5 clear reasons this list will save you thousands on bridging costs
If you want the short version: the difference between a 55% LTV and a 70% LTV can be the difference between paying £2,000 a month in interest and paying £3,500 a month for the same loan size. I sit with clients and explain the numbers plainly, because lender marketing hides the math in small print and friendly banners.
This list walks you through the real cost items lenders rarely shout about: headline rate versus monthly applied rate, arrangement and exit fees, valuation and surveyor charges, and the trap of rolled-up interest. Each item below includes real pound figures and simple examples I actually used with clients in the last 12 months. I’ll also play contrarian at times - saying when it makes sense to accept a higher rate, and when it absolutely does not.
Read this before you sign anything. If you’re comparing offers from brokers or direct lenders, use these rules to ask the right questions and spot the hidden costs that add hundreds or thousands of pounds to your deal.
Rule #1: Keep LTV under 55% if you want the best headline rates
Loan-to-value (LTV) is the single most powerful lever on a bridging deal. LTV is simply: loan amount divided by property value. Lenders price risk, and once you cross roughly the 55% mark many lenders jump rates materially.
Example: A client wanted a £300,000 bridge on a property valued at £545,000 (55% LTV). Two lenders offered 0.45% per month with a 2% arrangement fee - typical of best-in-market offers for that LTV. The same client asked for £300,000 but the valuation came back lower at £430,000 (70% LTV). The new offers were around 0.75% per month plus a 3% arrangement fee. At 0.45% monthly interest, the interest is roughly £1,350 per month. At 0.75% it’s about £2,250 per month - an extra £900 every month.
Do the math: on a 6-month bridge, that’s an extra £5,400 just in interest. Add the extra arrangement fee (the 1% difference on £300,000 is £3,000) and the total extra cost approaches £8,400. For many borrowers it’s preferable to reduce the loan size or add additional security to stay under 55% LTV and save thousands.
Contrarian view: if the bridging period is very short - say 6 weeks - and the opportunity return is greater than the marginal cost, it can make sense to accept higher LTV. But this requires tight certainty on exit timing and a clear figure for opportunity gain; otherwise you can pay dearly for optimism.
Rule #2: Always separate valuation fees from surveyor fees and negotiate both
Valuation and survey are different beasts. Valuation tells the lender the market value. A full survey is for you - it shows defects, repair costs and hidden liabilities. Lenders usually charge or pass on a valuation fee. You will often need a separate surveyor for due diligence. Treat them as separate line items in the budget.
Typical charges I see: lenders will levy a valuation fee starting at £95 for a desktop valuation, rising to about £500 for a full external valuation. Your independent RICS surveyor for a full building survey on a typical investment property will be between £400 and £1,200 depending on size and location. A client recently paid £500 to the lender for a valuation and £750 to an independent surveyor - total £1,250. That’s a significant up-front cost that some borrowers forget to budget.
Negotiation works. If lenders insist on an internal and external valuation, push back and ask if a desktop plus independent survey suffices. Brokers can sometimes get the lender to accept a £500 valuation rather than £1,250. If you’re arranging several deals a year, ask for a bulk discount or a cap on valuation fees in writing.
Contrarian view: a cheap survey isn’t always false economy. For short-term speculative flips where you have a trusted builder and a tight budget, a focused defect survey at £300 plus a lender valuation at £500 may be sensible. For historic or complex properties, spend the £1,000 on a proper survey to avoid a surprise £20,000 repair bill after completion.
https://www.iredellfreenews.com/lifestyles/2026/how-much-does-a-bridging-loan-cost-in-the-uk/Rule #3: Treat arrangement and exit fees like interest - they change the effective rate
Arrangement fees are commonly 1% to 3% of the loan. Exit fees and broker fees add more. Too many clients compare only headline monthly rates and miss these fixed charges. To compare correctly, convert fees into an annualised percentage of the loan for the expected term.
Example: a lender offers 0.5% per month with a 2% arrangement fee versus another offering 0.65% per month with 0.5% arrangement fee. On a £200,000 loan for six months, the first deal has interest of 0.5%*£200,000*6 = £6,000 plus arrangement fee £4,000 = total £10,000. The second deal: interest 0.65%*£200,000*6 = £7,800 plus fee £1,000 = £8,800. Even though the headline rate is lower on the first, the second is cheaper by £1,200 over six months. Always add fees into the cost equation.
Watch for rolled-up interest too - some lenders add interest to the loan balance rather than charging monthly. That increases exit costs because you pay interest on interest. If you see rolled-up interest, ask for an amortisation example: what you pay each month and what the final settlement will be.
Contrarian view: a higher arrangement fee can be worth it if the lower monthly rate reduces the cashflow burden during the term. For example, if you need the monthly cashflow for refurbishment, accept a 2% arrangement fee if it saves £700 each month in interest. It’s a cashflow-versus-total-cost decision; know which you prioritise.
