Guides · Bridging finance
Bridging loan rates in late 2026: the base rate, the Budget and your exit
The Bank of England held Bank Rate at 3.75% in September for the sixth meeting running, a Budget lands on 28 October, and markets have started pricing in rises rather than cuts. Here is what that means for anyone planning to use a bridging loan in the next few months, and what actually moves the rate you are offered.
Avantigo Capital · October 2026
Where rates stand right now
Bridging is priced monthly rather than annually. Across the market, industry data puts the average at a little under 0.9% a month, with the strongest cases (low loan-to-value, clean security, an obvious exit) priced from around 0.5% a month. Heavier refurbishments, unusual property and tight timescales sit at the top of the range.
Bridging rates do not move one-for-one with Bank Rate. Lenders fund themselves from wholesale lines and investors, so their pricing follows funding costs and competition more than the headline rate. Competition is strong: several specialist lenders have reported record lending this year and new funding lines, which has kept margins tight.
What the September decision tells us
On 17 September the Monetary Policy Committee voted 6–3 to hold at 3.75%. The notable part is that the three dissenters wanted a rise to 4%, not a cut. Inflation climbed back to 3.1% in August, and market pricing has moved towards several increases by mid-2027.
For bridging borrowers that matters in two places:
- The loan itself. Most bridges are fixed for their term, so a rate agreed now is a rate you keep. If you have a deal in view, locking terms sooner removes one variable.
- The exit. This is the bigger risk. If your plan is to refinance onto a buy-to-let mortgage, that mortgage is assessed on the rates at the time you refinance, not today. Higher rates mean tighter rental stress tests, which can mean a smaller term loan than you planned for.
The 28 October Budget: what is known and what is noise
The Budget is on Wednesday 28 October. Some property changes are already fixed: from April 2027, individual landlords in England, Wales and Northern Ireland pay new property income tax rates two points higher than standard income tax. Beyond that, most of what is circulating is speculation, including talk of aligning capital gains tax with income tax.
Our view: don't let Budget headlines drive a funding decision. If a purchase stacks up on its own numbers and the exit works, it works. If it only works under one tax scenario, it is worth waiting until 29 October to find out which one you are in.
What it really costs: a worked example
Illustrative only, on a £300,000 bridge for 12 months at 0.85% a month with interest retained:
| Item | Amount |
|---|---|
| Interest (0.85% × 12 months on £300,000) | £30,600 |
| Arrangement fee (typically around 2%) | £6,000 |
| Valuation and legal fees (varies) | £3,000–£6,000 |
| Approximate total cost of borrowing | £39,600–£42,600 |
Repay in six months instead of twelve and the interest roughly halves, as most lenders charge only for the months used once a minimum term has passed. That is why a realistic timeline matters more than shaving a few basis points off the rate.
Five things that move your rate more than Bank Rate does
- Loan-to-value. Dropping from 75% to 60% usually opens better pricing than any base rate move.
- The exit. A sale already agreed or a refinance with terms in principle is priced better than "we'll sell it when the works are done".
- The property. Standard residential and mainstream commercial is cheapest. Non-standard construction, mixed use and land cost more.
- Works. Light cosmetic works are priced close to a plain bridge; structural or planning-dependent works are not.
- Your track record. Lenders reward experience with similar projects.
Protecting your exit if rates rise
If you are bridging now with a plan to refinance in 2027, test the refinance at a rate about one percentage point higher than today's buy-to-let pricing. If the numbers still work, you have room. If they don't, consider a lower opening loan, a longer bridge term for breathing space, or getting a term lender's agreement in principle before you draw the bridge.
Talk it through
If you have a purchase or refinance coming up and want to know what terms look like before or after the Budget, send us the outline. We'll come back with realistic pricing and an honest view on the exit.
This guide is general information, not financial or tax advice. Rates and figures are illustrative and correct to the best of our knowledge in October 2026; sources include Bank of England announcements, Bridging Trends market data and published Budget commentary. Avantigo Capital Ltd is not authorised or regulated by the Financial Conduct Authority and arranges only unregulated bridging loans, commercial mortgages and buy-to-let mortgages for limited companies and other corporate borrowers. Bridging loans secured on a home you or a family member live in are regulated and are referred, with your consent, to an FCA-authorised firm. Your property may be repossessed if you do not keep up repayments on a loan secured on it.