Bridging loan fees:what you pay, when, and how to compare quotes
Bridging loan fees are the charges, on top of monthly interest, that you pay to arrange, run and repay a bridge, including the arrangement fee, valuation fee, legal fees, any exit fee and any broker fee. On a commercial bridge, they can add up to a meaningful share of the total cost, so it pays to understand each one.
In this guide we explain every fee you are likely to see on a commercial bridging loan, when it is paid and how it is calculated. We then show, with an illustrative worked example, why the lowest-looking monthly rate is not always the lowest total cost, and how to compare quotes properly.
Key takeaways
Bridging loan fees include arrangement, valuation, legal, exit, broker and extension fees, on top of monthly interest.
The arrangement fee is typically around 1% to 2% of the gross loan and is usually added to the loan.
Valuation and legal fees are often payable even if the loan does not complete.
Interest is usually the largest cost, so the length of time you keep the bridge drives the total.
Compare quotes on total cost over a realistic term, not on the headline monthly rate.
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What bridging loan fees should you expect?
Not every lender charges every fee, but this is the full list to ask about before you commit.
Fee
When paid
How it is usually calculated
Arrangement fee
On completion, usually added to the loan
Percentage of the gross loan, typically around 1% to 2%
Interest
Retained up front, rolled up, or monthly
Monthly rate on the loan balance
Valuation fee
Up front, before the valuation
Set by the valuer, scaled to value and complexity
Lender's legal fees
On completion, or up front if the deal aborts
Set by the lender's solicitor
Your legal fees
Agreed with your solicitor
Fixed fee or hourly
Exit fee
On repayment, where charged
Percentage of the loan or a set number of months' interest
Broker fee
As agreed in writing
Fixed or a percentage of the loan
Extension fee
If the term is extended
Set by the lender at the time
Monitoring surveyor
Per visit, on works projects
Set by the surveyor
Admin and transfer fees
Completion and redemption
Small fixed charges
How is the arrangement fee calculated?
The arrangement fee, also called a facility fee or lender fee, is the main charge for setting up the bridge. It is typically around 1% to 2% of the gross loan.
It is usually added to the loan rather than paid in cash, which increases the gross loan and the interest charged on it.
It is calculated on the gross facility, so on a works bridge it may be charged on the total including undrawn works funding.
It is normally non-refundable once the loan completes, even if you repay early.
For example, on an illustrative £500,000 loan, an arrangement fee of 1% to 2% is £5,000 to £10,000. Larger loans and lower LTVs can sometimes support a lower percentage.
Interest: the biggest cost of short-term finance
Strictly, interest is not a fee, but it is usually the largest part of what you pay. Bridging interest is quoted monthly, and you choose how to pay it:
Retained: deducted from the loan up front for the agreed term.
Rolled up: added to the balance and paid at the end.
Serviced: paid each month from your own funds.
Many lenders apply a minimum interest period, so repaying very early still costs a set number of months. Ask how unused retained interest is refunded if you repay before the term ends. Our guides to how bridging interest is calculated and retained vs rolled-up interest go into detail, and our rates page explains what drives pricing.
Have a deal in front of you?Send us the property and the numbers. We will tell you quickly whether it is fundable.
Valuation and legal fees: the up-front costs
These are the fees most likely to be paid whether or not the loan completes, so budget for them early.
Valuation fee
The lender instructs a RICS valuer, and you pay the fee before the inspection. The cost depends on the property's value, type and complexity. Trading assets such as hotels and care homes, or larger multi-let buildings, cost more to value. See our bridging valuation guide.
Legal fees
You pay for your own solicitor and for the lender's solicitor. Some lenders allow one firm to act for both, called dual representation, which can save cost and time. Complex titles, leasehold issues or multiple properties increase legal costs. Our bridging loan solicitors guide explains what each side does.
Exit, extension and default charges
Exit fee: some lenders charge a fee when the loan is repaid, often a percentage of the loan or a set number of months' interest. Many do not. A loan with no exit fee may carry a slightly higher monthly rate, so compare total cost.
Extension fee: if you need more time, a lender may extend the term for a fee, sometimes with a higher rate.
Default interest and charges: if the loan passes its end date unpaid, higher default interest and fees can apply until it is cleared.
Default terms rarely feature in headline comparisons, but they matter if your exit is at all uncertain. Read them before you sign, and see our guide to extensions and defaults.
