What Is a Bridge Loan?
A bridge loan is short-term financing used to 'bridge' the gap between buying a new home and selling your current one. Typically lasting 6-12 months, bridge loans allow you to access the equity in your current home for a down payment on a new home.
Bridge Loan Rates & Terms
Bridge loan rates range from 6% to 14%, significantly higher than conventional mortgages. Terms are usually 6-12 months, with closing costs of 1.5-3% of the loan amount. Most bridge loans are interest-only.
How Does a Bridge Loan Work?
The lender advances funds based on your current home's equity. You make interest-only payments during the bridge period. Once your old home sells, you use the sale proceeds to pay off the bridge loan in full.
Key Features of Our Bridge Loan
Interest-Only Period
Model interest-only bridge terms of 6-36 months
Dual-Home Cost
See the cost of carrying two homes simultaneously
✅ Pros
- Buy a new home before selling
- No contingent offers — stronger negotiating position
- Access equity without selling first
⚠️ Cons
- Higher interest rates than standard mortgages
- Risk of carrying two homes if old one doesn't sell
- Not all lenders offer bridge loans
Bridge Loan vs Alternatives
Bridge Loan vs Home Equity Loan (HELOAN)
HELOANs offer lower rates and longer terms but require qualifying based on debt-to-income ratio. Bridge loans are often easier to qualify for.
Bridge Loan vs HELOC
HELOCs provide flexible access at lower rates but can be difficult to get if your home is listed for sale. Bridge loans are designed for buy-before-sell.
How to Qualify for a Bridge Loan
Lenders require significant equity in your current home (20-30%), good credit (680+), and low debt-to-income. Your current home may need to be actively listed for sale.