Total cost of a commercial bridge

Expect an arrangement fee, usually a percentage of the loan, a valuation fee paid up front, the lender's legal costs and your own solicitor's costs. Some lenders also charge an exit fee on redemption, and a broker fee may apply. Each one is shown separately before you commit.

A low monthly rate with a high arrangement fee and an exit fee can cost more than a slightly higher rate with lower fees, especially on short terms. Comparing the total cost, and the cost per month you actually hold the loan, is the fair way to compare offers.

On most bridging loans interest is charged only for the months the loan is outstanding, often with a minimum period of one to three months. Retained interest that is not used is usually refunded on early redemption. Fees are not refunded, so they weigh more heavily on short terms.