Rule #4: Expect surveyor costs to move with property type and location - budget properly
Surveyors price by complexity and travel. A simple two-bed flat in city centre might cost £250 for a desktop plus £400 for a full report. A rural barn or listed building commonly pushes the independent surveyor cost to £900-£1,500 because of complexity. Don’t assume a flat £500 fee across the board.
Client example: a borrower budgeted only £500 for all valuation and survey costs on a three-property portfolio deal. The lenders required a full external valuation on each property at £400 each and the independent surveyors charged £650, £900 and £1,100 respectively. The total came to £3,450 instead of the expected £500. That wiped out the borrower’s contingency and forced a renegotiation of the project timeline.
Practical rule: get indicative survey quotes before you lock in an offer. If you’re buying unusual properties, add a £1,000 buffer per property. Speak to surveyors in the area; good local surveyors often quote cheaper because they know the stock and travel times. Don’t let lender-provided panels be your only option - you can often instruct your own RICS surveyor if you can persuade the lender they meet the criteria.
Contrarian view: sometimes a lender’s panel survey gives you faster completion which outweighs a slightly higher fee. If your refinance window is tight, paying an extra £200 to reduce time risk might be the smarter choice.
Rule #5: If a headline rate seems too good to be true, read the small print - and run the numbers yourself
Lenders advertise low monthly rates to get leads. Dig into the small print: are they adding a minimum fee, a required exit penalty, a title insurance charge, or restricting acceptable exit routes? I see '0.35% per month' offers that require a minimum monthly interest of £1,500 plus a 3% early repayment penalty if you exit before 12 months. That kills any benefit for shorter bridges.
Do the arithmetic. For a 4-month bridge on a £250,000 loan at 0.35% monthly with a 2% arrangement fee and 1% exit fee: interest = £3,500, arrangement = £5,000, exit = £2,500. Total cost £11,000 for four months. Divide this across months and effective rate is much higher than the headline. Convert it to an equivalent annual rate so you can compare to alternative finance such as a short-term mortgage or working capital facility.
Contrarian point: some 'too-good' deals are legitimate if you meet strict criteria - prime location, established track record, flawless documents, quick exit. If you are a repeat borrower with strong relationships, those deals can be a real saving. For everyone else, be sceptical and model the worst-case three- to six-month scenario before committing.
Your 30-Day Action Plan: Implement these bridging rules and lock real savings
Day 1-3: Gather numbers
Collect the property valuations, your target loan amount, and any quotes you’ve received. Note any lender fees quoted in pounds and percentages. If you don’t have a valuation yet, budget £500 for a lender valuation and £600 for an independent survey as a starting point.
Day 4-10: Run three scenarios
Scenario A: Stay under 55% LTV. Scenario B: Accept 60-70% LTV. Scenario C: Short-term higher LTV with quick exit. For each, calculate: monthly interest, arrangement fee (in £), expected survey/valuation costs, and exit charges. Convert total cost into a single figure for the expected term. Use a spreadsheet - it takes 30 minutes.
Day 11-20: Negotiate fees
Ask lenders to confirm valuation fee caps and whether an independent surveyor will be accepted. Negotiate arrangement fees and push to have them reduced by 0.5% if you’re a repeat borrower. Get fee commitments in writing. If a lender insists on expensive surveyors, request a list of acceptable alternatives and call them directly for quotes.
Day 21-27: Stress-test your exit
Plan the exit route and model a 4-week delay. If your exit depends on a sale, estimate a 5% difference in achieved price and see how that affects your LTV and final repayment. If refinance is the exit, get provisional offers in writing from your chosen follow-on lenders so you don’t rely on verbal promises.
Day 28-30: Decide and document
Choose the option that balances total cost and cashflow needs. Sign agreements only after re-checking the valuation and survey costs. Keep copies of fee quotes, and confirm the lender will not add surprise fees at completion. If you followed the rules above, you will either: secure sub-55% pricing and save thousands, or know exactly why a higher-cost path is still the right choice.
Final note: bridging finance is useful, fast and flexible, but it is not free. Use these five rules, run the numbers in pounds, and be sceptical of headline rates. When you speak with brokers or lenders, ask them to show the full cost in £ for your expected term. If they can’t or won’t, treat their offer as marketing noise.
Typical Item Low High Typical Impact (£ on £200k loan, 6 months) Lender valuation £95 £500 £500 Independent survey £300 £1,200 £750 Arrangement fee 0.5% (£1,000) 3% (£6,000) £3,500 Monthly interest (0.45% vs 0.75%) 0.45% pm 0.75% pm £1,800 difference over 6 months