Understanding the true cost of bridging finance is essential for making informed borrowing decisions. Whether you're exploring what a bridging loan is for the first time or comparing different bridging loan types, this guide breaks down the fee categories and cost structures associated with UK bridging loans.
How Mallard Bridging Pricing Works
At Mallard Bridging, all costs are rolled into one gross loan amount. You receive the net loan (the amount you need) and repay a single gross figure at exit. There are no monthly payments, no separate fee invoices, and no exit fees. Repay on or before the agreed date and a timely repayment discount applies.
Your indicative terms show the complete picture: net loan, all fees, total interest, and the gross repayment amount — so you know exactly what the facility costs before you commit.
The sections below explain the components that make up that gross figure, so you understand what's included.
Interest Charges: The Main Cost
Interest is the largest component of any bridging loan. Unlike standard mortgages with published rate tables, bridging finance rates are individually determined for each transaction.
Factors That Influence Your Rate
Every bridging loan is priced according to the specific circumstances of the deal. The key factors lenders assess include:
- Loan-to-value ratio (LTV) — lower LTV generally means more favourable pricing
- Property type and condition — standard residential attracts different pricing to unusual or commercial property
- Loan term and amount — shorter terms and larger facilities may be priced differently
- Exit strategy clarity — a confirmed exit (such as exchanged contracts) strengthens your position
- Charge position — first charge lending is priced differently to second charge
- Borrower profile — experience, credit history, and financial position all play a role
- Urgency — fast completions may carry different terms
Because each deal is assessed on its own merits, the only way to get an accurate cost picture is to request a personalised quote based on your specific situation.
How Rates Are Quoted
Bridging loan interest is typically quoted as a monthly percentage applied to the outstanding loan balance. This differs from standard mortgages, which quote annual rates. When comparing bridging finance to other lending, always ensure you're comparing like with like.
Your lender should provide a clear illustration showing the total interest payable over your expected loan term before you commit.
How Fees and Interest Are Charged
At Mallard Bridging, all fees and interest are rolled up into the facility. This means there are no monthly payments during the loan term — everything is repaid when you exit.
How Rolled-Up Interest Works
Interest accrues monthly and is added to the loan balance. When you repay the loan — whether through a property sale, refinancing, or other exit — you repay the original loan amount plus all accumulated interest and fees in a single settlement.
What This Means in Practice:
- You receive the full loan advance upfront (minus any third-party costs paid at completion)
- No monthly standing orders or payment obligations during the term
- All interest and fees are settled at exit
- Your total repayment amount depends on how long you hold the facility
- Maximum cash available from day one
- No monthly payment pressure on your cash flow
- Simple structure — one repayment at exit covers everything
- Particularly suited to business cashflow situations where monthly payments would defeat the purpose
Important Consideration: Because interest compounds over the term, the total amount owed grows each month. Your exit strategy must account for the full accumulated balance, not just the original loan. Your lender should provide a clear illustration showing projected balances at different points during the term.
Other Interest Methods in the Market
Some bridging lenders use different interest structures. For comparison:
- Monthly payments — interest paid by standing order each month, reducing total cost if you exit early
- Retained interest — interest for the full term deducted upfront from the loan advance, meaning you receive less cash initially
These methods are not available at Mallard Bridging but you may encounter them when comparing facilities from other providers.
Setup Fees
Also called arrangement fees, facility fees, or completion fees. These cover the lender's costs in establishing your facility, including underwriting, due diligence, administration, and credit checks.
At Mallard Bridging, setup fees are included in the gross loan amount — you don't pay them separately. They appear as a line item on your indicative terms so you can see exactly what's included, but the actual payment happens automatically when you repay the gross amount at exit.
Valuation and Legal Fees
Valuation and legal work are necessary parts of any bridging transaction. At Mallard Bridging, these costs are rolled into the gross loan amount — they appear as line items on your indicative terms but are not invoiced separately.
Valuation is typically carried out as a desktop valuation of the property being used as security. The complexity and type of property influences the cost, but you'll see the exact figure on your indicative terms before you commit.
Legal fees cover both the lender's solicitor (title investigation, charge documents, Land Registry work) and your own solicitor (reviewing loan documents, advising on terms, completion). Again, the lender's legal costs are included in the gross loan figure.
Exit Fees
At Mallard Bridging, there are no exit fees. You repay the gross loan amount and that's the end of the matter. Repay on or before the agreed date and a timely repayment discount applies, reducing your total cost further.
Some other lenders in the market charge exit or redemption fees — always check this when comparing facilities from different providers.
