Bridge Loan Cost Calculator (US 2026)

What Is a Bridge Loan and When Does It Make Sense?

A bridge loan is short-term financing — typically 6 to 12 months — that uses the equity in your current home as collateral so you can buy a new home before the old one sells. It "bridges" the timing gap between purchase and sale. Bridge loans are nearly always interest-only with a balloon principal payment due when you close on the sale of your old home. According to Bankrate 2026 bridge loan averages, US bridge loan rates currently range 8% to 12% APR, with origination fees of 1% to 3%, making them noticeably more expensive than conventional mortgages.

Bridge loans make sense when you have found a home you cannot afford to lose, your current home is highly likely to sell quickly (typically less than 6 months on market in your zip code), and you have at least 20% equity in the existing property. They make less sense when your old home might sit on the market for many months, because the monthly carrying cost compounds quickly at 10%+ rates.

How Bridge Loan Total Cost Is Calculated

This calculator uses the standard short-term real estate financing formula. The total cost has four components:

• Interest: For interest-only loans, monthly interest = (principal × annual rate) ÷ 12, paid each month for the loan term. Total interest = monthly interest × term in months. For deferred-interest loans, interest accrues but is paid only at payoff.
• Origination fee: A one-time charge of 1% to 3% of the loan amount, paid at closing. On a $200,000 bridge loan at 1.5%, that is $3,000.
• Exit / payoff fee: Some lenders charge 0.5% to 1% when the loan is repaid. Many bridge lenders waive this — check the loan estimate carefully.
• Closing fees: Appraisal ($300–$700), underwriting, document prep, recording — typically $500 to $1,500 combined.

For a $200,000 bridge loan at 10% APR for 9 months with a 1.5% origination fee, you pay roughly $15,000 in interest + $3,000 origination + $500 appraisal + $800 admin = about $19,300 total, on top of repaying the $200,000 principal at sale.

Bridge Loan vs HELOC vs Cash-Out Refinance

HELOCs (home equity lines of credit) at Federal Reserve 2026 average rates of 8.0%–9.0% are typically 2 percentage points cheaper than bridge loans, with no exit fee. The trade-off: a HELOC requires you to set up the line before you list your home for sale, because lenders generally will not open a HELOC on a property currently for sale. If your current home is already listed, the bridge loan is often the only option.

Cash-out refinances fall in between — typically 1.5–2 points above conventional rates — but they replace your existing first mortgage, which only makes sense if your current rate is similar to or worse than today's market. If you locked in a 3% mortgage in 2020–2021, refinancing into a 7%+ rate to extract equity is usually a poor trade-off compared to a 10% bridge loan that disappears in a few months.

Tips to Reduce Bridge Loan Cost

Three levers significantly cut total bridge loan cost:

• Shorten the term: Every month of carry at 10% on $200k is roughly $1,667 of interest. Pricing your old home aggressively to sell in 60 days instead of 180 days saves about $6,700.
• Negotiate the origination fee: Bridge lenders compete heavily. Getting offers from 3 lenders typically drops the origination fee from 2.5% to 1.5%, saving $2,000 on a $200k loan.
• Avoid exit fees: Many community banks and credit unions waive exit fees that aggressive private lenders charge — this is the single easiest line item to remove from the loan estimate.

Always run the bridge loan against a HELOC and a contingent offer (where your purchase contract is contingent on selling your old home). Last updated: May 3, 2026.