What Are The Fees Involved With a Bridging Loan?
There are a number of fees involved with a bridging loan, starting with arrangement fees of 1-3% and monthly interest from 0.5%-2% per month.
Other fees include paying valuation and legal fees, and these can increase based on the complexity of the property and number of hours needed by your solicitor.
It is important to take all fees into consideration when calculating the potential profit margins when purchasing a property.
For any bridging enquiries, you can speak to our award-winning customer service team on 0203 828 6879 or email us at bridging@maslowcapital.com
The Main Fees For Bridging Loans Include:
| Fee Type | Typical Cost / Range | ||
| Arrangement Fee | 1% – 2% of the loan amount | ||
| Interest | 0.5% – 2% per month (6–24% per year) | ||
| Valuation Fee | Legal Fees | Exit Fee | 1% – 2% of the loan amount |
| Broker Fee | 1% – 3% of the loan (if using a broker) | ||
| Admin/Processing Fees | Telegraphic Transfer Fee | Extension Fees | Varies |
Fees not directly involved with the bridging loan transaction may include fees for accountants, architects, builders, designers and more.
Bridging Loan Fees Example:
Based on borrowing €600 over 6 months:
Arrangement Fee – (1–2%)
Legal Fees – up to €8.4 Fee (1%) – €58.8 – €67.2 Are The Average Fees For Bridging Loans?
The average interest rate charged for bridging loans is 0.5%-2% per month and this rate varies between lenders and their criteria. Other factors include: You pay monthly. Early repayment usually means you stop paying — no penalty unless there’s a minimum term. All interest is paid at the end. Some lenders may still enforce a minimum term, so you pay interest for that full period even if you repay early. Lender assumes a set loan period (e.g. 6 months) and holds back interest upfront. If you repay early, you may not get a refund on unused months — this acts like a soft early repayment cost. Use a broker to get the best deal – A bridging loan broker will have access to a number of lenders and options – and based on your requirements and criteria, they will be able to offer you the most competitive rates and terms. You may find that one lender is able to charge you significantly less interest than another, even though you have the same requirements, but just because they have better risk appetite. Note that some lenders charge only 1% as an arrangement fee and some charge as much as 3%. Knowing upfront how much the broker charges and deciding to proceed or not, could save you thousands on broker fees. Type of property – The interest is likely to be higher for commercial properties (compared to residential properties) because residential properties are seen as being more favourable and there being a greater demand. Use additional security – If you have equity in other properties, you can use this towards your bridging loan – and this can help you reduce your deposit amount and access more favourable rates. Have a good track record and exit strategy – Lenders certainly want to work with more experienced and successful borrowers – and having a proper track record and clear and well articulated exit strategy will make your application look more attractive and give you access to better rates. If you default on your bridging loan and miss the repayment deadline as agreed, you will be charged a default fee of 1% – 3% per month as an interest and a late payment (such as €600 or €1.2 may apply. The default fee may continue each month until the loan is repaid. The lender might undertake a process to review your loan and consider some repayment options – and this may incur an admin or review fee of €600 style=”font-weight: 400;”>Further fees may be incurred if the loan goes further into arrears, including legal fees, repossession fees, receivership fees and more. There are several options if you are struggling to repay your bridging loan or there is a delay in repayment. This is very common, especially if building work is taking longer than expected or there have been any legal or construction issues with the property. Speaking to the lender may offer options such as loan extensions, refinancing or rebridging to give yourself more time. Yes, some lenders will charge you an early exit fee if you decide to exit the loan within a certain timeframe e.g 1-3 months. This fee varies, and might be 1% to 2% of the entire loan amount. This fee does depend on the lender, with some providers not charging any early redemption fees at all. If the loan is a 12-24 month loan, the lender may need to be able to earn a small amount of interest to at least cover the cost of underwriting and funding the loan. The early exit fees will be clearly stated in the loan agreement that you sign with the lender and you can use this as a reference. For any bridging enquiries, you can speak to our award-winning customer service team on 0203 828 6879 or email us at bridging@maslowcapital.com What are bridging loans used for? What is the maximum LTV for a bridging loan? How much deposit do you need for a bridging loan?
How Is The Interest Repaid On a Bridging Loan?
Serviced Interest
Rolled-Up Interest
Retained Interest
How Can I Reduce The Fees On My Bridging Loan?
What Are The Fees if You Default On Your Bridging Loan?
Are There Early Exit Fees With Bridging Loans?
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