Free Tool
Bridging Cost Estimator
Calculate the total cost of a bridging loan before you apply. See establishment fees, interest, management fees, and your total cost of borrowing in one clear breakdown.
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How much does bridging finance cost in Australia?
Bridging finance in Australia typically costs between 9% and 18% per annum in interest, plus a one-off establishment fee and ongoing monthly management fees. The total cost depends on three key factors: the loan amount, the interest rate, and the term length. A $500,000 bridging loan at 12% per annum over 12 months will cost approximately $60,000 in interest, $8,250 in establishment fees (at 1.65%), and $3,000 in management fees — a total cost of approximately $71,250 or 14.25% of the loan amount. Shorter terms reduce interest costs significantly: the same loan over 6 months costs roughly $38,625 in total. Private lenders price based on property risk, LVR, and postcode category rather than the borrower's income, which means pricing is driven by asset quality rather than financial statements. Borrowers with lower LVRs, metro properties, and clean exit strategies will generally receive better rates.
What fees do private lenders charge?
Private lending fees typically fall into four categories. The establishment fee (also called an origination fee) is a one-off charge at settlement, usually 1.65% to 3% of the loan amount. This covers credit assessment, documentation, and loan setup. The interest rate is the ongoing cost of the capital, charged monthly on the outstanding balance, typically ranging from 9% to 18% per annum depending on the product, LVR, and risk profile. The loan management fee (LMF) covers ongoing administration and is usually $250 per month or 0.1% to 0.2% of the loan amount per month. Some products also include a risk fee, which is an additional charge reflecting the risk profile of the deal — Alphacon Capital's Resolve product notably does not charge a risk fee, making it the most cost-efficient option for eligible borrowers. There are no exit or early discharge fees with Alphacon Capital.
Is bridging finance worth it?
Bridging finance makes commercial sense when the cost of waiting exceeds the cost of borrowing. Common scenarios include purchasing a property at auction before selling an existing one, funding a time-sensitive development or renovation, securing a discounted asset that requires fast settlement, or bridging a gap while waiting for bank refinancing to complete. The opportunity cost of missing a deal often far outweighs the interest on a 3 to 12 month bridging loan. For example, if waiting 3 months for bank finance means losing a $200,000 discount on a property purchase, a $20,000 bridging cost is a clear net positive. The key is having a defined exit strategy — bridging loans work best when the borrower knows exactly how and when they will repay.
How to reduce your bridging loan costs
The most effective way to reduce bridging costs is to lower your LVR — a stronger equity position means lower risk for the lender and better pricing for the borrower. Keeping the term as short as practical saves significantly on interest: a 6-month term costs half the interest of a 12-month term. Choosing the Resolve product, where eligible, eliminates the risk fee entirely, which can represent a meaningful saving on larger loans. Having a clear, documented exit strategy (confirmed bank refinance, exchanged sale contract, or demonstrated repayment source) gives the lender confidence and may result in better terms. Finally, ensuring your application is complete and well-documented from the outset avoids delays that extend the loan term and increase total cost.
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