Bridge Loan Calculator
Estimate the cost of a short-term bridge loan — interest-only monthly payments, origination points and the total payoff amount.
How it works
Monthly interest = amount × annual rate ÷ 12 · Origination fee = points% × amount · Total cost = total interest + origination fee · Payoff = amount + total interest (principal due at end)
A bridge loan is short-term financing that “bridges” the gap between buying a new home and selling your old one, or between a purchase and permanent financing. They are usually structured as interest-only, so the monthly payment covers just the interest and the whole principal is repaid in a lump sum when your old property sells or a longer loan closes. Rates and origination points run well above ordinary mortgages because the loan is fast, short and higher risk — which is why the total cost matters more than the low monthly payment suggests.
Worked example
A $150,000 bridge loan at 10% for 6 months costs 150,000 × 0.10 ÷ 12 = $1,250 a month in interest. Over 6 months that is $7,500 of interest, plus a 2% origination fee of $3,000 — about $10,500 in total cost. At the end you repay the $150,000 principal (a $151,250 final payoff including the last month’s interest).
Frequently asked questions
How is a bridge loan repaid?
Most bridge loans are interest-only, so you make small monthly interest payments and then repay the entire principal at once — typically from the proceeds of selling your existing home or from closing a permanent mortgage. Some bridge loans even defer all payments until the payoff.
Why are bridge-loan rates so high?
They are short-term, fast to fund, and carry more risk for the lender since repayment depends on a sale or refinance that might be delayed. Expect rates several points above a standard mortgage plus origination points, which makes them costly if the exit takes longer than planned.
When does a bridge loan make sense?
When you have found a new home but your current one has not sold, and you need its equity for the down payment. It buys time and avoids a contingent offer, but only pencils out if you are confident the old property will sell quickly at a reliable price.
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This is an educational estimate, not financial advice. Lenders use their own rounding, fees, mortgage-insurance rules and credit terms — confirm exact figures with your lender or a licensed advisor.