Bridging Loan Rates and Fees: The Term Sheet Decoded
Property Lending
Bridging loan rates · Term sheet lines · Comparison rate
Bridging loan pricing has three moving parts, and a term sheet almost never explains how they interact. This page reads every line using figures Australian lenders published on the day it was written, whether you are still deciding, holding a term sheet, or already in a bridge that has run longer than planned.
Quick Answer
Bridging loan pricing has three parts that move independently: the rate, the fee stack, and how interest is charged during the term. The lowest rate is often not the lowest total. Settle the instrument choice first, then read the term sheet line by line.
Also searched as: bridging loan interest rate, bridging finance rates, bridging loan term sheet, comparison rate on a bridging loan.
What does a bridging loan cost in Australia right now?
A bridging loan costs a rate, plus a fee stack, plus an interest treatment, and the three are priced separately by lane. Across 15 Australian lender pages read at source on 15 September 2026, the non-bank lane published rates from 6.31 per cent to 9.24 per cent per annum with most of the sample between 8.29 and 8.99, the bank lane published 9.28 per cent to 9.42 per cent on the three products that publish a rate at all, and on the private business purpose lane one funder published from 8.07 per cent prepaid while the other quotes the rate on conditional approval. Every band on this page is drawn from the pages linked beneath the tables, on that date, and none of it is an offer.
Which lane can take you at all is a different question from what it costs, and it is answered first in the guide to bridging loans without a bank. This page assumes you know which lane you are in and are holding a quote, a term sheet or a rate you cannot make sense of.
One note on where the evidence comes from, because it shapes what this page can and cannot show. Rate sheets are published across all three lanes, but facility terms are published on only one of them. The bank lane puts its general terms online in full, the non-bank lane publishes rates and a fee schedule without them, and the private lane publishes neither a rate nor its terms. So where this page quotes a contractual mechanic rather than a price, the readable source is a bank document, and the mechanic is stated as a bank lane mechanic rather than as a market rule. The absence of published terms on the other two lanes is itself one of the findings.
That last point is the one most cost comparisons get wrong. A lane with no published rate is not a lane with a hidden rate, it is a lane where the rate is an output of the security, the exit and the term rather than a shelf price. It is also why a table of rates alone cannot rank the three lanes against each other.
| Lane | Published rate band | Comparison rate published | What you pay during the term |
|---|---|---|---|
| Non-bank bridging | 6.31 to 9.24 per cent per annum across the five products that publish a rate, with most of the sample between 8.29 and 8.99 per cent. Two of the 7 lenders read publish no rate on their bridging page | ✓ Yes, 6.35 to 8.62 per cent, and on three of the five it sits below the bridging rate | Usually nothing. Interest is funded from an interest budget inside the approved amount, or capitalised to the balance |
| Private, business purpose | Mostly not published. One funder publishes from 8.07 per cent prepaid and from 8.22 per cent capitalised; the other quotes the rate on conditional approval | One published pair, 6.88 and 6.90 per cent. A facility written on a business purpose declaration sits outside the Code, where no comparison rate is required at all | Nothing. Interest for the term is either deducted at settlement or capitalised to the balance |
| Bank bridging, shown for comparison only | 9.28 to 9.42 per cent per annum on the three products that publish a rate, one of which increases by 1.00 per cent after the first 3 months. Two major banks publish no rate on their bridging page at all | ✓ Yes, 9.10 to 9.24 per cent, below the bridging rate on all three | Usually nothing on the capitalised products. One major bank requires interest only payments across the bridging period |
Sources: non-bank rates from the Bridgit rates and fees page, La Trobe Financial bridging page, Brighten bridging page, Well Money bridging page (rates stated as at 15 May 2026) and the loans.com.au bridging page (rates stated as at 10 September 2026), with the MA Money broker bridging page and ORDE bridging page publishing no rate; private rates from the Assetline Capital bridging page, with the Funding.com.au bridging page quoting on conditional approval; bank rates from the Westpac bridging page, the St.George relocation loan page and the Bank of Melbourne relocation loan page, with the Commonwealth Bank bridging page and the ANZ bridging page publishing no rate; all read 15 September 2026. Lenders are named here because a source cell is the one place a lender may be named.
Every figure above is a lender published figure read on 14 September 2026 and is indicative only. Rates on this lane reset without notice, one of the products read carries an explicit "subject to change without prior notice" stamp, and none of these is a quote or an offer to you.
Which cost question are you actually asking?
People arrive at a bridging cost page from four different places, and the cheapest answer is different in each. Find your row before you read the rest.
| Where you are | The cost question that actually applies | Where it is answered |
|---|---|---|
| Still deciding whether to bridge at all | Total dollars over your realistic term, plus the duplicate holding costs no lender funds | Working out your own number, then what holding two properties adds |
| A term sheet is in front of you | Which lines are schedule items, which are priced to your file, and what happens at payout | The fee names, the interest treatment and what moves |
| A bank declined and you have been offered a private bridge | Whether the fee stack is ordinary for that lane, and what protections you give up outside the Code | The comparison rate and what caps the price |
| The bridge is already running and the property has not sold | Extension pricing and the default rate, the only two costs on this lane nobody publishes | If the property does not sell in time |
How do you work out what a bridging loan will cost you?
Interest for your own term, plus the fee for writing the facility, plus the exit lines, and nothing converted back to a percentage until the end. Work it out in five steps and do it in dollars rather than in per annum percentages, because the fee stack is what reverses the ranking between two offers. The arithmetic below is the same one a broker runs on a term sheet and it takes about ten minutes with a calculator. A single facility with the interest compounding month by month, worked to the dollar, is in what capitalised interest costs on a bridge.
- Size the facility, not the loan. Add the balance owing on your existing loan, the purchase price of the new property, and purchase costs. Subtract any cash or deposit you are contributing. That figure is what the lender prices, and it is the figure the maximum LVR is measured against.
- Add the interest treatment to the facility if it sits inside it. An interest budget and capitalised interest are borrowed money and increase the amount you are charged on. Prepaid interest does the opposite: it comes out of the advance, so you receive less than the face amount.
- Calculate interest in dollars for your realistic term, not the maximum term. Facility size, multiplied by the rate, multiplied by months divided by twelve. If the rate steps up after a set period, run each period separately and add them.
- Convert every fee to a dollar figure. A percentage establishment or application fee is the line that moves most, so multiply it out. Then add document, settlement, valuation, legal and discharge fees, and count the discharge once per settlement activity rather than once per loan if the schedule says so.
- Add the costs the lender does not fund. A second set of council rates, insurance, utilities and any strata levies for every month both properties are held. That total, not the interest figure, is the real cost of a slow sale.
The output is one number per offer, in dollars, over your term. That is the only figure that ranks two term sheets, and the worked examples below show it reversing the order the advertised rates put them in. Run it again at a longer term as well, because a bridge that takes 9 months instead of six does not cost fifty per cent more, it costs fifty per cent more interest on top of a fee stack that did not change.
Why can a comparison rate be lower than the bridging loan rate?
A comparison rate can sit below a bridging loan rate because it is not a rate on your bridge at all: it is a rate calculated on a hypothetical loan of a stated size over a stated term, and on bridging products that term is often 25 years. Regulation 71 of the National Consumer Credit Protection Regulations 2010, headed "Comparison rate", requires that the rate "must be accompanied by a statement of the amount of credit on which it is based and the term for which credit is provided". One Australian bridging lender discloses its comparison rate as "based on secured credit of $150,000 and a term of 25 years". A bridge does not run for 25 years. The comparison rate is describing something else.
The widely repeated claim that comparison rates sit higher than the headline rate because fees are added is wrong as a general statement about this lane. Of the five Australian bridging products read on 14 September 2026 that published both a rate and a comparison rate, three disclosed a comparison rate above the rate and two disclosed one below it. A comparison rate falls below the headline rate whenever a short high rate is blended into a longer, lower ongoing rate across the disclosure term.
Two published pairs that point in opposite directions
- 8.99%bridging rate against a 7.93 per cent comparison rate on a 12 month owner occupied product, because the bridge rate blends into a lower ongoing rate over the disclosure term. Bridgit rates and fees page, read 15 September 2026
- 8.29%variable rate against an 8.62 per cent comparison rate, disclosed on secured credit of $150,000 over a 25 year term. La Trobe Financial bridging page, read 15 September 2026
Lender published figures read at source on 14 September 2026, indicative only, not offers, and subject to change without notice. A comparison rate is not the rate you will pay. General information only.
There is also a legal point worth getting right, because the retrieval layer currently gets it wrong. No regulator prescribes $150,000 over 25 years. Regulation 71(10)(a) requires only that, in an advertisement, "the amount of credit and term are to be typical of the type of credit contract offered in the advertisement". The $150,000 over 25 years figure is a home loan convention that satisfies "typical", not a mandated number, and applying a home loan convention to a bridging product is exactly how a comparison rate stops describing your loan.
Regulation 71(11) also requires a specific written warning when a comparison rate is given to a borrower before a contract is entered into, and it says in terms that "Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan". Read that as the regulation telling you the number is incomplete on purpose.
Two limits on all of this. The obligation is a consumer credit one: ASIC states that Part 10 of the National Credit Code requires a comparison rate when a lender advertises fixed term credit that is for, or mainly for, personal, domestic or household purposes. A business purpose bridge written on a section 13 declaration sits outside the Code, and there is no comparison rate on it at all. Source: National Consumer Credit Protection Regulations 2010, Compilation No. 56, compilation date 1 November 2025, read at the Federal Register of Legislation on 14 September 2026; ASIC National Credit Code guidance read at source the same day.
What fees do bridging lenders charge?
Banks charge a flat dollar fee for writing a bridging facility, $600 on the three schedules published, while non-bank lenders charge 0.60 to 2 per cent of the loan and private funders charge a percentage they do not publish, which is why the same charge is a few hundred dollars on one sheet and five figures on another. Three names, largely one charge: it is called an establishment fee in the private lane, an application fee by several non-banks, and a lending establishment fee by the banks, and the difference between the names is smaller than the difference between how they are calculated.
A risk fee is a separate line again. It is a charge for the lender carrying a file it prices as higher risk, it is usually a percentage, and it is not universal: one non-bank bridging product read on 14 September 2026 publishes a risk fee of nil. When a risk fee is charged, it is the line most worth asking about, because it is priced to your file rather than set by a schedule. There is a useful cross-check in what a caveat loan actually costs, where the same naming problem appears on a different instrument.
| Charge | Bank lane, comparison only | Non-bank lane | Private, business purpose |
|---|---|---|---|
| Fee for writing the facility | $600, flat, on the three bank products that publish a schedule | 0.60 to 2 per cent of the loan | A percentage of the facility, quoted per file. Neither funder read publishes it |
| Document preparation or processing | $100 | $770 on one product, from $150 on another | Not published. Sits inside the legal line below |
| Risk fee | Not charged | Published as nil on the one product that names it | 0.75 per cent on the one funder that publishes a fee |
| Ongoing account fee | $8 a month | Published as nil on one product, not published on the rest | Not charged. The cost sits in the interest taken at settlement |
| Valuation | Not published as a figure. One fee schedule says it is the external valuer's fee | From $220 on one sheet and $230 for a metro property under $1 million on another. A third lender pays up to $300 of it | At cost, not published |
| Legal | Not published on the products read | Not published on the products read | Quoted per file, plus GST and outlays |
Sources: bank column from the Westpac home loan fee schedule, matched on the St.George relocation loan page and the Bank of Melbourne relocation loan page; non-bank column from the Bridgit rates and fees page (set-up 0.60 per cent, document preparation $770, valuation from $220, discharge $450), the La Trobe Financial bridging page (application fee 1.25 per cent, risk fee nil), the loans.com.au bridging page (set-up 2 per cent, security assessment $230, monthly fee nil) and the Well Money bridging page (loan processing from $150, up to $300 of the valuation paid); private column from the Assetline Capital bridging page (fixed risk fee 0.75 per cent); all read 15 September 2026. What a private funder charges to write a facility, and what reaches you after it, is in private bridging loans for business.
