Bridge Loan Calculator
Calculate your bridge loan payments, interest costs, and amortization schedule
Bridge Loan Payment Type
Property Details
Current Property
New Property
Loan Terms
Loan Summary
Understanding Your Bridge Loan
A bridge loan is a short-term financing option that helps you "bridge" the gap between the purchase of a new property and the sale of your existing one. This calculator helps you understand the costs involved.
With interest-only payments, you'll only pay the interest due each month, not the principal. The entire principal amount will be due when the loan matures after 12 months.
Loan Visualization
This visualization shows how your payments break down between principal and interest over the loan term.
$928,725
93.0% of total
$69,654
7.0% of total
How to Use This Bridge Loan Calculator
- Enter your current property value and mortgage details
- Input your new property purchase price and down payment
- Adjust the interest rate and loan term as needed
- View your estimated monthly payments and total costs
Understanding Bridge Loan Calculations
Bridge loans are short-term financing options that help homeowners and investors "bridge" the gap between the purchase of a new property and the sale of an existing one. Our calculator helps you estimate the financial implications of this type of loan.
Key Factors in Bridge Loan Calculations
- Loan Amount: Typically based on the equity in your current home plus the amount needed for the new property purchase.
- Interest Rate: Bridge loans generally have higher interest rates than traditional mortgages, typically 2-4% higher.
- Loan Term: Most bridge loans have terms between 6 months and 1 year.
- Payment Type: Options include principal and interest payments, interest-only payments, or balloon payments.
- Origination Fee: Most bridge loans have an origination fee between 1-3% of the loan amount.
Common Bridge Loan Payment Types
Our calculator offers three main payment options:
Interest-Only
Pay only the interest each month, with the full principal due at the end of the loan term. This minimizes monthly payments but requires paying the full loan amount when the term ends.
Balloon Payment
Make interest payments during the loan term with a large "balloon" payment at the end. Common when you expect to sell your existing property to repay the loan.
Principal & Interest
Regular payments that include both principal and interest, similar to a traditional mortgage. This option is less common for bridge loans but may be suitable for longer terms.
Bridge Loan vs. Other Financing Options
| Type | Term | Interest Rate | Best For |
|---|---|---|---|
| Bridge Loan | 6-12 months | 7-12% | Quick property transitions |
| HELOC | 5-30 years | 5-9% | Ongoing access to funds |
| Traditional Mortgage | 15-30 years | 3-7% | Long-term home purchases |
When to Consider a Bridge Loan
- You've found your dream home but haven't sold your current property
- You need to make a non-contingent offer in a competitive market
- You're confident your current home will sell quickly
- You need funds for a time-sensitive investment opportunity
Pro Tip
Bridge loans work best when you have a clear exit strategy, such as the sale of your current home. Be sure to factor in all costs, including origination fees, interest, and potential prepayment penalties when calculating your total expenses.
Frequently Asked Questions
How quickly can I get a bridge loan?
Bridge loans can typically be funded in 2-4 weeks, depending on the lender and your financial situation. This is faster than traditional mortgages, which usually take 30-45 days to close.
What are the risks of a bridge loan?
The main risk is if your current home doesn't sell as quickly as expected, leaving you responsible for two mortgage payments. Bridge loans also have higher interest rates and fees compared to traditional financing.
Can I get a bridge loan with bad credit?
While it's possible, most bridge loan lenders prefer borrowers with good to excellent credit (scores of 680+). If your credit is below this threshold, you may face higher interest rates or need to explore alternative financing options.
When to Consider a Bridge Loan
Bridge loans are particularly useful in these scenarios:
- Hot real estate markets where you need to make a competitive offer without a home sale contingency
- When you've found your dream home but haven't sold your current property
- During construction gaps when building a new home but haven't sold your existing property
- For time-sensitive investment opportunities requiring quick funding
Important Note:
Our calculator provides estimates based on the information you input. For the most accurate information, consult with a qualified mortgage professional who specializes in bridge loans. This calculator is for educational purposes only and does not constitute financial advice.