner’s Office under reference ZB545200. All finance is subject to eligibility, satisfactory due diligence, credit approval and agreed terms. Invoice finance, trade finance and bridging finance may not be suitable for every business. The availability, structure, amount, pricing, fees, security requirements and completion timescales of any facility will depend on the applicant’s circumstances, the quality of the supporting evidence provided and our assessment of the proposed transaction. Any figures, examples, rates or timescales shown on this website are for illustrative purposes only and do not constitute an offer, commitment or guarantee of finance. Terms and conditions apply. Bridging finance is secured against property. Your property may be repossessed if you do not maintain repayments on a loan secured against it. Applicants should obtain independent legal, financial and tax advice where appropriate.