But Precise Mortgages has said it will only charge interest as the money is released to the borrower rather than on the entire amount from day one.
The intermediary lender claimed it became aware of the practice when assessing a £1.9m deal over 12 months.
Precise said it and another well known bridging lender were both quoting a rate of 1.15% per month but the interest charged was £28,400 less with Precise Mortgages, a difference of 0.125% per month.
This was as a direct result of only charging interest as and when the money has been released to the borrower’s account rather than on the whole retained portion from day one.
Alan Cleary, managing director of Precise Mortgages, said: “Borrowers and indeed many brokers are probably not aware of the inconsistent nature of how interest is calculated by bridging lenders.
“If all bridging lenders applied the method we use it would save borrowers over £12m per year in interest payments.
“We believe in being transparent and in treating customers fairly so that intermediaries can reliably advise their clients on the most appropriate course of action.
“I would recommend that all intermediaries carefully check the total amount repayable to ensure they are comparing like with like and ask the lender to confirm their interest charging policy if there is any doubt.”
