Exit fees - also called redemption fees - are charged by some bridging lenders when you repay the loan. They are typically calculated as a percentage of the loan amount and can add a meaningful cost if you haven't factored them in. Not all lenders charge them, and comparing total cost rather than headline rate is essential.
What Is a Bridging Loan Exit Fee?
An exit fee is a charge levied when the loan is redeemed. It is separate from the monthly interest and from any arrangement fee charged at the start. A typical exit fee is 1–2% of the loan amount, though some lenders charge a flat fee or a percentage of the original facility.
| Structure | Rate (pm) | Arrangement Fee | Exit Fee | Total Cost |
|---|---|---|---|---|
| Low headline, exit fee | 0.60% | 2% | 1.5% | £54,000 |
| No exit fee product | 0.70% | 2% | None | £41,500 |
| Mid-range, exit fee | 0.65% | 1.5% | 1% | £44,750 |
| No exit fee, higher rate | 0.75% | 2% | None | £43,750 |
When Does No Exit Fee Matter Most?
- Uncertain exit timing: if your exit date is flexible, exit fees on some products compound with the loan balance
- Large loan amounts: a 1.5% exit fee on a £2m loan is £30,000 - a significant sum
- Short loan periods: arrangement and exit fees have more impact relative to interest on short terms
- Commercial or semi-commercial: where multiple charges are already elevated
Which Lenders Charge Exit Fees?
Exit fee policies vary significantly between lenders and are not always obvious from marketing materials. As a general guide: some challenger bridging lenders and those targeting lower headline rates frequently include exit fees, while a number of mainstream specialist lenders have moved to no-exit-fee structures to remain competitive. The structure also varies - some charge on the original loan, others on the outstanding balance, and some on the gross facility.
How We Help
When we search the market for your case, we present options on a total cost basis - not just monthly rate. This means you can see clearly whether a lower-rate lender with an exit fee represents better value than a cleaner product without one.