A bridge loan is short-term financing that "bridges" the gap between buying a new property and selling or financing the old one. It prices differently from a mortgage: interest rates run 8–13%, there are 1–3 origination points, and the term is short — typically 6 to 18 months. Enter your loan to see the monthly interest carry, the fees, and the true cost of capital.
| Loan | Rate / Term | Monthly Interest | Total Interest | Points | All-in Cost |
|---|---|---|---|---|---|
| $150,000 | 8% / 4 mo | $1,000 | $4,000 | $3,000 | $8,500 |
| $300,000 | 9% / 6 mo | $2,250 | $13,500 | $6,000 | $21,000 |
| $500,000 | 10% / 12 mo | $4,167 | $50,000 | $10,000 | $61,500 |
All rows assume 2 origination points and $1,500 of other closing costs. Interest is interest-only (typical for bridge loans); a longer term on a larger loan drives cost up sharply because the same rate is charged for more months.
Bridge financing sits between a mortgage and hard money. Lenders price it on loan-to-value (LTV), the strength of the exit (a signed sale contract is strongest), and borrower experience. Typical terms as of 2026:
The headline rate understates the cost. If you borrow $300,000 at 9% for six months and pay 2 points, you pay $13,500 of interest plus $6,000 of points on money you held for half a year. Annualized, that is closer to 13–15%, not 9%. This calculator shows that effective annualized rate so you can compare a bridge against alternatives.
A HELOC on your current home, a home equity loan, a 401(k) loan, or negotiating a sale-leaseback with the buyer may all be cheaper. Bridge loans make sense mainly when speed matters (days, not weeks), when the property can't be mortgaged conventionally, or when the exit is contractually certain.
A bridge loan's value is timing, not price. In a competitive market, a buyer who can close in cash (or with bridge financing that behaves like cash) wins homes that contingent buyers lose. If a bridge loan lets you buy the house you want and then sell your old one without a sale contingency, the extra 4–5 percentage points of cost can be far cheaper than losing the deal or carrying two mortgages for a year.
The math flips when the exit is uncertain. Bridge lenders underwrite the exit; if your old home doesn't sell in six months, you may face an extension fee, a rate bump, or a forced price cut. Before signing, model the worst case — a 12-month term with two extensions — not the optimistic one.
Points are the hidden driver. Two points on a six-month loan is an annualized 4% of extra cost, which stacks on top of a 9% rate. The effective annualized rate this calculator shows — total cost of capital divided by principal, annualized — is the number to compare against a HELOC or home equity loan. If your HELOC is available at 8.5% and the bridge works out to 14% annualized, the HELOC is the cheaper capital unless the bridge is saving you a deal you cannot otherwise close.
Also watch for prepayment penalties and minimum interest clauses: many bridge loans charge a set number of months of interest even if you repay early. That clause can erase the benefit of a fast sale, so always ask for it in writing before you sign.
⚠️ Important: This calculator estimates interest and fees assuming an interest-only bridge loan. It does not include prepayment penalties, minimum-interest clauses, extension fees, or lender-specific charges, which vary widely. Bridge loans are secured by real property and carry foreclosure risk. Numbers are illustrative, not a loan offer.