How lenders calculate the maximum bridging loan: LTV by security type, the effect of rolled interest, and net versus gross.
- Published
- 1 July 2026
- Reading time
- 5 minutes
The maximum bridging loan is driven by the value of the security and the lender's maximum loan to value for that type of property. Everything else, from your credit history to the strength of the exit, affects whether a lender will go to its maximum, but the LTV cap sets the ceiling.
LTV depends on the security
Lenders group security into categories and apply a different maximum to each. As a general pattern, standard residential property supports the highest leverage. Semi-commercial and commercial property sit lower. Land with planning permission is lower again, and land without planning permission attracts the most conservative treatment. Heavy refurbishment projects are often assessed against the end value, with a maximum expressed as a percentage of gross development value.
Gross versus net
The gross loan is the total facility. The net loan is what actually arrives in your solicitor's account after retained interest and any fees deducted from the advance. If interest is retained for twelve months and an arrangement fee is deducted, the net figure can be materially lower than the gross. When comparing lenders, compare the net advance and the total cost, not just the headline rate.
Rolled interest and the LTV cap
Where interest is rolled up, the balance grows over the term. Lenders check that the facility including all accrued interest still sits within their maximum LTV, which is why the maximum day-one loan on a rolled-interest bridge is lower than on a serviced one.
A worked example
| Item | Figure |
|---|---|
| Property value | £1,000,000 |
| Maximum day-1 LTV (illustrative) | 75% |
| Maximum gross loan | £750,000 |
| Retained interest, 12 months at an illustrative 0.85% per month | £76,500 |
| Arrangement fee at 2%, deducted | £15,000 |
| Net advance | £658,500 |
The figures above are purely illustrative. Actual limits, rates and fees depend on the lender, the security and the transaction.
Other factors that affect the maximum
- Whether the valuation is a full RICS report or an automated valuation.
- Whether the loan is a first or second charge; second charges are assessed on the combined LTV.
- For leasehold property, the unexpired term of the lease at the end of the loan.
- The borrower's experience where the project involves significant works.
