HomeBuyingCosts Guide
Bridging Finance and Completion Costs
Written and reviewed by James Whitfield · Updated 2026-02-17 · 6 min read
Checked against 2026/27 HMRC, Revenue Scotland & HM Land Registry rates · Editorial standards · Methodology
Use this guide to evaluate bridging scenarios with caution and include realistic buffers for speed-related costs.
Key takeaways
- Bridging is priced monthly — interest of roughly 0.75%–1% a month dwarfs the other fees.
- A £250,000 bridge over six months costs around £25,000 all in.
- Arrangement fees (about 2%) and exit fees (about 1%) add several thousand pounds on top of interest.
- Bridging doesn't change your stamp duty — and buying before selling adds the reclaimable 5% surcharge on top.3
Bridging finance can get you to completion when your sale hasn't caught up with your purchase — but it's expensive. A £250,000 bridge held for six months typically costs around £25,000 once you add the arrangement fee, monthly interest, valuation, legal fees and exit charge.1 The monthly interest is the part that hurts, and it's why bridging only makes sense when the exit is genuinely short and certain.
This guide breaks down what a bridging loan actually costs, with a full worked example over six months, and explains how bridging interacts with stamp duty. Bridging is a specialist product — always take independent advice before using it.
Worked examples — home mover typical fees
| Price | England/NI tax | Scotland tax | Wales tax |
|---|---|---|---|
| £300,000 | £5,000 | £4,600 | £4,500 |
| £500,000 | £15,000 | £23,350 | £18,000 |
| £750,000 | £27,500 | £48,350 | £36,750 |
What bridging finance actually costs
Bridging is short-term secured lending, and its cost is dominated by interest charged per month rather than per year. Rates are commonly 0.75% to 1% a month. On a £250,000 loan at 0.9% a month, that's £2,250 every month — £13,500 over six months, before any fees.
On top of interest sit the fees. A lender arrangement fee is typically around 2% of the loan (£5,000 on £250,000). There's a valuation fee, legal fees for both the lender's solicitor and your own, often a broker fee, and sometimes an exit fee of around 1% when you repay. Add these up and the fees alone can be £10,000 on a mid-sized bridge.
Interest is often 'rolled up' — added to the loan and repaid at the end rather than paid monthly. That eases monthly cash flow but means you pay interest on the interest, so the rolled-up balance grows faster than a simple monthly figure suggests. Always ask whether a quote is for serviced (paid monthly) or retained/rolled-up interest.
The cost of a £250,000 bridging loan over six months
This worked example uses mid-market illustrative rates for a six-month bridge. Your actual quote depends on the lender, the loan-to-value, whether the loan is regulated, and how quickly you can exit.
| Cost | Amount | Notes |
|---|---|---|
| Arrangement fee (2% of £250,000) | £5,000 | Charged by the lender to set up the loan |
| Interest (0.9%/month × 6 months) | £13,500 | The largest cost by far |
| Valuation fee | £900 | Lender's valuation of the security property |
| Legal fees (both sides) | £1,500 | Lender's solicitor plus your own |
| Broker fee | £1,500 | Specialist bridging brokers usually charge |
| Exit fee (1%) | £2,500 | Charged on repayment by some lenders |
| Total cost of the bridge | £24,900 |
Illustrative rates. If the exit slips beyond six months, interest keeps accruing at roughly £2,250 a month, so a delay is the single biggest risk to this budget.1
Nearly £25,000 to borrow £250,000 for half a year is why bridging is a last resort, not a convenience. It can be worth it when it secures a purchase you would otherwise lose — but only if the exit is short and reliable.
Bridging and stamp duty — the double cash hit
Bridging doesn't change your stamp duty. You still pay SDLT (or LBTT/LTT) on the purchase at the normal rates for your price and buyer type.2
The complication is that people often bridge precisely because they're buying before they've sold. On completion day that means you own two homes, so the 5% additional-property surcharge applies on top of standard SDLT — an extra £15,000 on a £300,000 purchase.3 You can reclaim the surcharge once your old home sells within 36 months, but you need it in cash upfront, which increases the amount you're bridging.4
So bridging can create a double cash hit: the cost of the loan itself, plus a larger surcharge-inflated purchase price to fund. Factor both into the sum before deciding the bridge is affordable.
