Key facts: Standard bridging fees: arrangement 1–2% of the loan, valuation at cost, both sides' legal fees. The variable ones: exit fees (0–2% — many lenders charge none), minimum interest periods (commonly 1–3 months' interest even if you repay sooner), and extension fees if you overrun. Compare total cost to exit, never the headline rate.
The set-up fees
Arrangement (facility) fee: 1–2% of the gross loan, usually deducted from the advance — meaning you receive less than the headline figure, worth remembering when sizing the loan. Valuation: from a few hundred pounds for a desktop to four figures for complex security. Legals: bridging convention makes the borrower pay the lender's solicitor as well as their own — budget both. Broker fees, where charged, should be disclosed upfront.
Exit fees — the sleeper cost
Some lenders charge an exit fee of around 1% (occasionally more on development-style deals), some charge a flat admin fee to release the charge, and many charge nothing. On a £250,000 loan, a 1% exit fee is £2,500 — enough to flip a comparison between lenders. Ask directly: "what do I pay at redemption beyond the balance and accrued interest?" and get it in writing.
Minimum interest and early repayment
Bridging rarely has mortgage-style ERCs, but most facilities carry a minimum interest period — commonly 1–3 months. Repay in week three and you'll still pay the minimum. If your exit could land very early (an imminent sale), a lender with a 1-month minimum beats a cheaper rate with 3. After the minimum, interest typically runs only to redemption day.
The cost of overrunning
Pass the end of term and the schedule turns hostile: extension fees, re-arrangement charges, and default rates that can double the monthly cost. This is why term-setting is a fee decision — a 12-month term used for 7 costs little more than a 9-month term, but a 9-month term overrun to 12 costs a lot. Build the buffer in at the start; our worked examples show totals with realistic terms.
Getting the clean comparison
Demand a like-for-like "total cost to exit" from every quote — advance net of fees, interest to your realistic exit date, plus every redemption charge. A broker will normalise the quotes for you and flag the small print. Find a bridging specialist through Nesto — free, no obligation.
Frequently asked questions
Do all bridging loans have exit fees?
No — many lenders charge none. Where charged, expect around 1%, and factor it into any comparison.
What is a minimum interest period?
The shortest period you'll pay interest for regardless of early repayment — commonly 1–3 months. It matters when your exit could land fast.
Why do I pay the lender's legal fees?
Bridging convention — the borrower funds both sides' legals. Budget for two firms, and use a solicitor who does bridging routinely to keep the clock short.
What happens to fees if I extend?
Expect an extension fee and possibly a re-set arrangement fee, with rates stepping up. Avoiding overruns is the cheapest fee strategy there is.