All figures are lender published and were read at source on 14 September 2026. They are indicative, they change without notice, and the fee actually charged on a file depends on lender policy and your circumstances at the time of application.
One fee can be lost before the facility is even used. Published bank bridging general terms read on 14 September 2026 require the loan to be drawn within a set period after the acceptance date, 120 days on the document read, and provide that if it is not drawn the lender may treat the contract as ended and keep the loan application or establishment fee. A bridge arranged early against a purchase that slips can therefore cost the establishment fee and deliver nothing. If the purchase timetable is uncertain, ask what the drawdown window is and what happens to the fee if it passes.
Is bridging loan interest prepaid, budgeted or capitalised?
Australian bridging lenders use all three treatments, and none of them requires a monthly repayment, so what separates them is the amount owing on the day you discharge. Prepaid interest is taken out of the advance at settlement, an interest budget is added to the approved amount so the facility funds its own interest, and capitalised interest is added to the balance as it accrues. Borrowers treat them as interchangeable because the monthly experience is identical. They are not, and the difference lands at payout.
| Line | Prepaid interest | Interest budget | Capitalised interest |
|---|---|---|---|
| Where the money starts | Deducted from the advance at settlement | Added to the approved loan amount before settlement | Nowhere. It is added to the balance as it accrues |
| What you receive on the day | Less than the face amount | The face amount, with the budget sitting behind it | The face amount |
| Monthly repayment | None | None | None |
| Maximum period published | Up to 1 year on the private product read | Up to 2 years on the non-bank product read | Up to 1 year on the private product read, up to 12 months on the bank product read |
| If the property sells early | Depends entirely on the payout clause. Not published by any lender in the sample | Unused budget was never drawn, so it is not owed | Interest stops accruing on discharge, so the saving is automatic |
The prepaid row is the one to argue about before you sign. A claim circulating widely on this topic is that unused prepaid interest is simply refunded to the borrower. Not one of the eight Australian lender documents read at source for this page on 14 September 2026 says that, and not one says the opposite either. Two published positions are in circulation, that unused prepaid interest is refunded and that it is applied to the loan balance in the payout calculation, and they produce different money at settlement. Neither is a market rule. The payout clause in your own term sheet is the only source that answers it, and it is a fair question to ask a lender in writing before the facility is documented.
Two further points the term sheets leave out. The first is vocabulary: prepaid and capitalised interest are both described internationally as retained interest, so a search on that phrase returns overseas material rather than an Australian product, and no Australian sheet read for this page uses the term. The second is that a fixed rate changes the early sale arithmetic again. Published bank general terms read on 14 September 2026 treat paying out all or part of a fixed rate loan early, expressly including when you sell the property, as an event that triggers economic costs, calculated on the change in the lender's cost of funds over the remaining fixed period. On a fixed rate facility that is a fourth cost of selling early, and it is separate from the prepaid interest question entirely.
The interest budget row is cleaner and less understood. One non-bank publishes that "an interest budget is incorporated into the approved loan amount to cover loan repayments during the bridging period", with the budget period set to suit the applicant up to a maximum of 2 years. Because the budget is drawn as the interest falls due, an early sale simply means part of it is never drawn. The same lender publishes that no early repayment fee applies on partial discharge of existing security. Capitalisation on a development facility behaves differently again, and that is covered where it belongs, in capitalised interest and loan to cost.
Is there a minimum interest period on an Australian bridging loan?
There is no minimum interest period on an Australian bank bridging loan, but there is an equivalent effect on a private one. Bank bridging products read on 14 September 2026 charge interest as it accrues over a term of up to 12 months, allow extra repayments, and publish no minimum charged term and no early repayment penalty on the bridging component. A widely surfaced answer states flatly that there is no mandatory minimum interest period on an Australian bridging loan, and for the products it is drawn from, all of them banks, that answer is correct. What happens to the unused interest when the property sells ahead of the term is in sold early or sold for less.
It stops being correct the moment you cross into the private lane, and the mechanism is not a penalty clause. One private lender publishes that "interest for the first loan is deducted at settlement. This means clients do not make repayments throughout the loan term." Interest for the whole term leaves the advance on day one. If the term is 3 months and the property settles in 7 weeks, the money for the remaining weeks has already gone, and whether any of it comes back is the payout clause question in the section above. That is how a 2 month bridge can cost 3 months, without any document ever using the phrase minimum interest period.
Two private lenders do publish the term outright, which settles the point. Of the documents read on 14 September 2026, one private lender discloses that a minimum interest period applies and that the borrower receives a pro rata credit on early repayment subject to that minimum, and a second discloses a minimum interest period in similar terms. So the correct Australian answer is not that minimum interest periods do not exist here, it is that they are a private lane feature, disclosed by some lenders and produced by the deduction mechanism in others, and absent from the bank lane entirely. A general answer drawn only from bank products will tell you the opposite.
The phrase itself is largely imported. Search demand for it in Australia is negligible and its keyword family carries clearly British variants, which is a reason to expect any generic answer to it to describe a market that is not this one. The related question of how fast a facility can settle, and what speed costs, sits in the fast settlement finance guide rather than here.
What is the default interest rate on a bridging loan?
No Australian bridging lender publishes a default margin in any document read for this page, so any specific figure you see quoted for this lane is a generalisation rather than a disclosure. That claim survived a deliberate test: published bank general terms read on 14 September 2026 name default interest charges in their own definition of the total amount owing, and still put no rate or margin against them anywhere in the document. The charge is contemplated and left unpriced, which is not the same thing as not existing. What is worth knowing is where the ceiling sits, and the answer is different in each of the three lanes. This is the part of bridging loan pricing that almost nothing on the topic reaches.
For a consumer credit contract, the National Credit Code caps the annual cost rate at 48 per cent. Division 4A of the Code is headed "Annual cost rate of certain credit contracts" and section 32A is headed "Prohibitions relating to credit contracts if the annual cost rate exceeds 48%". The annual cost rate is a whole of cost measure, not just the interest rate, so establishment and other credit fees are inside it.
And bridging is expressly carved out of that cap. Section 32A(4) provides that the section does not apply if the credit provider is an ADI or the contract "is a low cost credit contract, small amount credit contract or bridging finance contract". A bridging finance contract is a defined term: section 204(1) of the Code provides that a credit contract is one where, when the contract is made, the debtor "reasonably expects to receive a lump sum before the term of the contract ends" and "intends to discharge the debtor's obligations under the contract so far as possible with that sum", and "the term of the contract is 2 years or less". So a genuine bridge, even a regulated consumer one, is not subject to the 48 per cent ceiling. That is a deliberate policy choice, not an oversight, and almost no page on this topic mentions it.
What survives is the unconscionability jurisdiction. Section 78 of the Code, headed "Court may review unconscionable interest and other charges", lets a court annul or reduce an establishment fee or charge, a fee or charge payable on early termination, a fee or charge for a prepayment, or a change to the annual percentage rate, where it is unconscionable. Sections 76 and 77, headed "Court may reopen unjust transactions" and "Orders on reopening of transactions", sit alongside it. Those are remedies after the fact, applied by a court, not a price cap.
On a business purpose private bridge, none of the above applies. ASIC states that the Code applies where the debtor is a natural person or strata corporation and the credit is provided wholly or predominantly for personal, domestic or household purposes, or to purchase, renovate or improve residential property for investment purposes. Business purpose credit on a section 13 declaration falls outside it, and the form that declaration has to take is prescribed by regulation 68 of the National Consumer Credit Protection Regulations 2010, headed "Declaration of purposes for which credit provided", rather than being a free text sentence a lender can draft as it likes. so there is no 48 per cent cap, no comparison rate obligation and no section 76 to 78 remedy. What does survive outside the Code is the unfair contract terms regime in the Australian Securities and Investments Commission Act 2001, which since November 2023 reaches small business contracts, and it is narrower than it sounds. A 2024 Supreme Court of Queensland decision on a private lender's letter of offer held that the protection did not apply at all, because the document had been negotiated back and forth through the borrower's broker and so was not a standard form contract, which is the threshold the regime turns on. Negotiating your term sheet is worth doing on the price, and it can also remove the statutory argument you might later want. The price discipline in that lane is the term sheet and your leverage before you sign it, which is why planning the exit from a short term facility matters more there than anywhere else. Source: National Consumer Credit Protection Act 2009, Compilation No. 52, compilation date 1 July 2026, read at the Federal Register of Legislation on 14 September 2026.
What are the exit fees on a bridging loan?
Exiting a bridging loan costs a discharge fee of $350 to $450 on the products read on 15 September 2026 and a valuation or security assessment from $220, while private lane legal costs are quoted per file, and no lender in the sample publishes a price for an extension at all. The exit is the least quoted part of a bridging facility and the part most likely to surprise, because most of it is charged per event rather than per loan. A discharge is billed per settlement activity on at least one product read, which means a bridge that discharges two securities on 2 days is charged twice.
Exit lines, as published, read at source 14 September 2026
- $350discharge fee per settlement activity on the bank lane products read, so a two stage discharge is charged twice. Westpac home loan fee schedule, read 15 September 2026
- $450discharge fee on the residential non-bank product read, against $385 on the same lender's commercial bridging product. Bridgit rates and fees page, read 15 September 2026
- $230security assessment fee for a metro property under $1 million on one non-bank sheet, against a valuation from $220 on another. loans.com.au bridging page, rates stated as at 10 September 2026, read 15 September 2026
Lender published fee schedules read at source on 14 September 2026, indicative only, not offers, and subject to change without notice. Extension pricing is not published by any lender in the sample and is negotiated at the time. General information only.
An early termination fee is a different thing from a discharge fee, and on a regulated residential loan it is largely prohibited. ASIC states that from 1 July 2011 the National Consumer Credit Protection Regulations prohibit early termination fees for residential loans, subject to limited exceptions, and that its guidance on when such a fee is unconscionable applies to contracts entered into before that date and to fees the regulations do not prohibit, such as break fees. That is a consumer credit protection, so it reaches a regulated residential bridge and does not reach a business purpose bridge written on a section 13 declaration. It also does not reach the discharge, settlement and legal fees above, which are charges for work done rather than fees for ending the contract early. Source: ASIC Regulatory Guide 220, issued 9 November 2023, read at source 14 September 2026.
From our broking, the legal line is the one we see move most on a private sheet, because it is quoted as a base plus outlays rather than as a fixed number, and the outlays depend on how many titles, consents and existing mortgagees are involved. Extension fees are not published anywhere in this sample, which in practice means they are set at the point you need one, when your leverage is lowest. Agreeing an extension basis before settlement, not after, is the single cheapest thing a borrower can do on this lane. Building the discharge sequence into the exit strategy at the start is the other.