Common mistakes with bridging
Assuming a clean three-month exit. Chains slip, and every extra month adds thousands in interest. Budget for a longer hold than you expect, and stress-test whether it's still affordable.
Focusing only on the monthly rate. The arrangement fee and exit fee can add £7,500 to a £250,000 bridge before a single month's interest. Compare the total cost, not the headline rate.
Overlooking the difference between regulated and unregulated bridging. Loans secured on a home you'll live in are usually regulated by the FCA, giving more protection; lending on investment property is often unregulated. Know which you're taking.
Ignoring the surcharge cash. If you're buying before selling, the reclaimable 5% surcharge inflates the amount you need to bridge. Include it.
Use the calculator for this topic
Frequently asked questions
How much does bridging finance cost?+
Bridging interest is typically 0.75%–1% per month, so a £250,000 loan can cost around £2,250 a month. Add an arrangement fee of about 2%, a valuation, legal fees, usually a broker fee and sometimes a 1% exit fee. Over six months a £250,000 bridge commonly totals around £25,000.
Is bridging interest paid monthly or at the end?+
Both options exist. 'Serviced' interest is paid each month; 'retained' or 'rolled-up' interest is added to the loan and repaid at the end. Rolled-up interest eases monthly cash flow but means you pay interest on interest, so the balance grows faster. Always confirm which basis a quote uses.
Does bridging affect how much stamp duty I pay?+
No. Stamp duty is charged on the purchase at the normal rates regardless of how you fund it. But if you bridge because you're buying before selling, you'll pay the 5% additional-property surcharge on completion — reclaimable within 36 months if the old home then sells.3
What's the difference between regulated and unregulated bridging?+
A bridge secured against a property you will live in is usually regulated by the Financial Conduct Authority, giving you consumer protections. Lending secured on investment or buy-to-let property is often unregulated. Regulated bridging tends to involve more checks but more protection.
When is bridging worth the cost?+
When it secures a purchase you'd otherwise lose and the exit — usually the sale of your existing home — is short and reliable. If the exit is uncertain or could take many months, the interest can escalate quickly and the loan can become a serious risk. Take independent advice first.
What happens if my sale falls through while I'm bridged?+
You keep paying interest until you repay the loan, and you'll need an alternative exit — a remortgage onto a longer-term product, or a new buyer. This is the core risk of bridging, and it's why lenders and advisers stress-test the exit before agreeing the loan.
Sources & references
OfficialThe figures and rules on this page are drawn from the official UK government sources below. Rates are the confirmed 2026/27 amounts. Each link opens the relevant official page in a new tab.
- GOV.UK — Buying or selling your home www.gov.uk/buy-sell-your-home Overview of the conveyancing, survey and completion process.
- GOV.UK — Stamp Duty Land Tax: residential property rates www.gov.uk/stamp-duty-land-tax/residential-property-rates Current band-by-band residential SDLT rates.
- GOV.UK — Higher rates for additional properties www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property The 5% additional-property surcharge and 36-month refund rules.
- GOV.UK — Apply for a repayment of the higher rates of SDLT www.gov.uk/government/publications/stamp-duty-land-tax-apply-for-a-repayment-of-the-higher-rates-for-additional-properties How and when to reclaim the additional-property surcharge.
- Revenue Scotland — LBTT residential property revenue.scot/taxes/land-buildings-transaction-tax/residential-property Scottish LBTT rates and first-time buyer relief.
- Welsh Revenue Authority — Land Transaction Tax rates and bands www.gov.wales/land-transaction-tax-rates-and-bands Welsh LTT main and higher residential rates.
Verified against published UK government guidance. See also Methodology and Editorial standards.
Related guides
Written and reviewed by James Whitfield and the HomeBuyingCosts editorial team.
Stamp duty, LBTT and LTT figures are checked against GOV.UK, Revenue Scotland and GOV.WALES. We explain every cost of buying a home in plain English, with worked examples. Editorial standards · About us