Loan structure
Serviced Interest
Serviced interest is paid monthly from your own income — the lender doesn't add interest to the loan balance. The cheapest interest structure if you can afford the monthly payments.
On a £250,000 serviced bridge at 0.62% per month, you pay £1,550 each month from your own income. The original £250,000 is repaid in full at exit. Total interest over 12 months: £18,600 — versus around £19,400 rolled-up or £20,400 retained.
Serviced interest is only available on unregulated bridging in the UK market. The FCA's affordability assessment requirements make it impractical for regulated cases — most lenders simply don't offer it on owner-occupier deals.
It's the right choice when you have strong rental income or business cash flow that can comfortably cover the monthly payments. If there's any risk you might struggle with the monthly commitment during the loan term, retained or rolled-up is safer.