What does a bridging loan cost if the property does not sell in time?
Nobody publishes the answer, and that is the finding. When a bridging facility reaches the end of its term with the property unsold, one of two things happens: the lender extends it on terms priced at that moment, or the loan moves to its default rate. Not one of the eight Australian lender documents read at source on 14 September 2026 publishes a price for either. Every other cost on this lane is disclosed in advance, and the two that only apply when the plan slips are set when your leverage is at its lowest. What the lender does on the maturity date, in order, is the bridging loan expired and not sold guide's question.
That asymmetry is the strongest argument for negotiating the term rather than the rate. A 6 month facility extended twice can cost more than a 9 month facility written at the start, because the extension is repriced each time and the original fee stack is never refunded. Where an interest budget was sized to the original term, it runs out at the same moment, so the facility that required no repayment for 6 months can start requiring one in month seven.
On the bank lane there is a second exposure, and it is one the rate sheet cannot show. Bank bridging is often written as a credit limit on an account rather than as a term advance, and the published general terms read on 14 September 2026 allow the lender to reduce or cancel that limit at any time, whether or not the borrower is in breach, with 30 days' notice in the ordinary case and less where the lender is managing an immediate risk. If the limit is cancelled it falls to zero, the total amount owing becomes payable, and failing to pay it is itself an event of default. The same document gives at least thirty 1 days to remedy a default notice and makes the borrower liable for the lender's reasonable enforcement expenses. None of that appears on a rate sheet.
What the law does here depends on which lane you are in, and it is thinner than most borrowers assume. On a regulated consumer bridge the 48 per cent annual cost rate cap does not apply, because a bridging finance contract is carved out of it by section 32A(4), so the ceiling is the unconscionability jurisdiction in sections 76 to 78 rather than a number. On a business purpose bridge written on a section 13 declaration there is no cap, no comparison rate and no statutory reopening remedy at all. In both lanes the practical protections are contractual and they are agreed before settlement: the extension basis, the default margin, whether default interest applies to the whole balance or only the arrears, and whether the payout figure is calculated to the day.
This section answers the cost question only, which is what the two unpublished lines are worth and why they behave the way they do. What to actually do when a bridge is running and the sale has gone quiet, whether to reprice the property, take the extension, refinance to a term facility or let the lender run its process, is a different decision with a different set of trade-offs, and it does not belong on a pricing page. The one pricing-adjacent point worth making here is that the cheapest version of every option above is the one arranged before the term ends rather than after it. Where the exit is a handover to longer term debt, that route is set out in moving a short term facility to a term loan.
What is the 80 per cent LVR measured against?
Maximum bridging LVRs published on 14 September 2026 ran from 70 per cent to 85 per cent, and 80 per cent means different things because the two numbers in the ratio are not defined the same way across lanes. The spread inside that range is driven less by risk appetite than by what each lender puts in the denominator and what it counts in the numerator.
Three things move it. First, whether the ratio is measured against the combined value of both properties or only against the property being retained. Second, whether the interest treatment is inside the numerator: an interest budget added to the approved amount is borrowed money, so a facility with a 2 year budget is a larger loan against the same security than the same facility with monthly interest. Third, whether the security is residential, commercial or residual stock.
| Security and term | Published maximum LVR | What that implies |
|---|---|---|
| Residential, owner occupied, 12 month term | 85 per cent | The highest published figure on the sheet, and the shortest term |
| Residential, 24 month term | 80 per cent | A longer term buys less leverage, because a longer interest budget sits inside the loan |
| Commercial security | 75 per cent | Valuation is more contested, so the discount is applied to the ratio rather than to the rate |
| Residual stock | 70 per cent | Unsold stock is priced as a sale risk, not as a property |
Sources: all four figures from the Bridgit rates and fees page, read 15 September 2026, which publishes 85 per cent on the 12 month residential product, 80 per cent on the 24 month, 75 per cent on commercial bridging and 70 per cent on residual stock. Lenders are named here because a source cell is the one place a lender may be named.
The consequence is practical rather than technical. An offer at 80 per cent measured one way can advance less money than an offer at 75 per cent measured another, so the LVR headline ranks offers no better than the rate headline does. Ask each lender what goes in the numerator and what goes in the denominator before comparing the two figures. How the underlying debt figures are constructed, and the definitions of the debt at its peak and the debt that remains, belong to the instrument comparison guide, which sets them out in full.
What happens if the valuation comes in below the bridging loan term sheet?
A low valuation does not usually change the rate, it changes how much the lender will advance, because the maximum LVR is applied to the valuation rather than to the price you agreed. On a bridge the effect is doubled, because the ratio is measured against the debt while both properties are held, so a shortfall on either the property you are buying or the one you are selling moves the same number. The gap has to be closed with your own cash, a smaller facility or a different lender, and each of those costs something. The options once the number lands short, in the order of what each costs you, are in what to do about a valuation shortfall at settlement.
Two things in published bank general terms read on 14 September 2026 are worth knowing before the valuation is ordered. The first is that the lender obtains the valuation for its own use and states in terms that it should not be relied on by the borrower or anyone else, so a number that disappoints you is not a report you can take somewhere and reuse. The second is that the loan will not proceed if the valuation or the lender's searches are not satisfactory to it. A valuation is therefore a condition, not a formality, and the fee for it is usually already spent by the time you see the result.
| What changes | Why it changes | What it costs |
|---|---|---|
| The amount advanced | The maximum LVR applies to the valuation, not the contract price | The shortfall, in cash, at settlement |
| The LVR you were quoted | On a bridge the ratio is measured against the debt while both properties are held, so either valuation moves it | An offer at the same headline LVR now advances less |
| The fee already paid | Valuation is charged when it is ordered, not when it is accepted | From $220 per valuation on the non-bank lane, at cost with no published cap on the private lane |
| Going to another lender | The valuation belongs to the lender that ordered it and is not transferable | A second valuation fee, and a second application fee if the first is not refunded |
| The timetable | A review or a re-valuation runs while the purchase contract keeps running | Whatever the contract says about late settlement, plus another month of holding costs |
The cheapest protection is ordering the valuation early rather than late, because the cost of a shortfall is almost entirely a function of how little time is left to solve it. Where speed is the reason the facility is being written in the first place, that trade-off is set out in the fast settlement finance guide.
What does a $900,000 bridging facility held for 6 months actually cost?
A $900,000 bridging facility held for 6 months costs about $45,738 in the bank lane and about $48,555 in the non-bank lane on rates and fees published on 14 September 2026, so the lane with the higher advertised rate is the cheaper one. Interest is calculated as simple interest on the full facility for the period shown; compounding on the capitalised structure is not modelled, and neither is valuation or legal on the non-bank example, because that lender does not publish them. Both figures are illustrative arithmetic, not quotes and not offers.
| Line | Non-bank lane | Private lane, business purpose | Bank lane, comparison only |
|---|---|---|---|
| Advertised rate | 8.29 per cent per annum | 8.07 per cent per annum, prepaid | 9.42 per cent per annum, increasing by 1.00 per cent after the first 3 months |
| Interest over 6 months | About $37,305 | About $36,315, deducted from the advance at settlement | About $44,640, being about $21,195 then about $23,445 |
| Fee for writing the facility | $11,250, being 1.25 per cent of the loan | Not published by this funder | $600 establishment |
| Other lender fees | Risk fee published as nil. Valuation and legal not published | $6,750 risk fee, being 0.75 per cent of the loan. Legal and valuation not published | About $498, being $100 document processing, $8 a month and $350 discharge per settlement activity |
| Total of the lines that lender publishes | About $48,555 | About $43,065, before the fees this funder does not publish | About $45,738 |
| Repayment during the term | None. Interest is funded from an interest budget inside the approved amount, published to a maximum of 2 years | None. Interest for the term is deducted from the advance at settlement, so you receive the facility less that amount | None. Interest is capitalised, owner occupier only, term up to 12 months |
Sources: non-bank column from the La Trobe Financial bridging page (8.29 per cent variable, application fee 1.25 per cent, risk fee nil); private column from the Assetline Capital bridging page (prepaid rate from 8.07 per cent, fixed risk fee 0.75 per cent); bank column from the Westpac bridging page (9.42 per cent, increasing by 1.00 per cent after the first 3 months) and the Westpac home loan fee schedule; all read 15 September 2026. Interest is calculated as simple interest on the full facility for the period shown.
Ranked on the lines each lender publishes, the order comes out the reverse of the rate order, and the lane with the highest headline rate is not the dearest. A 113 basis point gap between the non-bank and bank rates was more than reversed by a percentage based application fee, leaving the bank column about $2,817 lower over the same 6 months. The gap widens on a shorter term and narrows on a longer one. That is the whole argument for reading a term sheet as a total rather than as a rate, and it is why a worked example built from one rate applied to one facility, which is what the retrieval layer currently publishes for this lane, cannot rank two real offers.
Read the private column with the caution its caption asks for. It is the lowest of the three on the lines that funder publishes, and it is also the only column missing an establishment fee, because that funder does not publish one. An establishment fee of the size the private lane usually charges would put it above both other columns. That is the point rather than a flaw in the table: an incomplete column always wins, and the answer is to ask for the missing lines, not to trust the total. What sits inside a private fee stack is set out in private bridging loans for business.
What did this look like on a real file?
On a private second mortgage this desk placed in 2026, the facility was just under $200,000 for 6 months with interest capitalised at a monthly rate, and about $150,000 of it reached the borrower once the establishment fee, the legal costs and the capitalised interest had been taken out at settlement. The funder rebated the unused full months when the property sold ahead of the term. Two lines decided that file and neither was the rate: what the facility nets you on day one, and what happens to the unused interest if you get out early.
Indicative, anonymised, based on a file this desk worked in 2026. Not a quote, not an offer, and not a limit you will be given. Actual outcomes depend on lender policy, the valuation and your circumstances at the time of application.
What does holding two properties add that no rate quote includes?
A second set of council rates, a second insurance policy, second utility accounts, a second set of strata levies where either property is titled that way, and in some states a land tax assessment a single property would not have triggered, and none of it appears in any rate, comparison rate, fee schedule or interest budget on this page. Lenders do not fund it from the facility, and an interest budget sized to cover interest is not sized to cover holding costs. Where the money is needed before the property you are selling has settled, the hold back and the sale evidence are worked through in bridging loan until your property sells.
It matters to the pricing decision because it is time based, not amount based. A facility priced per annum gets cheaper if you sell early; the second set of holding costs does the same, which means the real cost of a slow sale is the interest plus the duplicate outgoings, not the interest alone. Where a term is being chosen, that combined figure is the one to run, not the headline rate.
Land tax is the item most often missed, because it is assessed on land held at a set date in each state and territory rather than on the months you held it. A second property held across that date can bring a liability that a shorter or better timed bridge would not have triggered, and the principal place of residence exemption and any transitional concession are applied on each state's own terms. The dates, thresholds and exemptions differ in every jurisdiction and they change, so the figure comes from your state or territory revenue office or your accountant, not from a finance page.
The decision about whether to bridge at all, how servicing is assessed while both properties are held, and what happens if the first property does not sell, sits in the self-employed buying before selling guide, which is written for that question rather than for the pricing question.
