Are Bridging Loans Fixed? What Locks on a Prime London Facility

You have an offer on a house in prime central London. The term sheet shows a monthly rate. The live question is simple: are bridging loans fixed, or does the rate move if Bank Rate does?

On a high-street tracker, the cost can shift with the Bank of England's Bank Rate. At Rikvin, a fixed rate for the original tenor is considered case by case, subject to terms; where one is agreed, it does not follow Bank Rate.

Three things still are not locked: the drawdown date, the cash you actually receive after valuation and retained interest, and the price of any extension if the exit overruns.

Are bridging loans fixed for the original tenor?

It depends on the offer letter. At Rikvin, a fixed rate for the original tenor is considered case by case, subject to terms. Where one is agreed, the monthly rate on the accepted offer is the rate for that tenor.

The tenor is set, commonly inside a 3–24 month window, and so is the arrangement fee. That is what fixed means on a prime London bridging loan: term and fee, plus the rate where a fixed rate has been agreed.

Every figure stays indicative until valuation and due diligence are done. Our borrowers are typically corporates and property investors, and we lend against the asset and the exit. We are not a bank.

What still moves after you accept

Drawdown is not a locked calendar day. The Report on Title, KYC and source-of-funds checks set the timetable. Once the file is complete, drawdown is typically about two weeks; urgent cases can complete inside seven days, but that is not guaranteed.

The net advance can still fall. On any UK bridging loan we size to LTV, up to 75%, on the lower of the valuer's figure and the price in your contract. A light valuation shrinks the facility even if the monthly rate stays put.

If the exit misses the tenor, the original quote does not have to roll. An extension is a new conversation: pricing, fees and conditions can all change. That is the gap between fixed for the term and fixed for as long as you need.

If the vendor's timetable is tight, map the lending process before you treat the rate as the only number that matters.

How retained interest works on a prime London facility

On many prime central London files, interest is retained at drawdown rather than serviced monthly. You do not send a monthly cheque. The cost comes off the facility on day one, so cash at completion is the headline loan minus retained interest and fees.

Take an indicative £8 million first-charge facility and a 12-month tenor. A full year of interest is held back, plus the arrangement fee. Redeem in month eight and unused retained months are commonly credited, subject to the facility letter.

Stay past month twelve and you are not still on the original quote as of right. The exit has to be dated and evidenced. Related: bridge funding for a prime Hampstead property only works when repayment is a plan, not a hope.

If the completion date is tight, speak to a specialist before you exchange.

When a fixed-rate bridge is the wrong tool

A short, fixed-rate bridge is the right tool when the exit is dated: an exchanged sale, a refinance already in credit process, or a chain break with a known buyer. It is the wrong tool if you need years of rate certainty, or if the exit is still a hope.

The main risk is not a Bank Rate rise during the original term. It is overrunning that term and paying a new price to stay in, or having no exit at all. If you want the cost to fall when Bank Rate is cut, a fixed monthly bridging rate will not do that.

Where the vendor will not wait, matching cash-buyer speed in prime central London is the point of the product. Where you have time and income a high-street lender will underwrite, a mortgage is usually cheaper.