How Much Do Bridging Loans Cost?

Gross borrowing and net funds: what can you actually use?

The gross facility is the borrowing figure in the proposed terms. The net advance is the cash released after the deductions made at completion. Ask the lender or broker to identify exactly what each figure includes. Lenders may present fees and interest allowances differently.

Arrangement fees, retained interest and other agreed charges may be deducted from the facility. If the bridge replaces existing secured borrowing, some of the advance will go towards redeeming that debt. The remaining funds must still cover the purchase or project you are financing.

Do not assume that a headline loan-to-value limit is the amount you can spend. Ask which valuation the lender uses, whether the limit includes interest and fees, and how any existing charges affect the calculation. A facility secured on more than one property also puts more than one property at risk.

How bridging loan interest is paid

Interest may be paid during the loan, withheld from the advance or added to the amount owed. Some arrangements combine these methods. The payment structure affects both the cash available at the start and the balance that your exit must cover.

Check the calculation as well as the rate

Ask whether interest is calculated daily or monthly, which balance it is charged on, whether it compounds and whether a minimum interest period applies. A loan repaid early may still carry a minimum charge. An exit fee and an early repayment charge are separate terms to check.

Multiplying a monthly rate by twelve does not produce a comparable APR or APRC. Fees, payment dates and the calculation method matter. Use the lender’s applicable disclosure and a full cost schedule rather than an annual figure calculated from a headline monthly rate.

Which bridging loan fees should you check?

Not every charge below applies to every loan. Request a written breakdown showing the amount or basis of each charge, who receives it, when it is payable and whether it is refundable. Where VAT or disbursements apply, check whether they are included.

Lender arrangement or facility fee

Check whether this is fixed or percentage-based, what the percentage applies to and whether the fee is paid separately, deducted or financed. Adding it to the debt can affect the interest calculation.

Broker and administration charges

Ask for the charges for your particular service, including any application, advice or arrangement fee, its payment trigger and refund terms. Lender-paid commission is separate from a fee you pay; ask how remuneration is disclosed.

Valuation and specialist reports

The security may need a valuation and, where relevant, additional reports. Confirm the scope and cost before instruction. A valuation payment does not guarantee that the loan will be approved or completed.

Legal costs and disbursements

Establish whether you pay both your solicitor’s charges and the lender’s legal costs. Ask about searches, registration, title issues and additional security. Dual representation is only an option where permitted and suitable.

Exit and redemption charges

Check for an exit fee, an early repayment charge, a minimum interest charge and redemption administration costs. Confirm the calculation basis and what changes if you repay earlier than planned.

Other case-specific charges

Ask about application, drawdown, monitoring, inspection, title insurance, transfer, extension and default charges where relevant. Obtain the applicable tariff and identify charges that arise only if a particular event happens.

Some costs may be incurred even if a purchase falls through or the lender declines the application. Check cancellation and refund terms before authorising work or making a payment.

How to compare the total borrowing cost

Compare proposals using the same usable funds, planned repayment date and interest-payment assumptions. Two facilities with the same gross amount may release different amounts of cash. A lower rate may also be offset by higher fees or a minimum interest charge.

1. Record the gross facility and funds drawn. Identify any financed fees, interest allowance or undrawn part of the facility.
2. Calculate the usable advance. List completion deductions and existing borrowing being redeemed, without counting the same item twice.
3. List payments from your own money. Include separately paid fees and any interest payments during the term.
4. Establish the expected redemption amount. Show the capital balance, unpaid interest and charges due at the planned exit date.
5. Add the financing costs once. Include total interest and applicable fees, whether paid separately, withheld or added to the debt. Repaying borrowed capital is not itself a borrowing cost.
6. Test a later repayment date. Obtain the lender’s terms for further interest and any additional charges, rather than assuming that the original rate simply continues.

A final loan repayment is not the same as the total cost of borrowing. Some costs may already have been paid or deducted before that repayment. Your solicitor’s completion statement and the lender’s redemption statement help reconcile the actual cash movements.