Which bridging loan fees are negotiable?
The rule of thumb that holds across the sample is simple: a charge set by a published schedule moves rarely, and a charge priced to your file moves often. Flat dollar bank fees, document preparation and discharge fees are schedule items. Percentage based establishment, application and risk fees are file items, and so is the term, which is often the more valuable thing to negotiate because it changes the interest line rather than a few hundred dollars of fee.
From our broking, indicative
What we see move, and what we do not, on private and non-bank bridging term sheets:
- The lines that move most often are the percentage based establishment or application fee, the length of the interest budget or prepaid period, and whether an extension basis is agreed in advance rather than priced later.
- The lines that almost never move are flat dollar document, settlement and discharge fees, and third party costs such as valuation and legal, which the lender is passing through rather than earning.
- The most valuable thing on the sheet is usually not a fee at all. It is the payout clause and the extension clause, because both decide what happens on the day the plan changes.
- A lender will more often move on structure than on price, so asking for a longer budget or a cleaner discharge sequence tends to land better than asking for a discount.
Indicative only, based on deals we have placed, not a quote and not an offer, and deliberately qualitative because no figure here has a stated basis behind it. Actual terms depend on lender policy and your circumstances at the time of application. Not financial advice.
What does signing an indicative letter of offer commit you to?
Potentially the fees, even if the loan never draws. On the private lane the document that arrives first is usually an indicative letter of offer, and borrowers sign it to start the process rather than to accept a loan. In the 2024 Queensland decision above, a borrower signed one for a $2.4 million facility, the purchase did not proceed, the borrower asked for the search and valuation fees back, and the lender instead demanded about $366,000 in fees payable under that letter, along with caveats and personal property securities registrations lodged to secure them. The court found the fee clauses were not unfair and the claim failed.
Read as a pricing fact rather than as a legal one, that means the commitment fee, the charging clause and the security the lender may lodge for its own fees are live from signature, not from settlement. Before signing an indicative letter, ask what is payable if the loan does not proceed, what the lender may register against your property to secure those amounts, and whether the search and valuation fees are refundable. Those are cheaper questions than the alternative.
What to ask a bridging lender in writing before you sign
Six questions, sent by email so the answers are on the record. Each one targets a line that is either unpublished or unsettled across the sample, which means the only source for it is your own facility documents.
- If the property sells early, what happens to unused prepaid interest or an undrawn interest budget? Refunded, applied to the payout, or neither. No lender in the sample publishes a rule.
- On what basis will an extension be priced, and is that basis fixed now? Extension pricing is unpublished across the whole sample.
- What is the default margin, and does it apply to the whole balance or only to arrears? No Australian bridging lender read for this page publishes a default margin.
- Is the discharge fee charged per loan or per settlement activity? A two stage discharge is charged twice on at least one product read.
- Is the LVR measured against both properties or only the one being retained, and does it include the interest budget? This is what makes 80 per cent from one lender smaller than 75 per cent from another.
- What are the outlays on top of the quoted legal fee, and what is the realistic range? Legal is quoted as a base plus outlays on the private lane, and the outlays are the part that moves.
On a regulated contract, question one is not a favour you are asking. The information statement every lender must give a borrower under the National Credit Code says the borrower may write at any time asking for a statement of the payout figure as at any date they specify, may also ask for details of how that amount is made up, and the credit provider must supply it within 7 days. So the way to settle the prepaid interest question before you sign is to ask for a worked payout figure at an assumed early settlement date. On a business purpose bridge outside the Code that entitlement does not exist, which makes getting the same answer in writing before documents are issued more important, not less.
How do you compare two bridging loan offers side by side?
Convert both to one number, total dollars over your realistic term, and only then look at anything else. On the worked example above, ranking by headline rate would have picked the more expensive offer. Ranking by comparison rate would have been worse still, because two of the five products read publish a comparison rate below their own bridging rate.
| Line on the term sheet | Use it to compare? | Why |
|---|---|---|
| Total dollars of interest over your realistic term | ✓ Yes | The only interest figure that reflects how long you will actually hold the facility |
| Every lender fee converted to a dollar figure | ✓ Yes | A percentage fee and a flat fee cannot be compared until both are in dollars |
| Net funds you actually receive at settlement | ✓ Yes | Prepaid interest reduces the advance, so the face amount is not what lands |
| The payout clause and the extension basis, in writing | ✓ Yes | They decide the cost on the day the plan changes, which is the day pricing matters most |
| Discharge charged per loan or per settlement activity | ✓ Yes | A two stage discharge doubles the charge on at least one product read |
| The headline rate on its own | No | Reversed by the fee stack on the worked example above |
| A comparison rate built on a 25 year term | No | It describes a hypothetical loan no bridge resembles, and it runs both above and below the rate |
| A maximum LVR quoted without its denominator | No | 80 per cent measured one way can advance less than 75 per cent measured another |
| Fees quoted as "from", with no cap | No | An uncapped figure cannot be added to a total |
| Approval speed | No | It prices nothing, though it may decide whether the deal happens at all |
Stress test both offers before you rank them
Run each offer again on the assumptions that actually go wrong, because the ranking often changes. Four tests, in the order they are most likely to bite:
- Add 3 months to the term. A percentage fee does not change, so the offer with the larger fee gets relatively cheaper as the term lengthens, and the offer with the higher rate gets worse. The ranking on your expected term is not the ranking on your realistic one.
- Take 10 per cent off the valuation. Recalculate the advance at each lender's maximum LVR and see which offer still completes the purchase. An offer that cannot fund settlement is not a cheaper offer.
- Charge the discharge twice. If either sheet bills per settlement activity, assume a two stage discharge, because a bridge frequently discharges two securities on 2 days.
- Apply the rate step. Where a rate increases after a set period, run the full term at the stepped rate rather than the headline one, then compare again.
If you want the arithmetic run on two real sheets rather than on an example, that is a short conversation and it needs the two term sheets, the expected sale timing and the security details. You can start it through the eligibility check. For the surrounding decisions, the property and development finance hub covers the rest of the lane, and how private lending works covers the funder side of the private option.
Bridging loan pricing is three independent variables wearing one number. The rate is set by lane, the fee stack is set by whether it is a flat charge or a percentage, and the interest treatment decides what you owe on the day you discharge. Published Australian figures on 14 September 2026 show a comparison rate that runs both above and below the bridging rate depending on the product, a statutory 48 per cent cap that expressly does not apply to a bridging finance contract, and a worked 6 month facility where the higher advertised rate was the cheaper deal. The costs that apply when the sale runs late are the only ones nobody publishes: the extension price, the default margin, and on the bank lane the right to cancel the limit altogether.
Key takeaway: price a bridging loan as total dollars over your real term, and agree the payout and extension clauses in writing before you read the rate.Frequently Asked Questions
There is no single rate, because the three lending lanes price separately. Across the Australian bridging pages read at source on 15 September 2026, non-bank rates ran from 6.31 to 9.24 per cent per annum with most between 8.29 and 8.99, bank rates ran from 9.28 to 9.42 per cent on the three products publishing one, and only one private funder published a rate at all. Those bands are indicative and none is an offer. Which lane can take you is settled first in the bridging loans without a bank guide.
Yes, on almost every published sheet, and the gap is structural rather than just a higher rate. A bridging facility is short, priced for a term measured in months, and usually carries a percentage based establishment fee that a standard home loan does not. Because that fee does not shrink with the term, the shorter the bridge the more it costs in effective terms, the opposite of how borrowers expect a short loan to behave. Four cheaper routes are compared in do you actually need a bridging loan.
A risk fee is a separate charge for a file the lender prices as riskier than its standard product, and sits alongside, not instead of, the establishment fee. It is not universal: one non-bank product read on 15 September 2026 publishes a risk fee of nil, and one private funder publishes 0.75 per cent. Where charged, it is priced to the file rather than set by a schedule, which makes it one of the more negotiable lines. Which lines move on a private file is in what private lenders need to fund quickly.
An interest budget is an amount built into the approved loan so the facility funds its own interest during the bridging period, which is why no monthly repayment is required. One Australian non-bank publishes it in exactly those terms and sets the period to suit the applicant, to a maximum of 2 years. Because it is drawn only as interest falls due, an early sale means the unused part is never drawn, so it is not owed. Closed and open bridges are budgeted differently, as closed or open bridging loan sets out.
Sometimes, and it is one of three treatments on Australian bridging term sheets. The products read on 15 September 2026 used capitalisation, prepaid interest and an interest budget, and one private funder offers prepaid or capitalised interest as alternatives on the same product. What the three have in common is that you make no monthly repayment; what separates them is what is owing on the day you discharge, so the term sheet needs reading on that point specifically. What capitalisation does month by month is in the worked example on peak debt.
The comparison rate on a bridging loan is a rate calculated on a stated amount of credit over a stated term under regulation 71 of the National Consumer Credit Protection Regulations 2010, and on bridging products that term is often 25 years, which no bridge runs for. It can therefore sit either above or below the actual bridging rate: of five Australian products read on 14 September 2026, three published a comparison rate above the rate and two below it. The mechanics of the calculation are set out in the comparison rate glossary entry.
There are exit costs on every bridging loan read for this page, though they are rarely labelled exit fees. Discharge fees ran from $350 to $450 on the products read on 15 September 2026, and on at least one the discharge is charged per settlement activity rather than per loan, so a two stage discharge is charged twice. ASIC states early termination fees on regulated residential loans have been prohibited since 1 July 2011, which does not reach a business purpose bridge. Extension pricing is in bridging loan expired and not sold.
Peak debt is the total the lender assesses while both properties are held: the balance owing on the existing loan, plus the purchase price of the new property, plus purchase costs, plus any interest budget or capitalised interest added to the facility, less any deposit or cash you contribute. It matters because the maximum LVR is measured against that figure rather than against the new loan alone, and the definitions differ by lender. The instrument peak debt drives you towards is set out in the bridging, caveat or second mortgage guide.
Not in the bank lane, where the products read on 14 September 2026 charge interest as it accrues, allow extra repayments and publish no minimum charged term. In the private lane the same effect appears without the label, because interest for the whole term is deducted from the advance at settlement, so a bridge that settles early has already paid for weeks it did not use. Whether any comes back depends on the payout clause. The same trap on a second mortgage is in when a bridging loan is really a second mortgage.
It depends on the payout clause, and no lender in the sample publishes a general rule. Two positions circulate, that unused prepaid interest is refunded and that it is applied to the balance in the payout calculation, and they produce different amounts at settlement. One private funder this desk deals with rebates unused full months but not part months. Ask for the treatment in writing before documents are issued. What an early sale does to the facility as a whole is in sold early or sold for less.
The facility does not quietly continue. The lender either extends it on terms priced at that moment or the loan moves to its default rate, and no Australian lender document read on 15 September 2026 publishes a price for either. On the bank lane the facility is often written as a credit limit the lender may reduce or cancel at any time, after which the total owing becomes payable. Both costs are set when your leverage is lowest. The sequence is in bridging loan expired and not sold.
There is no single normal: the fee is calculated differently in each lane. On the pages read on 15 September 2026 the bank lane charged a flat $600, the non-bank lane charged 0.60 to 2 per cent of the loan, and no private funder published an establishment fee at all. So it sits above everything published on that date, which does not make it wrong on a private file, but does make it the number to test against what the facility nets you. The private fee stack is in private bridging loans for business.
