£10 Million Bridging Loan Costs Explained – Interest Rates, Fees & Real Examples
A bridging loan can be a fast and flexible way to access large sums of money when timing is critical, particularly for property transactions or business opportunities.
Whether you’re purchasing before a sale completes, renovating for resale, or unlocking capital for investment, a bridging loan can provide a short-term funding solution for borrowers who understand the risks and rewards.
But what does borrowing £10 million through a bridging loan actually cost?
The Basics of Bridging Loan Costs
Bridging loans are designed for short-term use, usually between 3 and 12 months and interest is typically charged monthly rather than annually.
There are two main types of costs to consider:
- Interest (charged monthly)
- Fees (such as arrangement, legal, valuation, and exit fees)
Let’s explore each of these using a £10 million loan as an example.
Average Interest Rates on a £10 Million Bridging Loan
The interest rate you’ll pay depends on several factors, including the lender, property type (residential, commercial, or land), loan-to-value (LTV), and your experience or financial profile.
As of 2025, typical residential bridging loan rates range from:
- 0.55% to 0.95% per month
For a £10,000,000 loan, this means your monthly interest could be between £55,000 and £95,000, depending on your circumstances and the lender’s terms.
For a £10,000,000 loan, here’s what that looks like:
| Monthly Interest Rate | Monthly Cost | 12-Month Interest Total |
| 0.55% | £55,000 | £660,000 |
| 0.75% | £75,000 | £900,000 |
| 0.95% | £95,000 | £1,140,000 |
Some lenders offer rolled interest, meaning the interest is added to the loan and repaid at the end, rather than paid monthly.
Others may prefer monthly servicing, where you pay the interest each month and repay the loan amount at the end.
Find out Your Options
Common Bridging Loan Fees
In addition to interest, there are several one-off costs involved in arranging a bridging loan:
Arrangement Fee
Charged by the lender for setting up the loan, often added to the gross loan amount.
- Typically 1–2% of the loan
- On £10,000,000: £100,000–£200,000
Valuation Fee
Lenders require an independent valuation to confirm the property’s market value.
- Usually £2,000–£6,000, depending on property type, size, and location.
Legal Fees
Both borrower and lender will need legal representation. In some cases, the same solicitor can act for both, but not all lenders allow this.
- Typically £3,000–£10,000, depending on complexity.
Exit Fee
Not all lenders charge this, but when they do, it’s often:
- 1% of the loan amount = £100,000
Broker Fee
If you’re working with a broker, a fee may apply. At Kerr & Watson, our fees are always transparent and clearly explained upfront.
Total Estimated Cost of a £10,000,000 Bridging Loan (12 Months)
Here’s an example scenario to illustrate the potential total cost of borrowing:
- Loan amount: £10,000,000
- Interest at 0.75% monthly: £900,000
- Arrangement fee (1.5%): £150,000
- Valuation and legal fees: £15,000
- Total estimated cost: £1,060,000–£1,070,000 (approx.)
In this case, the gross loan (total repayable amount) after 12 months would be around £11,070,000, while the net loan, the amount released to you would be £10,000,000.
If you repay the loan early, your total costs will likely be lower. Conversely, extending beyond the agreed term will increase your costs.
To see what your figures might look like, contact us for a personalised illustration.
What Affects the Cost of a Bridging Loan?
Several factors determine your overall cost, including:
- Borrower profile: Experience, credit history, and financial stability all play a role.Factors That Affect the Cost
- Loan-to-value (LTV): Lower LTVs often mean lower rates.
- Property type: Residential properties typically attract cheaper rates than commercial or land.
- Location: Some lenders have regional preferences or restrictions.
- Exit strategy: A clear repayment plan (such as sale or refinance) is essential.
Is a Bridging Loan Right for You?
A bridging loan can be a powerful financial tool when used correctly. It may be suitable if:
- You need quick access to substantial capital.
- You have a clear and viable exit strategy.
- You’re bridging a short-term gap (for example, buying before selling).
- You’re developing or refurbishing property for resale.
At Kerr & Watson, we’ll take the time to understand your objectives and recommend the most suitable lender and loan structure. And if a bridging loan isn’t the best fit, we’ll tell you.
Get Bridging Loan Advice Today
At Kerr & Watson, we work with a wide panel of reputable bridging lenders to offer clear, transparent, and tailored advice.
Whether you’re purchasing, refinancing, developing, or restructuring, our expert advisers can help you find the most suitable funding solution for your needs.
Get in touch today for a no-obligation consultation and find out what your £10 million bridging loan could really cost.
