The finance costs for a property development loan can vary significantly depending on factors such as the size and complexity of the project, the lender's terms and conditions, prevailing market conditions, and the borrower's financial profile. However, here are some typical finance costs that may be associated with a property development loan:

1. Interest Rates: Interest rates are usually higher than those for standard residential mortgages due to the higher risk associated with property development projects.

2. Establishment Fees: Charged on first drawdown and are usually calculated as a percentage of the loan amount and may range from 1% to 3.50% of the total loan value.

3. Exit Fees / Early Repayment Fees: Some lenders may charge exit fees if the loan is repaid before the end of the loan term.

4. Line Fees: Usually calculated as a percentage of the loan amount charged or capitalised monthly.

5. Legal Fees: It is standard practise for a borrower to pay for the legal costs of both sides of the transaction (lender and borrower).

6. Other Fees: Depending on the lender, borrowers may incur other fees such as drawdown fees, monitoring fees and administration fees.

A main bank lender typically refers to a major bank or financial institution that primarily focuses on providing loans and financial services to individuals, businesses, and organisations. These lenders are often well-established, widely recognised, and have a significant market presence.

Main bank lenders provide a lower cost funding option, however in consideration of the lower cost typically focus on funding lower risk transactions with an added layer of terms designed to de risk the project for the lender. An example would be a high level of presales, QS involvement and provision of a third party Contractors Performance Bond within the construction contract.

A non-bank lender is a financial institution or entity that provides loans and other financial services but does not hold a banking license. Non-bank lenders can offer a variety of financial products including personal loans, business loans, property development loans and other forms of credit. They often specialise in niche markets or specific types of lending, and they may have more flexibility in their lending criteria and processes compared to main bank lenders. In consideration of the additional flexibility non-bank funding options are more expensive than main bank lenders.

When assessing an application for residential development finance, lenders typically evaluate the following key criteria:

1. Loan-to-Value Ratio (LVR) : Measures the ratio of the loan amount to the appraised value of the property being developed. A lower LVR ratio indicates a lower level of risk for the lender, as it means the borrower has more equity/margin in the project.

2. Loan-to-Cost (LTC) Ratio: The loan-to-cost ratio measures the ratio of the loan amount to the total cost of the property development project. It includes both the purchase price of the property and the costs associated with development. Lenders use the LTC ratio to assess the borrower's equity contribution.

3. Interest Cover Ratio (ICR): For develop to hold transactions, the debt service coverage ratio measures the property's ability to generate enough income to cover its debt servicing obligations on completion. Lenders typically require a minimum ICR to ensure that the property generates sufficient cash flow to service the loan on completion.

4. Presale Cover Ratio: For develop to sell transactions, the lender will assess the ratio of net presales relative to the forecasted debt amount on completion.

A property finance broker is a professional intermediary who specialises in arranging finance for property-related transactions. These brokers act as intermediaries between borrowers (such as property developers, investors, or individuals) and lenders (such as banks, financial institutions, or private lenders). Their primary role is to connect borrowers with the most optimal financing options available in the market.

The fees charged by a property finance broker can vary depending on several factors, including the complexity of the transaction, the amount of financing involved, the services provided, and the broker's pricing structure. Most property finance brokers work on a commission basis, where they receive a percentage of the loan amount as compensation for their services.

The commission percentage typically ranges from 0.5% to 1.25% of the loan amount, but it can vary based on factors such as the size and complexity of the loan and if ongoing management of the loan is required from settlement.

Bridging Finance is a short-term loan designed to bridge a financial gap. It provides immediate funds for developers in between phases of a project or while awaiting external financing, such as a property sale or a long-term loan approval.