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Bridging loan rates · Term sheet lines · Comparison rate
Bridging loan pricing has three moving parts, and a term sheet almost never explains how they interact. This page reads every line using figures Australian lenders published on the day it was written, whether you are still deciding, holding a term sheet, or already in a bridge that has run longer than planned.
Quick Answer
Bridging loan pricing has three parts that move independently: the rate, the fee stack, and how interest is charged during the term. The lowest rate is often not the lowest total. Settle the instrument choice first, then read the term sheet line by line.
Also searched as: bridging loan interest rate, bridging finance rates, bridging loan term sheet, comparison rate on a bridging loan.
What does a bridging loan cost in Australia right now?
A bridging loan costs a rate, plus a fee stack, plus an interest treatment, and the three are priced separately by lane. Across 15 Australian lender pages read at source on 15 September 2026, the non-bank lane published rates from 6.31 per cent to 9.24 per cent per annum with most of the sample between 8.29 and 8.99, the bank lane published 9.28 per cent to 9.42 per cent on the three products that publish a rate at all, and on the private business purpose lane one funder published from 8.07 per cent prepaid while the other quotes the rate on conditional approval. Every band on this page is drawn from the pages linked beneath the tables, on that date, and none of it is an offer.
Which lane can take you at all is a different question from what it costs, and it is answered first in the guide to bridging loans without a bank. This page assumes you know which lane you are in and are holding a quote, a term sheet or a rate you cannot make sense of.
One note on where the evidence comes from, because it shapes what this page can and cannot show. Rate sheets are published across all three lanes, but facility terms are published on only one of them. The bank lane puts its general terms online in full, the non-bank lane publishes rates and a fee schedule without them, and the private lane publishes neither a rate nor its terms. So where this page quotes a contractual mechanic rather than a price, the readable source is a bank document, and the mechanic is stated as a bank lane mechanic rather than as a market rule. The absence of published terms on the other two lanes is itself one of the findings.
That last point is the one most cost comparisons get wrong. A lane with no published rate is not a lane with a hidden rate, it is a lane where the rate is an output of the security, the exit and the term rather than a shelf price. It is also why a table of rates alone cannot rank the three lanes against each other.
| Lane | Published rate band | Comparison rate published | What you pay during the term |
|---|---|---|---|
| Non-bank bridging | 6.31 to 9.24 per cent per annum across the five products that publish a rate, with most of the sample between 8.29 and 8.99 per cent. Two of the 7 lenders read publish no rate on their bridging page | ✓ Yes, 6.35 to 8.62 per cent, and on three of the five it sits below the bridging rate | Usually nothing. Interest is funded from an interest budget inside the approved amount, or capitalised to the balance |
| Private, business purpose | Mostly not published. One funder publishes from 8.07 per cent prepaid and from 8.22 per cent capitalised; the other quotes the rate on conditional approval | One published pair, 6.88 and 6.90 per cent. A facility written on a business purpose declaration sits outside the Code, where no comparison rate is required at all | Nothing. Interest for the term is either deducted at settlement or capitalised to the balance |
| Bank bridging, shown for comparison only | 9.28 to 9.42 per cent per annum on the three products that publish a rate, one of which increases by 1.00 per cent after the first 3 months. Two major banks publish no rate on their bridging page at all | ✓ Yes, 9.10 to 9.24 per cent, below the bridging rate on all three | Usually nothing on the capitalised products. One major bank requires interest only payments across the bridging period |
Sources: non-bank rates from the Bridgit rates and fees page, La Trobe Financial bridging page, Brighten bridging page, Well Money bridging page (rates stated as at 15 May 2026) and the loans.com.au bridging page (rates stated as at 10 September 2026), with the MA Money broker bridging page and ORDE bridging page publishing no rate; private rates from the Assetline Capital bridging page, with the Funding.com.au bridging page quoting on conditional approval; bank rates from the Westpac bridging page, the St.George relocation loan page and the Bank of Melbourne relocation loan page, with the Commonwealth Bank bridging page and the ANZ bridging page publishing no rate; all read 15 September 2026. Lenders are named here because a source cell is the one place a lender may be named.
Every figure above is a lender published figure read on 14 September 2026 and is indicative only. Rates on this lane reset without notice, one of the products read carries an explicit "subject to change without prior notice" stamp, and none of these is a quote or an offer to you.
Which cost question are you actually asking?
People arrive at a bridging cost page from four different places, and the cheapest answer is different in each. Find your row before you read the rest.
| Where you are | The cost question that actually applies | Where it is answered |
|---|---|---|
| Still deciding whether to bridge at all | Total dollars over your realistic term, plus the duplicate holding costs no lender funds | Working out your own number, then what holding two properties adds |
| A term sheet is in front of you | Which lines are schedule items, which are priced to your file, and what happens at payout | The fee names, the interest treatment and what moves |
| A bank declined and you have been offered a private bridge | Whether the fee stack is ordinary for that lane, and what protections you give up outside the Code | The comparison rate and what caps the price |
| The bridge is already running and the property has not sold | Extension pricing and the default rate, the only two costs on this lane nobody publishes | If the property does not sell in time |
How do you work out what a bridging loan will cost you?
Interest for your own term, plus the fee for writing the facility, plus the exit lines, and nothing converted back to a percentage until the end. Work it out in five steps and do it in dollars rather than in per annum percentages, because the fee stack is what reverses the ranking between two offers. The arithmetic below is the same one a broker runs on a term sheet and it takes about ten minutes with a calculator. A single facility with the interest compounding month by month, worked to the dollar, is in what capitalised interest costs on a bridge.
- Size the facility, not the loan. Add the balance owing on your existing loan, the purchase price of the new property, and purchase costs. Subtract any cash or deposit you are contributing. That figure is what the lender prices, and it is the figure the maximum LVR is measured against.
- Add the interest treatment to the facility if it sits inside it. An interest budget and capitalised interest are borrowed money and increase the amount you are charged on. Prepaid interest does the opposite: it comes out of the advance, so you receive less than the face amount.
- Calculate interest in dollars for your realistic term, not the maximum term. Facility size, multiplied by the rate, multiplied by months divided by twelve. If the rate steps up after a set period, run each period separately and add them.
- Convert every fee to a dollar figure. A percentage establishment or application fee is the line that moves most, so multiply it out. Then add document, settlement, valuation, legal and discharge fees, and count the discharge once per settlement activity rather than once per loan if the schedule says so.
- Add the costs the lender does not fund. A second set of council rates, insurance, utilities and any strata levies for every month both properties are held. That total, not the interest figure, is the real cost of a slow sale.
The output is one number per offer, in dollars, over your term. That is the only figure that ranks two term sheets, and the worked examples below show it reversing the order the advertised rates put them in. Run it again at a longer term as well, because a bridge that takes 9 months instead of six does not cost fifty per cent more, it costs fifty per cent more interest on top of a fee stack that did not change.
Why can a comparison rate be lower than the bridging loan rate?
A comparison rate can sit below a bridging loan rate because it is not a rate on your bridge at all: it is a rate calculated on a hypothetical loan of a stated size over a stated term, and on bridging products that term is often 25 years. Regulation 71 of the National Consumer Credit Protection Regulations 2010, headed "Comparison rate", requires that the rate "must be accompanied by a statement of the amount of credit on which it is based and the term for which credit is provided". One Australian bridging lender discloses its comparison rate as "based on secured credit of $150,000 and a term of 25 years". A bridge does not run for 25 years. The comparison rate is describing something else.
The widely repeated claim that comparison rates sit higher than the headline rate because fees are added is wrong as a general statement about this lane. Of the five Australian bridging products read on 14 September 2026 that published both a rate and a comparison rate, three disclosed a comparison rate above the rate and two disclosed one below it. A comparison rate falls below the headline rate whenever a short high rate is blended into a longer, lower ongoing rate across the disclosure term.
Two published pairs that point in opposite directions
- 8.99%bridging rate against a 7.93 per cent comparison rate on a 12 month owner occupied product, because the bridge rate blends into a lower ongoing rate over the disclosure term. Bridgit rates and fees page, read 15 September 2026
- 8.29%variable rate against an 8.62 per cent comparison rate, disclosed on secured credit of $150,000 over a 25 year term. La Trobe Financial bridging page, read 15 September 2026
Lender published figures read at source on 14 September 2026, indicative only, not offers, and subject to change without notice. A comparison rate is not the rate you will pay. General information only.
There is also a legal point worth getting right, because the retrieval layer currently gets it wrong. No regulator prescribes $150,000 over 25 years. Regulation 71(10)(a) requires only that, in an advertisement, "the amount of credit and term are to be typical of the type of credit contract offered in the advertisement". The $150,000 over 25 years figure is a home loan convention that satisfies "typical", not a mandated number, and applying a home loan convention to a bridging product is exactly how a comparison rate stops describing your loan.
Regulation 71(11) also requires a specific written warning when a comparison rate is given to a borrower before a contract is entered into, and it says in terms that "Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan". Read that as the regulation telling you the number is incomplete on purpose.
Two limits on all of this. The obligation is a consumer credit one: ASIC states that Part 10 of the National Credit Code requires a comparison rate when a lender advertises fixed term credit that is for, or mainly for, personal, domestic or household purposes. A business purpose bridge written on a section 13 declaration sits outside the Code, and there is no comparison rate on it at all. Source: National Consumer Credit Protection Regulations 2010, Compilation No. 56, compilation date 1 November 2025, read at the Federal Register of Legislation on 14 September 2026; ASIC National Credit Code guidance read at source the same day.
What fees do bridging lenders charge?
Banks charge a flat dollar fee for writing a bridging facility, $600 on the three schedules published, while non-bank lenders charge 0.60 to 2 per cent of the loan and private funders charge a percentage they do not publish, which is why the same charge is a few hundred dollars on one sheet and five figures on another. Three names, largely one charge: it is called an establishment fee in the private lane, an application fee by several non-banks, and a lending establishment fee by the banks, and the difference between the names is smaller than the difference between how they are calculated.
A risk fee is a separate line again. It is a charge for the lender carrying a file it prices as higher risk, it is usually a percentage, and it is not universal: one non-bank bridging product read on 14 September 2026 publishes a risk fee of nil. When a risk fee is charged, it is the line most worth asking about, because it is priced to your file rather than set by a schedule. There is a useful cross-check in what a caveat loan actually costs, where the same naming problem appears on a different instrument.
| Charge | Bank lane, comparison only | Non-bank lane | Private, business purpose |
|---|---|---|---|
| Fee for writing the facility | $600, flat, on the three bank products that publish a schedule | 0.60 to 2 per cent of the loan | A percentage of the facility, quoted per file. Neither funder read publishes it |
| Document preparation or processing | $100 | $770 on one product, from $150 on another | Not published. Sits inside the legal line below |
| Risk fee | Not charged | Published as nil on the one product that names it | 0.75 per cent on the one funder that publishes a fee |
| Ongoing account fee | $8 a month | Published as nil on one product, not published on the rest | Not charged. The cost sits in the interest taken at settlement |
| Valuation | Not published as a figure. One fee schedule says it is the external valuer's fee | From $220 on one sheet and $230 for a metro property under $1 million on another. A third lender pays up to $300 of it | At cost, not published |
| Legal | Not published on the products read | Not published on the products read | Quoted per file, plus GST and outlays |
Sources: bank column from the Westpac home loan fee schedule, matched on the St.George relocation loan page and the Bank of Melbourne relocation loan page; non-bank column from the Bridgit rates and fees page (set-up 0.60 per cent, document preparation $770, valuation from $220, discharge $450), the La Trobe Financial bridging page (application fee 1.25 per cent, risk fee nil), the loans.com.au bridging page (set-up 2 per cent, security assessment $230, monthly fee nil) and the Well Money bridging page (loan processing from $150, up to $300 of the valuation paid); private column from the Assetline Capital bridging page (fixed risk fee 0.75 per cent); all read 15 September 2026. What a private funder charges to write a facility, and what reaches you after it, is in private bridging loans for business.
