How to do a true cost calculation on a mortgage

Yield on cost is a build to rent scheme's net operating income divided by its total development cost. Institutional investors use it alongside profit on cost to judge whether a scheme returns enough relative to the yield at which stabilised blocks trade: for development to create value, the yield on cost must exceed the stabilised yield.

Each lender or provider quotes its own terms, and the charge differs by product. An executor loan usually charges interest on the sum advanced, rolled up and repaid by the estate. An inheritance advance written as a sale of part of a share charges fees deducted from the share at distribution. Bridging on inherited property charges a monthly rate set for the loan-to-value and the exit. Compare each with HMRC's late payment interest on Inheritance Tax, Bank Rate plus 4 percentage points, which was 7.75% a year as at October 2026, and with the Direct Payment Scheme, which uses the deceased's own money.

The costs of a bridging loan usually include monthly interest of around 0.6%-1.5%, a lender arrangement fee typically near 2%, valuation fees, and legal fees for both borrower and lender. Some loans also include an exit fee. Interest is charged only for the period the loan is outstanding.

A mortgage valuation can cost nothing or several hundred pounds, depending on the lender, property value and valuation type. Some lenders include a free basic valuation, especially on residential mortgage products. More detailed surveys, such as a homebuyer report or building survey, usually cost extra.

Mortgage broker costs in the UK vary, as brokers may charge a fixed fee, a percentage of the loan, receive lender commission, or use a combination, and FCA rules require all fees and remuneration to be disclosed before advice is provided.