Bridge Loan Calculator

Calculate short-term bridge financing costs

Current & New Property
Bridge Loan Terms
Bridge Loan Summary
Available Equity: $0.00
Bridge Loan Needed: $0.00
Monthly Interest: $0.00
Total Interest Cost: $0.00
Origination Fee: $0.00
Total Bridge Cost: $0.00
Bridge Loan Caution
High rates (8-12%), short terms (3-12 months), and requires home sale plan. Only use when necessary.

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What is a Bridge Loan?

A bridge loan is short-term financing that "bridges" the gap between buying a new home and selling your current one. It provides funds for a down payment on a new property before your existing home sells.

Bridge loans are secured by your current home's equity and typically last 6-12 months. They have higher interest rates than traditional mortgages and require a clear exit strategy (usually the sale of your current home).

How to Use This Calculator

Step 1: Enter your current home's estimated value.
Step 2: Input your current mortgage balance.
Step 3: Enter the new home purchase price.
Step 4: Input available cash for down payment.
Step 5: Review calculated bridge loan amount.
Step 6: Add bridge loan rate, term, and fees.
Step 7: Click "Calculate" to see total costs.

Bridge Loan Risks

  • High Interest: Rates typically 8-12%, much higher than mortgages.
  • Short Timeline: Must sell current home within loan term (6-12 months).
  • Double Payments: Paying bridge loan interest PLUS potentially two mortgages.
  • Home Sale Risk: If your home doesn't sell, you may face default or extension fees.
  • Qualification: Must qualify to carry multiple housing payments.
  • Costs: Origination fees, appraisal, and closing costs on top of high interest.

Alternatives to Bridge Loans

  • Home Equity Loan/HELOC: Use existing home equity, lower rates than bridge loans.
  • Contingent Offer: Make offer on new home contingent on selling current home.
  • Rent Back: Sell home, rent it back temporarily while finding new home.
  • Temporary Housing: Sell first, rent short-term, then buy.
  • 401(k) Loan: Borrow from retirement (risky, but may be cheaper).
  • Gift/Private Loan: Family assistance or private lender.

Frequently Asked Questions

How much equity do I need for a bridge loan?
Typically 20% equity minimum in your current home. Lenders want cushion in case home value drops. Maximum bridge loan is usually 80% of current home value minus existing mortgage balance.
How long does a bridge loan last?
Typically 6-12 months, sometimes up to 24 months. Terms are short because these are temporary financing. You need a clear exit strategy—usually selling your current home or securing permanent financing.
What happens if my home doesn't sell?
You're in a difficult position. Options: extend bridge loan (fees apply), refinance to permanent loan on both properties (if you qualify), rent out current home, or potentially face default. This is the major risk of bridge loans.
Can I get a bridge loan with bad credit?
Difficult but not impossible. Hard money lenders may offer bridge loans with 650+ credit but at very high rates (12%+). Strong equity position helps. Traditional banks typically require 700+ credit scores.
Do I make payments on a bridge loan?
Often interest-only payments during the term. Some lenders allow rolling interest into the loan balance (to be paid at sale). Expect monthly payments of several hundred to several thousand dollars depending on loan size.
Is a bridge loan the same as a HELOC?
No. HELOC is a line of credit with lower rates, longer terms, and no immediate repayment pressure. Bridge loans are short-term, higher-rate, and must be repaid quickly. A HELOC is often a better alternative if you can qualify.
What fees come with bridge loans?
Origination fees (1-3%), appraisal fee, title fees, administrative fees, and potentially extension fees if you exceed the term. Total closing costs often 2-5% of loan amount—higher than traditional mortgages.
Should I use a bridge loan or sell first?
Selling first eliminates risk but may require temporary housing. Bridge loans let you buy first but add cost and risk. Consider your market—hot markets favor selling first; competitive buyer markets may require bridge loans to compete.
Can I use a bridge loan for investment property?
Yes, but terms are less favorable. Rates higher, terms shorter, down payment larger (25-30%). Hard money lenders specialize in investment bridge loans. Exit strategy becomes even more critical.
What's the difference between open and closed bridge loans?
Closed bridge loans have a fixed exit date and known repayment source (home under contract). Open bridge loans have no fixed exit and are riskier for lenders, commanding higher rates. Most residential bridge loans are closed.
Can I get a bridge loan from my current lender?
Some banks offer bridge loans, but not all. Shop community banks, credit unions, and specialized lenders. Mortgage brokers can access multiple bridge loan sources. Compare at least 3 offers.
Should I pay points on a bridge loan?
Usually not worth it given short term. Points lower rate but you pay interest for only 6-12 months. Calculate break-even—rarely makes sense for temporary financing. Focus on total cost including fees.