All figures are lender published and were read at source on 14 September 2026. They are indicative, they change without notice, and the fee actually charged on a file depends on lender policy and your circumstances at the time of application.
One fee can be lost before the facility is even used. Published bank bridging general terms read on 14 September 2026 require the loan to be drawn within a set period after the acceptance date, 120 days on the document read, and provide that if it is not drawn the lender may treat the contract as ended and keep the loan application or establishment fee. A bridge arranged early against a purchase that slips can therefore cost the establishment fee and deliver nothing. If the purchase timetable is uncertain, ask what the drawdown window is and what happens to the fee if it passes.
Is bridging loan interest prepaid, budgeted or capitalised?
Australian bridging lenders use all three treatments, and none of them requires a monthly repayment, so what separates them is the amount owing on the day you discharge. Prepaid interest is taken out of the advance at settlement, an interest budget is added to the approved amount so the facility funds its own interest, and capitalised interest is added to the balance as it accrues. Borrowers treat them as interchangeable because the monthly experience is identical. They are not, and the difference lands at payout.
| Line | Prepaid interest | Interest budget | Capitalised interest |
|---|---|---|---|
| Where the money starts | Deducted from the advance at settlement | Added to the approved loan amount before settlement | Nowhere. It is added to the balance as it accrues |
| What you receive on the day | Less than the face amount | The face amount, with the budget sitting behind it | The face amount |
| Monthly repayment | None | None | None |
| Maximum period published | Up to 1 year on the private product read | Up to 2 years on the non-bank product read | Up to 1 year on the private product read, up to 12 months on the bank product read |
| If the property sells early | Depends entirely on the payout clause. Not published by any lender in the sample | Unused budget was never drawn, so it is not owed | Interest stops accruing on discharge, so the saving is automatic |
The prepaid row is the one to argue about before you sign. A claim circulating widely on this topic is that unused prepaid interest is simply refunded to the borrower. Not one of the eight Australian lender documents read at source for this page on 14 September 2026 says that, and not one says the opposite either. Two published positions are in circulation, that unused prepaid interest is refunded and that it is applied to the loan balance in the payout calculation, and they produce different money at settlement. Neither is a market rule. The payout clause in your own term sheet is the only source that answers it, and it is a fair question to ask a lender in writing before the facility is documented.
Two further points the term sheets leave out. The first is vocabulary: prepaid and capitalised interest are both described internationally as retained interest, so a search on that phrase returns overseas material rather than an Australian product, and no Australian sheet read for this page uses the term. The second is that a fixed rate changes the early sale arithmetic again. Published bank general terms read on 14 September 2026 treat paying out all or part of a fixed rate loan early, expressly including when you sell the property, as an event that triggers economic costs, calculated on the change in the lender's cost of funds over the remaining fixed period. On a fixed rate facility that is a fourth cost of selling early, and it is separate from the prepaid interest question entirely.
The interest budget row is cleaner and less understood. One non-bank publishes that "an interest budget is incorporated into the approved loan amount to cover loan repayments during the bridging period", with the budget period set to suit the applicant up to a maximum of 2 years. Because the budget is drawn as the interest falls due, an early sale simply means part of it is never drawn. The same lender publishes that no early repayment fee applies on partial discharge of existing security. Capitalisation on a development facility behaves differently again, and that is covered where it belongs, in capitalised interest and loan to cost.
Is there a minimum interest period on an Australian bridging loan?
There is no minimum interest period on an Australian bank bridging loan, but there is an equivalent effect on a private one. Bank bridging products read on 14 September 2026 charge interest as it accrues over a term of up to 12 months, allow extra repayments, and publish no minimum charged term and no early repayment penalty on the bridging component. A widely surfaced answer states flatly that there is no mandatory minimum interest period on an Australian bridging loan, and for the products it is drawn from, all of them banks, that answer is correct. What happens to the unused interest when the property sells ahead of the term is in sold early or sold for less.
It stops being correct the moment you cross into the private lane, and the mechanism is not a penalty clause. One private lender publishes that "interest for the first loan is deducted at settlement. This means clients do not make repayments throughout the loan term." Interest for the whole term leaves the advance on day one. If the term is 3 months and the property settles in 7 weeks, the money for the remaining weeks has already gone, and whether any of it comes back is the payout clause question in the section above. That is how a 2 month bridge can cost 3 months, without any document ever using the phrase minimum interest period.
Two private lenders do publish the term outright, which settles the point. Of the documents read on 14 September 2026, one private lender discloses that a minimum interest period applies and that the borrower receives a pro rata credit on early repayment subject to that minimum, and a second discloses a minimum interest period in similar terms. So the correct Australian answer is not that minimum interest periods do not exist here, it is that they are a private lane feature, disclosed by some lenders and produced by the deduction mechanism in others, and absent from the bank lane entirely. A general answer drawn only from bank products will tell you the opposite.
The phrase itself is largely imported. Search demand for it in Australia is negligible and its keyword family carries clearly British variants, which is a reason to expect any generic answer to it to describe a market that is not this one. The related question of how fast a facility can settle, and what speed costs, sits in the fast settlement finance guide rather than here.
What is the default interest rate on a bridging loan?
No Australian bridging lender publishes a default margin in any document read for this page, so any specific figure you see quoted for this lane is a generalisation rather than a disclosure. That claim survived a deliberate test: published bank general terms read on 14 September 2026 name default interest charges in their own definition of the total amount owing, and still put no rate or margin against them anywhere in the document. The charge is contemplated and left unpriced, which is not the same thing as not existing. What is worth knowing is where the ceiling sits, and the answer is different in each of the three lanes. This is the part of bridging loan pricing that almost nothing on the topic reaches.
For a consumer credit contract, the National Credit Code caps the annual cost rate at 48 per cent. Division 4A of the Code is headed "Annual cost rate of certain credit contracts" and section 32A is headed "Prohibitions relating to credit contracts if the annual cost rate exceeds 48%". The annual cost rate is a whole of cost measure, not just the interest rate, so establishment and other credit fees are inside it.
And bridging is expressly carved out of that cap. Section 32A(4) provides that the section does not apply if the credit provider is an ADI or the contract "is a low cost credit contract, small amount credit contract or bridging finance contract". A bridging finance contract is a defined term: section 204(1) of the Code provides that a credit contract is one where, when the contract is made, the debtor "reasonably expects to receive a lump sum before the term of the contract ends" and "intends to discharge the debtor's obligations under the contract so far as possible with that sum", and "the term of the contract is 2 years or less". So a genuine bridge, even a regulated consumer one, is not subject to the 48 per cent ceiling. That is a deliberate policy choice, not an oversight, and almost no page on this topic mentions it.
What survives is the unconscionability jurisdiction. Section 78 of the Code, headed "Court may review unconscionable interest and other charges", lets a court annul or reduce an establishment fee or charge, a fee or charge payable on early termination, a fee or charge for a prepayment, or a change to the annual percentage rate, where it is unconscionable. Sections 76 and 77, headed "Court may reopen unjust transactions" and "Orders on reopening of transactions", sit alongside it. Those are remedies after the fact, applied by a court, not a price cap.
On a business purpose private bridge, none of the above applies. ASIC states that the Code applies where the debtor is a natural person or strata corporation and the credit is provided wholly or predominantly for personal, domestic or household purposes, or to purchase, renovate or improve residential property for investment purposes. Business purpose credit on a section 13 declaration falls outside it, and the form that declaration has to take is prescribed by regulation 68 of the National Consumer Credit Protection Regulations 2010, headed "Declaration of purposes for which credit provided", rather than being a free text sentence a lender can draft as it likes. so there is no 48 per cent cap, no comparison rate obligation and no section 76 to 78 remedy. What does survive outside the Code is the unfair contract terms regime in the Australian Securities and Investments Commission Act 2001, which since November 2023 reaches small business contracts, and it is narrower than it sounds. A 2024 Supreme Court of Queensland decision on a private lender's letter of offer held that the protection did not apply at all, because the document had been negotiated back and forth through the borrower's broker and so was not a standard form contract, which is the threshold the regime turns on. Negotiating your term sheet is worth doing on the price, and it can also remove the statutory argument you might later want. The price discipline in that lane is the term sheet and your leverage before you sign it, which is why planning the exit from a short term facility matters more there than anywhere else. Source: National Consumer Credit Protection Act 2009, Compilation No. 52, compilation date 1 July 2026, read at the Federal Register of Legislation on 14 September 2026.
What are the exit fees on a bridging loan?
Exiting a bridging loan costs a discharge fee of $350 to $450 on the products read on 15 September 2026 and a valuation or security assessment from $220, while private lane legal costs are quoted per file, and no lender in the sample publishes a price for an extension at all. The exit is the least quoted part of a bridging facility and the part most likely to surprise, because most of it is charged per event rather than per loan. A discharge is billed per settlement activity on at least one product read, which means a bridge that discharges two securities on 2 days is charged twice.
Exit lines, as published, read at source 14 September 2026
- $350discharge fee per settlement activity on the bank lane products read, so a two stage discharge is charged twice. Westpac home loan fee schedule, read 15 September 2026
- $450discharge fee on the residential non-bank product read, against $385 on the same lender's commercial bridging product. Bridgit rates and fees page, read 15 September 2026
- $230security assessment fee for a metro property under $1 million on one non-bank sheet, against a valuation from $220 on another. loans.com.au bridging page, rates stated as at 10 September 2026, read 15 September 2026
Lender published fee schedules read at source on 14 September 2026, indicative only, not offers, and subject to change without notice. Extension pricing is not published by any lender in the sample and is negotiated at the time. General information only.
An early termination fee is a different thing from a discharge fee, and on a regulated residential loan it is largely prohibited. ASIC states that from 1 July 2011 the National Consumer Credit Protection Regulations prohibit early termination fees for residential loans, subject to limited exceptions, and that its guidance on when such a fee is unconscionable applies to contracts entered into before that date and to fees the regulations do not prohibit, such as break fees. That is a consumer credit protection, so it reaches a regulated residential bridge and does not reach a business purpose bridge written on a section 13 declaration. It also does not reach the discharge, settlement and legal fees above, which are charges for work done rather than fees for ending the contract early. Source: ASIC Regulatory Guide 220, issued 9 November 2023, read at source 14 September 2026.
From our broking, the legal line is the one we see move most on a private sheet, because it is quoted as a base plus outlays rather than as a fixed number, and the outlays depend on how many titles, consents and existing mortgagees are involved. Extension fees are not published anywhere in this sample, which in practice means they are set at the point you need one, when your leverage is lowest. Agreeing an extension basis before settlement, not after, is the single cheapest thing a borrower can do on this lane. Building the discharge sequence into the exit strategy at the start is the other.