Broker fees and other charges
Brokers are paid in different ways: a fee from you, a commission from the lender, or both. Whatever the arrangement, it should be disclosed and agreed in writing before you proceed. Ask when it is payable and whether any part is due if the loan does not complete.
Other charges you may see:
Monitoring surveyor fees on refurbishment loans, for each drawdown inspection.
Drawdown fees for each release of works funding.
Telegraphic transfer and redemption admin fees, usually small.
Title insurance where a title defect is insured rather than fixed.
Buildings insurance noting the lender's interest, including vacant property cover.
How to compare the total cost of two quotes
The headline monthly rate is only one input. Compare the total cost over a realistic term. The table below uses hypothetical figures, not market rates or a quote, on an illustrative £200,000 loan. Valuation and legal fees are assumed identical and left out.
Illustrative total cost
Quote A: lower monthly interest, higher fees
Quote B: higher monthly interest, lower fees
Monthly interest (hypothetical)
£1,400
£1,700
Arrangement fee
£4,000 (2%)
£2,000 (1%)
Exit fee
£2,000
None
Total over 6 months
£14,400
£12,200
Total over 12 months
£22,800
£22,400
Total over 18 months
£31,200
£32,600
Quote B is cheaper over a short hold, Quote A over a longer one. The right choice depends on how long you will really keep the loan. Model your own scenario with the bridging cost calculator.
How much would a 200k bridging loan cost?
There is no single answer, because cost depends on the monthly rate, the term and the fees. You can build your own estimate with this formula:
Interest: monthly interest on the loan multiplied by the number of months held, or the minimum period if longer.
Arrangement fee: typically around 1% to 2%, so £2,000 to £4,000 on £200,000.
Valuation and legal fees: quoted for your property and title.
Exit and broker fees, if any.
Add them together for the total. The single biggest lever is time: every month you keep the bridge adds another month of interest, so a well-prepared exit saves more than shaving a fraction off the rate.
How to keep bridging fees down
Lower your LTV where you can: lower LTV prices better and widens lender choice.
Present a clear exit with evidence, so more lenders compete for the case.
Prepare documents early to avoid paying for extra months while legals drag.
Choose a realistic term with headroom, rather than paying extension fees later.
Ask about dual representation to reduce legal costs.
Compare total cost, not the headline rate.
Our how it works page explains how we source and compare terms from our panel of lenders.
Unregulated commercial and investment bridging is arranged directly. Any case where the security includes a home you or an immediate family member occupies, including a flat above commercial premises, may be regulated and is introduced to a firm directly authorised by the Financial Conduct Authority. We are not directly authorised by the Financial Conduct Authority ourselves. Your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
Yes. Most commercial bridges carry an arrangement fee, typically around 1% to 2% of the loan, plus valuation fees and legal fees for both your solicitor and the lender's. Some lenders also charge an exit fee, and a broker fee may apply. All fees should be set out clearly before you proceed.
How much would a 200k bridging loan cost?
It depends on the monthly rate, the term and the fees. As an illustration, a 1% to 2% arrangement fee on £200,000 is £2,000 to £4,000. Add monthly interest for each month held, valuation and legal fees, and any exit or broker fee. Our bridging cost calculator lets you model this.
What are the downsides of a bridging loan?
Bridging costs more than long-term borrowing because it is priced per month and carries several fees. Up-front valuation and legal costs are at risk if the deal fails. If your exit slips, extension fees and default interest can add significantly to the total, and the lender holds a charge over the property.
What does Martin Lewis say about bridging loans?
We do not quote individual commentators. The general consumer guidance is that bridging is expensive and should be a short-term tool with a firm repayment plan. On fees specifically, the sensible approach is to ask for every charge in writing and compare the total cost, not just the monthly rate.
Can bridging loan fees be added to the loan?
The arrangement fee is usually added to the loan, and interest can be retained or rolled up. Valuation fees and some legal fees are normally paid up front. Adding costs to the loan increases the gross LTV and the interest charged, so check the net amount you will receive.
Do I get fees back if I repay early?
The arrangement fee is usually non-refundable. If interest was retained for the full term, many lenders refund unused interest, subject to any minimum interest period. Exit fees, where charged, normally apply whenever you repay. Check the early repayment terms before you sign.