Broker Fees (If Applicable)
If using a bridging loan broker or packager, they will charge a separate fee for their services.
Typical Range: Broker fees represent a percentage of the loan amount, individually agreed with the broker before engagement.
Payment Timing: Usually payable at completion, often deducted from loan proceeds.
What Brokers Provide:
- Access to multiple lenders
- Rate comparison across the market
- Application management
- Document preparation
- Handling complexity on your behalf
When It's Worth It:
- Complex or unusual cases
- Non-standard properties
- Adverse credit history
- Significant time pressure
- Need to compare multiple lender options
Direct vs Broker: Going directly to lenders avoids broker fees but may mean fewer options or less market comparison.
Understanding Your Total Cost
The only number that truly matters is the gross loan amount — the single figure you repay at exit. This includes everything: the net loan you received, all setup fees, legal fees, and accumulated interest.
At Mallard Bridging, your indicative terms clearly show:
- Net Loan Amount — the cash you receive
- Setup Fees — rolled into the loan
- Legal Fees — rolled into the loan
- Total Interest Payable — based on your loan term
- Gross Loan Amount — the total you repay at exit
- Timely Repayment Discount — the reduction if you repay on time
This transparency means you can compare the total cost of borrowing before committing. Use our bridging loan calculator to get an instant estimate based on your loan amount and duration.
Comparing Different Structures
Two facilities with different headline rates may have very different total costs depending on:
- The setup fee included in the gross amount
- Whether a timely repayment discount is available
- The actual term you end up using
- How costs are structured (Mallard rolls everything into one gross figure)
Always compare on total gross repayment amount, not headline rate alone.
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What Happens if You Overrun
If you need to extend the term beyond the agreed period, additional interest continues to accrue and extension charges may apply. Many borrowers find it helpful to plan a realistic timeline with contingency — if a project might take 9 months, agreeing a 12-month term from the outset provides breathing space.
Default interest at a significantly higher rate applies if the agreed repayment date passes without settlement. This is a strong incentive to have your exit strategy firmly in place before drawdown.
How to Minimise Bridging Loan Costs
1. Improve Your LTV
Lower loan-to-value ratios generally attract more favourable pricing. Using a larger deposit or offering additional security can reduce your LTV and improve your terms.
2. Exit as Early as Possible
With rolled-up interest, the total cost increases each month you hold the facility. Repaying sooner means paying less interest overall. If your exit strategy allows, aim to settle the loan ahead of the agreed term.
3. Demonstrate a Clear Exit Strategy
Lenders offer better terms when confident you can repay. Strengthen your position with:
- A property already on the market with agent valuation
- A mortgage in principle for refinancing
- Exchanged contracts on a property sale
- Confirmed completion dates
4. Offer Strong Property Security
Standard properties in good locations with conventional construction attract better pricing than unusual or hard-to-value assets.
5. Provide Complete Documentation
Having all documents ready from the outset leads to faster approvals and can result in more favourable indicative terms overall.
6. Avoid Extensions
Build contingency into your timeline. Extensions cost money in both fees and additional interest. If you think a project might take 9 months, consider agreeing a 12-month term.
Common Questions About Costs
Are all costs negotiable? At Mallard Bridging, your indicative terms reflect the complete cost picture. If you have a strong LTV position, clear exit strategy, or repeat borrowing history, this may be reflected in more favourable terms.
Are fees added to the loan? At Mallard Bridging, yes — all costs are rolled into the gross loan amount. You don't pay anything separately. The gross figure on your indicative terms is exactly what you repay at exit.
What if my valuation comes in lower than expected? You may need a larger deposit, additional security, or you may need to walk away. Valuation fees are usually non-refundable.
Are there any hidden fees? Reputable lenders disclose all costs upfront in your offer document. If anything is unclear, ask before proceeding.
What if I repay early? With rolled-up interest, you only pay interest for the months you actually use the facility. Repaying early reduces your total cost since interest stops accruing once the loan is settled.
Mallard Bridging's Transparent Approach
At Mallard Bridging, we believe in complete transparency:
- All fees disclosed upfront in your initial quote
- No hidden charges or unexpected costs
- Clear cost illustrations before you commit
- Loans from £25,250 to £8,000,000 for business and investment purposes
- All fees rolled up — no monthly payments during the loan term
- No early repayment charges on most products
With Mallard Bridging, repeat clients could have funds in as fast as 24 hours; prepared new borrowers in as fast as 48 hours. All timelines are subject to satisfactory valuation, documentation, and legal process.
We provide a detailed, personalised cost breakdown so you understand exactly what you'll pay before proceeding.