Bridging Loan Calculator

A bridging loan is short-term borrowing where the cost is driven by the amount borrowed, the monthly rate, the time outstanding, and fees charged at the start or exit. This guide follows the exact five controls shown in the calculator: loan amount, monthly rate, term in months, arrangement fee, and exit fee. It does not attempt to judge whether a lender will approve a transaction or whether a proposed exit will succeed. Its purpose is to make the stated borrowing cost visible before you compare funding routes.

The result panel reports five separate figures. Total cost of borrowing combines the interest, arrangement fee, and exit fee. Interest isolates the time-based charge. Arrangement fee and exit fee show the two percentage-based charges independently, while total repayable adds the borrowing amount to those costs. Reading the components together is more useful than focusing on one headline number, because a lower monthly rate can still be outweighed by a large fee or a longer term.

The calculator passes the loan amount and percentages directly into its bridging-loan calculation. Monthly rate is entered as a percentage, so 0.85 means 0.85% per month rather than 85% per month. Term is entered in whole months and must be at least one. Arrangement fee and exit fee are also percentages. The visible controls accept zero, which lets you model a quote with no fee in either category, but a zero is an assumption and should match the terms you are testing.

For a simple flat-rate illustration, interest can be represented as loan amount multiplied by monthly rate divided by 100, multiplied by the number of months. The arrangement fee is loan amount multiplied by arrangement-fee percentage divided by 100, and the exit fee uses the same structure. The component delegates the calculation to calcBridgingLoan, so use the displayed result as the authoritative output for the app rather than manually rounding intermediate values. In particular, do not enter an annual rate into the monthly-rate field unless you have first converted it to the monthly convention used by the quote.

Loan amount is the principal used by the calculation. Enter the amount you intend to borrow, not the value of the property securing it and not a wider project budget. If a fee is added to the advance rather than paid separately, clarify whether the quoted loan amount already includes that fee before entering it; changing the principal changes every percentage-based cost.

Monthly rate is the recurring percentage applied by the model. The input step is 0.05 percentage points, so 0.85%, 0.90%, and 0.95% are natural comparison points. Term is the number of months the balance is assumed to remain outstanding. Arrangement fee is the percentage charge associated with setting up the loan, while exit fee is the percentage charge associated with repayment or the stated exit. Neither fee field is a cash amount: entering 2 means 2% of the loan amount.

Use the initial values as a factual example: a $200,000 loan, a 0.85% monthly rate, a nine-month term, a 2% arrangement fee, and a 1% exit fee. Under the flat, non-compounding interpretation represented by those inputs, monthly interest is $1,700 and nine months of interest is $15,300. The arrangement fee is $4,000 and the exit fee is $2,000. Total cost of borrowing is therefore $21,300, and total repayable is $221,300.

The example shows why the term deserves as much attention as the rate. The two fees together contribute $6,000 immediately to the cost structure, while the nine-month period contributes $15,300 of interest. If the same loan remained outstanding for twelve months at the same inputs, the illustrative interest would become $20,400 and the total cost would become $26,400 before considering any other charges outside this calculator. That is an additional $5,100 caused solely by the extra three months in this example.

A useful comparison changes one input at a time. At $200,000 and 0.85% per month, extending the term from six to nine months adds three months of illustrative interest, or $5,100, while leaving both fees unchanged. At nine months, reducing the monthly rate from 0.85% to 0.75% lowers illustrative interest by $1,800, because the monthly difference is 0.10% of $200,000, or $200, across nine months. Those comparisons express different levers: term changes exposure duration, while rate changes the recurring price of each month.

Fees should be compared in percentage points and dollars. On a $200,000 loan, one percentage point equals $2,000. A quote with a 0.10 percentage-point lower monthly rate saves $200 per month under the simple example, but a one-percentage-point increase in combined arrangement and exit fees costs $2,000 at the outset. Break-even analysis is therefore straightforward: divide the extra fee dollars by the monthly interest saving to estimate how many months are needed before the lower rate catches up. Check the app's displayed outputs after each change.

Total cost of borrowing is the broad cost figure shown in emphasis. It is not the amount you must repay because principal is excluded from that cost total. Interest answers how much the monthly-rate assumption contributes over the selected term. Arrangement fee and exit fee show whether setup and repayment charges are significant relative to interest.

Total repayable is the principal plus the calculated borrowing costs. In the worked example, $221,300 means the model adds $21,300 of cost to the $200,000 principal. Compare total repayable only with alternatives calculated on the same loan amount, term convention, and fee treatment. If one quote includes a fee in the advance and another requires cash payment, identical-looking totals may not describe identical cash-flow timing.

The most common input error is treating the monthly-rate box as an annual percentage. A second is typing a dollar fee into a percentage field, such as entering 4,000 instead of 2 for a 2% arrangement fee. Users also routinely enter the whole project value instead of the requested principal, select a term that is shorter than the realistic exit timeline, or compare a nine-month estimate with a different quote whose fees are defined differently.

Review the estimate in four passes. First, check units: dollars, percentage points, and months. Second, calculate the fee dollars separately by multiplying each percentage by the loan amount. Third, test one longer term and one higher rate to see whether the exit plan has enough margin. Fourth, list any charges not represented by the five fields and keep them outside the calculator rather than silently folding them into an input. This preserves a clean comparison and makes revisions traceable.

Once the bridging cost is clear, a natural next use case is an affordability or loan-repayment calculator that tests the longer-term replacement funding. The bridging calculator answers, “What does this short-term facility cost at these five assumptions?” A neighbouring repayment tool can answer whether the expected refinance or sale proceeds support the next payment structure. Carry forward the principal or expected replacement balance, but do not carry forward the monthly bridging rate automatically; the products and rate conventions may differ.

You can also return here for a sensitivity check after changing the planned exit month. The most decision-relevant sibling scenario is usually not a dramatic rate change but a delayed exit: keep the loan amount and fees constant, add one or two months, and inspect how total cost and total repayable move. That exercise turns an optimistic completion date into a visible cost range without claiming that the calculator predicts a real transaction.