What does a bridging loan cost if the property does not sell in time?
Nobody publishes the answer, and that is the finding. When a bridging facility reaches the end of its term with the property unsold, one of two things happens: the lender extends it on terms priced at that moment, or the loan moves to its default rate. Not one of the eight Australian lender documents read at source on 14 September 2026 publishes a price for either. Every other cost on this lane is disclosed in advance, and the two that only apply when the plan slips are set when your leverage is at its lowest. What the lender does on the maturity date, in order, is the bridging loan expired and not sold guide's question.
That asymmetry is the strongest argument for negotiating the term rather than the rate. A 6 month facility extended twice can cost more than a 9 month facility written at the start, because the extension is repriced each time and the original fee stack is never refunded. Where an interest budget was sized to the original term, it runs out at the same moment, so the facility that required no repayment for 6 months can start requiring one in month seven.
On the bank lane there is a second exposure, and it is one the rate sheet cannot show. Bank bridging is often written as a credit limit on an account rather than as a term advance, and the published general terms read on 14 September 2026 allow the lender to reduce or cancel that limit at any time, whether or not the borrower is in breach, with 30 days' notice in the ordinary case and less where the lender is managing an immediate risk. If the limit is cancelled it falls to zero, the total amount owing becomes payable, and failing to pay it is itself an event of default. The same document gives at least thirty 1 days to remedy a default notice and makes the borrower liable for the lender's reasonable enforcement expenses. None of that appears on a rate sheet.
What the law does here depends on which lane you are in, and it is thinner than most borrowers assume. On a regulated consumer bridge the 48 per cent annual cost rate cap does not apply, because a bridging finance contract is carved out of it by section 32A(4), so the ceiling is the unconscionability jurisdiction in sections 76 to 78 rather than a number. On a business purpose bridge written on a section 13 declaration there is no cap, no comparison rate and no statutory reopening remedy at all. In both lanes the practical protections are contractual and they are agreed before settlement: the extension basis, the default margin, whether default interest applies to the whole balance or only the arrears, and whether the payout figure is calculated to the day.
This section answers the cost question only, which is what the two unpublished lines are worth and why they behave the way they do. What to actually do when a bridge is running and the sale has gone quiet, whether to reprice the property, take the extension, refinance to a term facility or let the lender run its process, is a different decision with a different set of trade-offs, and it does not belong on a pricing page. The one pricing-adjacent point worth making here is that the cheapest version of every option above is the one arranged before the term ends rather than after it. Where the exit is a handover to longer term debt, that route is set out in moving a short term facility to a term loan.
What is the 80 per cent LVR measured against?
Maximum bridging LVRs published on 14 September 2026 ran from 70 per cent to 85 per cent, and 80 per cent means different things because the two numbers in the ratio are not defined the same way across lanes. The spread inside that range is driven less by risk appetite than by what each lender puts in the denominator and what it counts in the numerator.
Three things move it. First, whether the ratio is measured against the combined value of both properties or only against the property being retained. Second, whether the interest treatment is inside the numerator: an interest budget added to the approved amount is borrowed money, so a facility with a 2 year budget is a larger loan against the same security than the same facility with monthly interest. Third, whether the security is residential, commercial or residual stock.
| Security and term | Published maximum LVR | What that implies |
|---|---|---|
| Residential, owner occupied, 12 month term | 85 per cent | The highest published figure on the sheet, and the shortest term |
| Residential, 24 month term | 80 per cent | A longer term buys less leverage, because a longer interest budget sits inside the loan |
| Commercial security | 75 per cent | Valuation is more contested, so the discount is applied to the ratio rather than to the rate |
| Residual stock | 70 per cent | Unsold stock is priced as a sale risk, not as a property |
Sources: all four figures from the Bridgit rates and fees page, read 15 September 2026, which publishes 85 per cent on the 12 month residential product, 80 per cent on the 24 month, 75 per cent on commercial bridging and 70 per cent on residual stock. Lenders are named here because a source cell is the one place a lender may be named.
The consequence is practical rather than technical. An offer at 80 per cent measured one way can advance less money than an offer at 75 per cent measured another, so the LVR headline ranks offers no better than the rate headline does. Ask each lender what goes in the numerator and what goes in the denominator before comparing the two figures. How the underlying debt figures are constructed, and the definitions of the debt at its peak and the debt that remains, belong to the instrument comparison guide, which sets them out in full.
What happens if the valuation comes in below the bridging loan term sheet?
A low valuation does not usually change the rate, it changes how much the lender will advance, because the maximum LVR is applied to the valuation rather than to the price you agreed. On a bridge the effect is doubled, because the ratio is measured against the debt while both properties are held, so a shortfall on either the property you are buying or the one you are selling moves the same number. The gap has to be closed with your own cash, a smaller facility or a different lender, and each of those costs something. The options once the number lands short, in the order of what each costs you, are in what to do about a valuation shortfall at settlement.
Two things in published bank general terms read on 14 September 2026 are worth knowing before the valuation is ordered. The first is that the lender obtains the valuation for its own use and states in terms that it should not be relied on by the borrower or anyone else, so a number that disappoints you is not a report you can take somewhere and reuse. The second is that the loan will not proceed if the valuation or the lender's searches are not satisfactory to it. A valuation is therefore a condition, not a formality, and the fee for it is usually already spent by the time you see the result.
| What changes | Why it changes | What it costs |
|---|---|---|
| The amount advanced | The maximum LVR applies to the valuation, not the contract price | The shortfall, in cash, at settlement |
| The LVR you were quoted | On a bridge the ratio is measured against the debt while both properties are held, so either valuation moves it | An offer at the same headline LVR now advances less |
| The fee already paid | Valuation is charged when it is ordered, not when it is accepted | From $220 per valuation on the non-bank lane, at cost with no published cap on the private lane |
| Going to another lender | The valuation belongs to the lender that ordered it and is not transferable | A second valuation fee, and a second application fee if the first is not refunded |
| The timetable | A review or a re-valuation runs while the purchase contract keeps running | Whatever the contract says about late settlement, plus another month of holding costs |
The cheapest protection is ordering the valuation early rather than late, because the cost of a shortfall is almost entirely a function of how little time is left to solve it. Where speed is the reason the facility is being written in the first place, that trade-off is set out in the fast settlement finance guide.
What does a $900,000 bridging facility held for 6 months actually cost?
A $900,000 bridging facility held for 6 months costs about $45,738 in the bank lane and about $48,555 in the non-bank lane on rates and fees published on 14 September 2026, so the lane with the higher advertised rate is the cheaper one. Interest is calculated as simple interest on the full facility for the period shown; compounding on the capitalised structure is not modelled, and neither is valuation or legal on the non-bank example, because that lender does not publish them. Both figures are illustrative arithmetic, not quotes and not offers.
| Line | Non-bank lane | Private lane, business purpose | Bank lane, comparison only |
|---|---|---|---|
| Advertised rate | 8.29 per cent per annum | 8.07 per cent per annum, prepaid | 9.42 per cent per annum, increasing by 1.00 per cent after the first 3 months |
| Interest over 6 months | About $37,305 | About $36,315, deducted from the advance at settlement | About $44,640, being about $21,195 then about $23,445 |
| Fee for writing the facility | $11,250, being 1.25 per cent of the loan | Not published by this funder | $600 establishment |
| Other lender fees | Risk fee published as nil. Valuation and legal not published | $6,750 risk fee, being 0.75 per cent of the loan. Legal and valuation not published | About $498, being $100 document processing, $8 a month and $350 discharge per settlement activity |
| Total of the lines that lender publishes | About $48,555 | About $43,065, before the fees this funder does not publish | About $45,738 |
| Repayment during the term | None. Interest is funded from an interest budget inside the approved amount, published to a maximum of 2 years | None. Interest for the term is deducted from the advance at settlement, so you receive the facility less that amount | None. Interest is capitalised, owner occupier only, term up to 12 months |
Sources: non-bank column from the La Trobe Financial bridging page (8.29 per cent variable, application fee 1.25 per cent, risk fee nil); private column from the Assetline Capital bridging page (prepaid rate from 8.07 per cent, fixed risk fee 0.75 per cent); bank column from the Westpac bridging page (9.42 per cent, increasing by 1.00 per cent after the first 3 months) and the Westpac home loan fee schedule; all read 15 September 2026. Interest is calculated as simple interest on the full facility for the period shown.
Ranked on the lines each lender publishes, the order comes out the reverse of the rate order, and the lane with the highest headline rate is not the dearest. A 113 basis point gap between the non-bank and bank rates was more than reversed by a percentage based application fee, leaving the bank column about $2,817 lower over the same 6 months. The gap widens on a shorter term and narrows on a longer one. That is the whole argument for reading a term sheet as a total rather than as a rate, and it is why a worked example built from one rate applied to one facility, which is what the retrieval layer currently publishes for this lane, cannot rank two real offers.
Read the private column with the caution its caption asks for. It is the lowest of the three on the lines that funder publishes, and it is also the only column missing an establishment fee, because that funder does not publish one. An establishment fee of the size the private lane usually charges would put it above both other columns. That is the point rather than a flaw in the table: an incomplete column always wins, and the answer is to ask for the missing lines, not to trust the total. What sits inside a private fee stack is set out in private bridging loans for business.
What did this look like on a real file?
On a private second mortgage this desk placed in 2026, the facility was just under $200,000 for 6 months with interest capitalised at a monthly rate, and about $150,000 of it reached the borrower once the establishment fee, the legal costs and the capitalised interest had been taken out at settlement. The funder rebated the unused full months when the property sold ahead of the term. Two lines decided that file and neither was the rate: what the facility nets you on day one, and what happens to the unused interest if you get out early.
Indicative, anonymised, based on a file this desk worked in 2026. Not a quote, not an offer, and not a limit you will be given. Actual outcomes depend on lender policy, the valuation and your circumstances at the time of application.
What does holding two properties add that no rate quote includes?
A second set of council rates, a second insurance policy, second utility accounts, a second set of strata levies where either property is titled that way, and in some states a land tax assessment a single property would not have triggered, and none of it appears in any rate, comparison rate, fee schedule or interest budget on this page. Lenders do not fund it from the facility, and an interest budget sized to cover interest is not sized to cover holding costs. Where the money is needed before the property you are selling has settled, the hold back and the sale evidence are worked through in bridging loan until your property sells.
It matters to the pricing decision because it is time based, not amount based. A facility priced per annum gets cheaper if you sell early; the second set of holding costs does the same, which means the real cost of a slow sale is the interest plus the duplicate outgoings, not the interest alone. Where a term is being chosen, that combined figure is the one to run, not the headline rate.
Land tax is the item most often missed, because it is assessed on land held at a set date in each state and territory rather than on the months you held it. A second property held across that date can bring a liability that a shorter or better timed bridge would not have triggered, and the principal place of residence exemption and any transitional concession are applied on each state's own terms. The dates, thresholds and exemptions differ in every jurisdiction and they change, so the figure comes from your state or territory revenue office or your accountant, not from a finance page.
The decision about whether to bridge at all, how servicing is assessed while both properties are held, and what happens if the first property does not sell, sits in the self-employed buying before selling guide, which is written for that question rather than for the pricing question.
Which bridging loan fees are negotiable?
