How to Compare Bridging Loan Offers
The lowest monthly rate is rarely the cheapest loan. This guide shows you how to compare offers on the total cost of credit and the net advance — so you can choose with confidence.
Total Cost of Credit, Not the Headline Rate
The monthly interest rate is the figure that grabs attention, but on a short-term loan it is only one input. The number that matters is the total cost of credit over your expected term — interest plus every fee, from arrangement to exit.
A loan at a slightly higher rate but with lower fees and no exit charge can easily beat a keenly priced headline once everything is counted. To count everything, you need to understand the components covered in bridging loan fees and how interest is charged.
Compare on the Net Advance
Restate each offer so it delivers the same net advance — the cash your transaction actually needs. Two facilities quoted at the same gross figure can leave very different amounts in your account once retained interest and deducted fees are applied.
Our guide to gross loan vs net loan walks through the arithmetic; the bridging loan calculator lets you line offers up side by side.
Fee Schedule Checklist
For each offer, confirm every line below in writing. Leave nothing blank — an unconfirmed fee is an open item, not a zero.
- —Monthly interest rate and whether it is fixed or variable
- —Interest structure: retained, serviced or rolled-up
- —Arrangement / facility fee (% of gross)
- —Valuation fee and who instructs it
- —Your legal costs and the lender's legal costs
- —Telegraphic transfer / drawdown fees
- —Exit fee and redemption administration fee
- —Minimum interest period and any early-repayment charge
- —Extension terms if you need more time
- —Default interest rate if the term is exceeded
- —VAT treatment of each professional fee
Indicative Terms vs Credit-Backed Offers
An early quote is usually indicative — a view of likely terms before underwriting. A credit-backed offer follows valuation, legal review and a credit decision, and is the figure you can rely on. Comparing an indicative quote from one source against a credit-backed offer from another is not a fair contest.
Ask where each offer sits in the process, and be alert to terms that can move between the two stages, particularly the loan amount, rate and fees. Underwriting can also surface title or planning points — the HM Land Registry record is one place such issues show up.
Common Comparison Mistakes
Treating unpublished fees as free
If an exit or legal fee is 'on application', get the figure before you decide. Assuming it is zero flatters the offer and can flip the ranking once it is confirmed.
Ignoring the term you will actually use
Cost depends on how long you hold the loan. Compare over your realistic term, and factor in minimum interest periods that can make an early exit cost more than expected.
Comparing gross to net
One offer's gross figure against another's net advance is not like-for-like. Restate both to the same net before you judge them.
Overlooking VAT
A fee shown excluding VAT looks smaller than one shown inclusive. Put every professional fee on the same VAT basis.
Weighing rate above deliverability
A marginally cheaper loan is no help if it cannot complete in your timescale. Speed and certainty have real value, especially on auction purchases.
Questions to Ask
- —Is this indicative or a credit-backed offer?
- —What is the net advance after all deductions?
- —What is the total cost over my expected term?
- —Which fees are deducted from the loan and which are paid separately?
- —Is there a minimum interest period or early-repayment charge?
- —What happens, and what does it cost, if I need an extension?
- —What could still change before completion?
Using the Calculator and a Market Comparison
Start by modelling each offer in the bridging loan calculator to see the net advance and total cost on a consistent basis. Then set the numbers against a broader view of the market. Auction timelines add another dimension — if you are bidding, read our guide to auction completion deadlines alongside the auction finance page.
We explain how we choose the specialists behind each comparison in how we select specialist brokers.
Reviewed by the 3 Trees Finance team. We help borrowers cut through headline rates and compare offers on what they will genuinely cost.
Information on this website is provided for general information only and does not constitute financial or legal advice.
Compare On
- —Total cost of credit
- —Net advance, like-for-like
- —Full fee schedule
- —Term you will actually use
- —Deliverability and speed
Ask Us to Review Your Proposed Terms
Send us the offers you are weighing up and we will help you restate them to the same net advance, total the true cost and flag anything left unconfirmed — working with specialist property finance professionals across the UK.
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Have Your Offers Reviewed
Share the terms you have received and we will help you compare them fairly. You can also contact us directly.