Keep the wider transaction budget separate

Purchase taxes, renovation costs, insurance, property holding costs and selling expenses still need funding, even where they are not part of the lender’s borrowing-cost figure. Allow for them when deciding whether the transaction and repayment plan are affordable. Tax treatment depends on the location and circumstances; obtain separate legal and tax advice where needed.

What happens to the cost if repayment is delayed?

A delay can increase interest and other costs, and it can put you in breach of the agreed repayment deadline. The balance may grow while the sale price or mortgage amount available to repay it stays the same.

Ask for a delay scenario before borrowing. It should distinguish extra time within the agreed term from borrowing beyond the maturity date. Check when retained interest is exhausted, whether payments then become due, and what extension or default terms apply.

If a sale is your exit, consider a slower sale and a lower net selling price after costs and other secured debts. If refinancing is your exit, consider the effect of a lower valuation, incomplete works or changed mortgage criteria. Rental income does not automatically demonstrate that a buy-to-let mortgage will be available.

If the bridge is already running and the exit is slipping, contact the lender and broker promptly. An extension or another bridge requires agreement and may involve fresh checks and charges. Repeated refinancing can add costs without resolving the underlying repayment problem.

For a rental-property exit, the existing bridge-to-let guide explains the route in more detail. A future mortgage remains subject to the lender’s assessment.

Can a different finance route be more suitable?

It can. If the property and borrower qualify for longer-term borrowing within the transaction deadline, a mortgage or remortgage may avoid the need to arrange and repay a separate short-term facility. Compare the whole route, including any costs of replacing the bridge, rather than just the first loan.

Possible routes include a remortgage, a buy-to-let mortgage for a rental property or a commercial mortgage where appropriate. A project with substantial works may need a different funding structure; see the existing refurbishment finance guide.

Bridging may still be considered where the timing or property condition prevents a conventional mortgage, but urgency does not make the borrowing suitable. For auction purchases, work from the actual contract deadline and legal pack; see the auction finance guide. These links explain different routes, rather than confirm eligibility for your case.

A shorter agreed term is not automatically a saving if your exit needs more time. Likewise, offering another property as security may affect the terms, but it also increases the property exposed to the debt.

What to ask before accepting bridging terms

• How much cash will be available for my purchase or project after every completion deduction?
• What balance is interest charged on, and how is it calculated?
• Which fees must I pay before completion, and what happens to them if the loan does not complete?
• What will I owe at my planned repayment date, including charges payable then?
• What changes if I repay early or the exit takes longer?
• What evidence supports my sale or refinance exit, and what is the fallback if it fails?
• Which property is secured, what is the priority of the charge, and what consents are needed?
• Is this arrangement regulated, what service am I receiving, and which protections and complaint routes apply?

The regulatory position depends on the borrower, security, occupation, purpose and the applicable rules. Labels such as “residential”, “commercial” or “limited company” are not enough to decide it. Ask for the applicable disclosures and written explanation for your circumstances.

Bridging loan cost questions

Make an informed bridging enquiry

Use Count Ready’s existing bridging enquiry route to describe your transaction. Include the property type, estimated value, existing secured borrowing, funds needed, deadline and proposed repayment method. Say if a bridge is already running and give its repayment deadline.

Ask for confirmation of the service available for your case and any charges before proceeding. An enquiry is not an approval, an offer of finance or a commitment to a particular lender.

Send initial details through the enquiry form. Identity documents, bank statements and other sensitive evidence should be collected through an agreed secure process when needed.

The enquiry form is on the bridging finance page.

Your property may be repossessed if you do not repay a loan secured on it.

Sources and further reading

Source checks for this revision were completed on 29 September 2026. Lenders set their own interest and repayment terms: United Trust Bank’s bridging information describes daily interest and a minimum interest charge, while Shawbrook’s bridging information describes monthly or rolled-up interest and no minimum interest period. These illustrate why you need the actual product terms; they do not establish Count Ready’s access to either lender.

Financial information should be clear and balanced; see the FCA’s fair, clear and not misleading rules. This guide gives general information, not a recommendation for a particular transaction. It does not replace the lender’s offer, applicable disclosures or individual financial, legal and tax advice.