The rule of thumb that holds across the sample is simple: a charge set by a published schedule moves rarely, and a charge priced to your file moves often. Flat dollar bank fees, document preparation and discharge fees are schedule items. Percentage based establishment, application and risk fees are file items, and so is the term, which is often the more valuable thing to negotiate because it changes the interest line rather than a few hundred dollars of fee.
From our broking, indicative
What we see move, and what we do not, on private and non-bank bridging term sheets:
- The lines that move most often are the percentage based establishment or application fee, the length of the interest budget or prepaid period, and whether an extension basis is agreed in advance rather than priced later.
- The lines that almost never move are flat dollar document, settlement and discharge fees, and third party costs such as valuation and legal, which the lender is passing through rather than earning.
- The most valuable thing on the sheet is usually not a fee at all. It is the payout clause and the extension clause, because both decide what happens on the day the plan changes.
- A lender will more often move on structure than on price, so asking for a longer budget or a cleaner discharge sequence tends to land better than asking for a discount.
Indicative only, based on deals we have placed, not a quote and not an offer, and deliberately qualitative because no figure here has a stated basis behind it. Actual terms depend on lender policy and your circumstances at the time of application. Not financial advice.
What does signing an indicative letter of offer commit you to?
Potentially the fees, even if the loan never draws. On the private lane the document that arrives first is usually an indicative letter of offer, and borrowers sign it to start the process rather than to accept a loan. In the 2024 Queensland decision above, a borrower signed one for a $2.4 million facility, the purchase did not proceed, the borrower asked for the search and valuation fees back, and the lender instead demanded about $366,000 in fees payable under that letter, along with caveats and personal property securities registrations lodged to secure them. The court found the fee clauses were not unfair and the claim failed.
Read as a pricing fact rather than as a legal one, that means the commitment fee, the charging clause and the security the lender may lodge for its own fees are live from signature, not from settlement. Before signing an indicative letter, ask what is payable if the loan does not proceed, what the lender may register against your property to secure those amounts, and whether the search and valuation fees are refundable. Those are cheaper questions than the alternative.
What to ask a bridging lender in writing before you sign
Six questions, sent by email so the answers are on the record. Each one targets a line that is either unpublished or unsettled across the sample, which means the only source for it is your own facility documents.
- If the property sells early, what happens to unused prepaid interest or an undrawn interest budget? Refunded, applied to the payout, or neither. No lender in the sample publishes a rule.
- On what basis will an extension be priced, and is that basis fixed now? Extension pricing is unpublished across the whole sample.
- What is the default margin, and does it apply to the whole balance or only to arrears? No Australian bridging lender read for this page publishes a default margin.
- Is the discharge fee charged per loan or per settlement activity? A two stage discharge is charged twice on at least one product read.
- Is the LVR measured against both properties or only the one being retained, and does it include the interest budget? This is what makes 80 per cent from one lender smaller than 75 per cent from another.
- What are the outlays on top of the quoted legal fee, and what is the realistic range? Legal is quoted as a base plus outlays on the private lane, and the outlays are the part that moves.
On a regulated contract, question one is not a favour you are asking. The information statement every lender must give a borrower under the National Credit Code says the borrower may write at any time asking for a statement of the payout figure as at any date they specify, may also ask for details of how that amount is made up, and the credit provider must supply it within 7 days. So the way to settle the prepaid interest question before you sign is to ask for a worked payout figure at an assumed early settlement date. On a business purpose bridge outside the Code that entitlement does not exist, which makes getting the same answer in writing before documents are issued more important, not less.
How do you compare two bridging loan offers side by side?
Convert both to one number, total dollars over your realistic term, and only then look at anything else. On the worked example above, ranking by headline rate would have picked the more expensive offer. Ranking by comparison rate would have been worse still, because two of the five products read publish a comparison rate below their own bridging rate.
| Line on the term sheet | Use it to compare? | Why |
|---|---|---|
| Total dollars of interest over your realistic term | ✓ Yes | The only interest figure that reflects how long you will actually hold the facility |
| Every lender fee converted to a dollar figure | ✓ Yes | A percentage fee and a flat fee cannot be compared until both are in dollars |
| Net funds you actually receive at settlement | ✓ Yes | Prepaid interest reduces the advance, so the face amount is not what lands |
| The payout clause and the extension basis, in writing | ✓ Yes | They decide the cost on the day the plan changes, which is the day pricing matters most |
| Discharge charged per loan or per settlement activity | ✓ Yes | A two stage discharge doubles the charge on at least one product read |
| The headline rate on its own | No | Reversed by the fee stack on the worked example above |
| A comparison rate built on a 25 year term | No | It describes a hypothetical loan no bridge resembles, and it runs both above and below the rate |
| A maximum LVR quoted without its denominator | No | 80 per cent measured one way can advance less than 75 per cent measured another |
| Fees quoted as "from", with no cap | No | An uncapped figure cannot be added to a total |
| Approval speed | No | It prices nothing, though it may decide whether the deal happens at all |
Stress test both offers before you rank them
Run each offer again on the assumptions that actually go wrong, because the ranking often changes. Four tests, in the order they are most likely to bite:
- Add 3 months to the term. A percentage fee does not change, so the offer with the larger fee gets relatively cheaper as the term lengthens, and the offer with the higher rate gets worse. The ranking on your expected term is not the ranking on your realistic one.
- Take 10 per cent off the valuation. Recalculate the advance at each lender's maximum LVR and see which offer still completes the purchase. An offer that cannot fund settlement is not a cheaper offer.
- Charge the discharge twice. If either sheet bills per settlement activity, assume a two stage discharge, because a bridge frequently discharges two securities on 2 days.
- Apply the rate step. Where a rate increases after a set period, run the full term at the stepped rate rather than the headline one, then compare again.
If you want the arithmetic run on two real sheets rather than on an example, that is a short conversation and it needs the two term sheets, the expected sale timing and the security details. You can start it through the eligibility check. For the surrounding decisions, the property and development finance hub covers the rest of the lane, and how private lending works covers the funder side of the private option.
Bridging loan pricing is three independent variables wearing one number. The rate is set by lane, the fee stack is set by whether it is a flat charge or a percentage, and the interest treatment decides what you owe on the day you discharge. Published Australian figures on 14 September 2026 show a comparison rate that runs both above and below the bridging rate depending on the product, a statutory 48 per cent cap that expressly does not apply to a bridging finance contract, and a worked 6 month facility where the higher advertised rate was the cheaper deal. The costs that apply when the sale runs late are the only ones nobody publishes: the extension price, the default margin, and on the bank lane the right to cancel the limit altogether.
Key takeaway: price a bridging loan as total dollars over your real term, and agree the payout and extension clauses in writing before you read the rate.Frequently Asked Questions
There is no single rate, because the three lending lanes price separately. Across the Australian bridging pages read at source on 15 September 2026, non-bank rates ran from 6.31 to 9.24 per cent per annum with most between 8.29 and 8.99, bank rates ran from 9.28 to 9.42 per cent on the three products publishing one, and only one private funder published a rate at all. Those bands are indicative and none is an offer. Which lane can take you is settled first in the bridging loans without a bank guide.
Yes, on almost every published sheet, and the gap is structural rather than just a higher rate. A bridging facility is short, priced for a term measured in months, and usually carries a percentage based establishment fee that a standard home loan does not. Because that fee does not shrink with the term, the shorter the bridge the more it costs in effective terms, the opposite of how borrowers expect a short loan to behave. Four cheaper routes are compared in do you actually need a bridging loan.
A risk fee is a separate charge for a file the lender prices as riskier than its standard product, and sits alongside, not instead of, the establishment fee. It is not universal: one non-bank product read on 15 September 2026 publishes a risk fee of nil, and one private funder publishes 0.75 per cent. Where charged, it is priced to the file rather than set by a schedule, which makes it one of the more negotiable lines. Which lines move on a private file is in what private lenders need to fund quickly.
An interest budget is an amount built into the approved loan so the facility funds its own interest during the bridging period, which is why no monthly repayment is required. One Australian non-bank publishes it in exactly those terms and sets the period to suit the applicant, to a maximum of 2 years. Because it is drawn only as interest falls due, an early sale means the unused part is never drawn, so it is not owed. Closed and open bridges are budgeted differently, as closed or open bridging loan sets out.
Sometimes, and it is one of three treatments on Australian bridging term sheets. The products read on 15 September 2026 used capitalisation, prepaid interest and an interest budget, and one private funder offers prepaid or capitalised interest as alternatives on the same product. What the three have in common is that you make no monthly repayment; what separates them is what is owing on the day you discharge, so the term sheet needs reading on that point specifically. What capitalisation does month by month is in the worked example on peak debt.
The comparison rate on a bridging loan is a rate calculated on a stated amount of credit over a stated term under regulation 71 of the National Consumer Credit Protection Regulations 2010, and on bridging products that term is often 25 years, which no bridge runs for. It can therefore sit either above or below the actual bridging rate: of five Australian products read on 14 September 2026, three published a comparison rate above the rate and two below it. The mechanics of the calculation are set out in the comparison rate glossary entry.
There are exit costs on every bridging loan read for this page, though they are rarely labelled exit fees. Discharge fees ran from $350 to $450 on the products read on 15 September 2026, and on at least one the discharge is charged per settlement activity rather than per loan, so a two stage discharge is charged twice. ASIC states early termination fees on regulated residential loans have been prohibited since 1 July 2011, which does not reach a business purpose bridge. Extension pricing is in bridging loan expired and not sold.
Peak debt is the total the lender assesses while both properties are held: the balance owing on the existing loan, plus the purchase price of the new property, plus purchase costs, plus any interest budget or capitalised interest added to the facility, less any deposit or cash you contribute. It matters because the maximum LVR is measured against that figure rather than against the new loan alone, and the definitions differ by lender. The instrument peak debt drives you towards is set out in the bridging, caveat or second mortgage guide.
Not in the bank lane, where the products read on 14 September 2026 charge interest as it accrues, allow extra repayments and publish no minimum charged term. In the private lane the same effect appears without the label, because interest for the whole term is deducted from the advance at settlement, so a bridge that settles early has already paid for weeks it did not use. Whether any comes back depends on the payout clause. The same trap on a second mortgage is in when a bridging loan is really a second mortgage.
It depends on the payout clause, and no lender in the sample publishes a general rule. Two positions circulate, that unused prepaid interest is refunded and that it is applied to the balance in the payout calculation, and they produce different amounts at settlement. One private funder this desk deals with rebates unused full months but not part months. Ask for the treatment in writing before documents are issued. What an early sale does to the facility as a whole is in sold early or sold for less.
The facility does not quietly continue. The lender either extends it on terms priced at that moment or the loan moves to its default rate, and no Australian lender document read on 15 September 2026 publishes a price for either. On the bank lane the facility is often written as a credit limit the lender may reduce or cancel at any time, after which the total owing becomes payable. Both costs are set when your leverage is lowest. The sequence is in bridging loan expired and not sold.
There is no single normal: the fee is calculated differently in each lane. On the pages read on 15 September 2026 the bank lane charged a flat $600, the non-bank lane charged 0.60 to 2 per cent of the loan, and no private funder published an establishment fee at all. So it sits above everything published on that date, which does not make it wrong on a private file, but does make it the number to test against what the facility nets you. The private fee stack is in private bridging loans for business.
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