Headline rate can hide the bigger cost difference
Bridging loans can have very different fee structures. One lender may quote a lower annual rate but a much larger risk or setup fee. Another may have a slightly higher rate and a materially lower establishment cost.
The comparison becomes even more important when fees are added to the loan, because financed fees can themselves form part of the balance on which interest is calculated.
Compare the facility, not just the rate
When reviewing bridging options, consider:
Setup and risk fees
Percentage-based fees can be substantial on a large facility.
Interest allowance
A quote may include interest calculated or allowed for up to the maximum term. Check what happens if the loan repays earlier.
Early repayment treatment
Some lenders recalculate interest to the actual repayment date; others may have different contractual treatment.
Fixed costs
Valuation, legal, settlement, application and other fees can alter the comparison.
Exit conditions
A flexible sale process or realistic time frame can sometimes be worth more than a small rate difference.