Loan structure
Retained Interest
Retained interest means the full term's interest is calculated upfront and added to the loan on day one, repaid in full when the loan exits.
On a £250,000 retained-interest bridge at 0.62% per month over 12 months, the lender adds approximately £20,400 of interest to the loan at completion — making the gross loan around £270,400. No monthly payments are made; the entire balance is repaid at exit.
Retained is the standard structure on regulated bridging because it removes affordability risk during the loan term. You don't need to service interest from monthly income.
The trade-off is that you pay interest on the interest — the gross loan is bigger, so the loan-to-value calculation includes the retained interest. If you exit early, you typically receive a partial rebate of unused interest (lender-dependent — most rebate from month 3+).
Formula
Gross loan = net loan ÷ (1 − rate × term in months)