✅ How do I compare bridging loans properly?
Not by lining up headline monthly rates — that’s comparison theatre. The real checklist: the annualised meaning of a monthly rate (0.82% monthly ≈ 10% a year); your LTV band, which drives everything — sub-60% first-charge deals price from 0.55%–0.85%, mainstream 65–75% cases at 0.85%–1.25%, complex or leveraged cases 1.0%–1.5%+; first vs second charge; every fee stacked (arrangement ~2%, valuation, legals both sides, any exit fee); and the total cost across your actual expected term — the step almost everyone skips. A lower rate with a higher arrangement or exit fee regularly loses. Money Pilot runs the full comparison live across 200+ lenders at zero broker fees — FCA regulated (FRN: 968705).
Here’s the trap most people fall into when comparing bridging loans: they line up the headline monthly rates side by side and pick the lowest one. That’s not comparing bridging loans properly, it’s comparing one line item out of about five that actually determine what you’ll pay. Let me show you how to do this properly.
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The market context first
According to Bridging Trends, the industry data compiled by specialist lender MT Finance, around £200m was lent out in UK bridging loans in the first quarter of 2026 alone, at an average monthly rate of 0.82%, with loans taking an average of 53 days to complete and running for an average term of 12 months. That gives you a genuine sense of where the market actually sits, not just what any single lender advertises.
What should you actually compare, beyond the headline rate?
1. The monthly rate, and what it means annualised
Rates are quoted monthly, not annually, which catches people out constantly. A 0.82% monthly rate works out to roughly 10% annualised, simple interest, though if interest is rolled up (compounding rather than paid monthly), the effective annual cost is slightly higher again. A 2% monthly rate, for context, works out closer to 27% annualised once compounding is factored in. Always convert to an annual figure mentally before comparing across products, or you’re not comparing like with like.
2. LTV band, since this drives everything else
- Up to 60%, first charge, confirmed exit: 0.55%–0.85% per month — the strongest pricing, reserved for the cleanest cases
- 65%–75%, standard case: 0.85%–1.25% per month — most mainstream bridging deals sit here
- Above 75%, or adverse credit or second charge: 1.0%–1.5%+ per month — higher-risk pricing, complex or leveraged cases
Figures are illustrative market ranges recently and will vary by lender and individual circumstances.
3. Fees, all of them, not just the rate
- Arrangement fee, typically around 2% of the loan
- Valuation fee, varies by property
- Legal fees, both your own and, often, the lender’s
- Exit fee, charged by some lenders, not all, when the loan is repaid
- Broker fee, where applicable, though some brokers charge nothing upfront
4. First charge vs. second charge
A first charge bridge, where there’s no existing mortgage or the bridging lender takes primary legal priority, is generally priced more competitively than a second charge bridge sitting behind an existing mortgage, since the second charge lender takes on more risk.
5. The total cost across your actual expected term
This is the step almost everyone skips. A worked example: borrow £275,000 over a 1-year term at a representative rate of 9.55% APRC (annualised), and by the end you could be repaying in the region of £300,000 in total once interest (around £20,000), a broker fee (perhaps £995), and a lender fee (perhaps £5,500) are all added together. That’s the number that matters, not the headline monthly percentage in isolation.
Why does comparing across a wide panel matter so much here?
Because rates and criteria vary significantly between lenders for what looks like the same case on paper. One lender’s standard pricing for a 65% LTV auction purchase might be meaningfully cheaper, or more expensive, than another’s, purely based on their current appetite and cost of funds. Rather than approaching lenders one at a time, comparing through a broker with genuine panel access lets you see multiple live quotes side by side, rather than accepting the first number you’re given.
Does a lower headline rate always mean a better deal?
No, and this is worth internalising properly. A lower rate paired with a higher arrangement fee, or an exit fee the other product doesn’t charge, can end up costing more overall, particularly on shorter-term loans where fixed fees make up a larger proportion of the total cost. Always ask for the full cost illustration, not just the rate, before deciding anything.
What increases your risk when comparing options?
Bridging loans carry real risk if your exit strategy doesn’t go to plan, delays in a sale, a refurbishment overrunning, a refinance application taking longer than expected can leave you needing to extend the loan, sometimes at a higher default rate, or arrange a costly re-bridge. When comparing products, it’s worth checking not just the rate, but what happens if your exit is delayed, and whether the lender offers any flexibility around extensions.
The bottom line
Comparing bridging loans properly means looking well beyond the headline monthly rate, LTV band, first or second charge, every fee stacked on top, and the total cost across your genuinely expected term. A slightly higher rate with lower fees can easily beat a lower rate loaded with charges, and the only way to know which is actually cheaper is to ask for the full cost illustration on every option before choosing. Comparing across a genuinely wide panel of lenders, rather than the first quote you receive, is where the real savings tend to show up.
