Bridge Loan Calculator
Swing loan payments, points, and true annualized cost.
Your Bridge Loan Calculator Result
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Your detailsInput Parameters
Loan Details
Example rate, not current market data. Enter the rate on your loan or quote.
Fees
Bridge loans are almost always interest-only — the full principal is repaid as a balloon when your existing property sells or permanent financing closes.
2 points on $200,000 = $4,000, plus $1,500 in other fees.
The full principal falls due after 9 months. If your sale slips past that date you will need an extension, which usually costs additional points.
The quoted rate is 10.5%. Spreading the fees over just 9 months pushes the true annualized cost to 14.17% — the shorter the bridge, the more the points hurt.
Loan amount less points and fees, if those are deducted from proceeds rather than paid separately.
Analysis
| Period | Interest | Principal | Balance |
|---|---|---|---|
| 1 | $1750 | $0 | $200000 |
| 2 | $1750 | $0 | $200000 |
| 3 | $1750 | $0 | $200000 |
| 4 | $1750 | $0 | $200000 |
| 5 | $1750 | $0 | $200000 |
| 6 | $1750 | $0 | $200000 |
| 7 | $1750 | $0 | $200000 |
| 8 | $1750 | $0 | $200000 |
| 9 | $1750 | $0 | $200000 |
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Open calculatorHow Bridge and Swing Loans Work
A bridge loan — also called a swing loan or gap financing — is short-term borrowing that covers the interval between two events, most commonly buying a new home before the existing one has sold. Terms typically run 6 to 12 months, and the structure differs from ordinary lending in three important ways.
- Interest-only payments. You service the interest monthly and repay the entire principal as a balloon when your exit event happens. Nothing amortizes.
- Priced with points. Expect 1-3 points (1-3% of the loan) charged upfront, plus appraisal, title and origination fees.
- Rates well above conventional. Commonly 2-5 percentage points over a standard mortgage, reflecting the short term and the risk that your exit slips.
$200,000 Bridge Loan, 10.5%, 9 Months, 2 Points
Interest-only payment: $1,750.00/month
Total interest over 9 months: $15,750
Points (2%): $4,000
Total cost of borrowing: $19,750
Annualized all-in cost: 13.17%
That last line is the one to pay attention to. The loan is quoted at 10.5%, but because the points are absorbed over only nine months rather than spread across years, the true annualized cost is 13.17%. The shorter the bridge, the more the fees hurt — an identical loan repaid in four months annualizes above 16%.
The Risk That Actually Matters: Your Exit Slipping
Bridge loans are underwritten on the assumption that a specific event will happen by a specific date. The entire risk of the product sits in that assumption.
If your existing property has not sold when the term expires, you face an extension — usually costing additional points — or a default on a loan secured against your home. In a slowing market this is not a remote scenario, and it is the reason bridge lending is considered high-risk borrowing rather than a routine financing choice.
Before taking one, work through these:
- Price the extension now. Ask what a 3-month extension costs and whether it is guaranteed or at the lender's discretion. Build that into your worst case.
- Stress-test the sale price. If your existing property sells for 10% less than you expect, does the proceeds still clear the bridge balance?
- Compare against a HELOC. If you have equity and time to arrange it, a HELOC is typically several points cheaper and carries no balloon date. Lenders often will not open one on a property already listed for sale, so this has to be arranged in advance.
- Consider a sale contingency instead. Making your purchase contingent on selling costs you nothing but weakens your offer. In a buyer's market that trade is often worth it; in a competitive market it may not be.
Bridge financing is a legitimate tool when the timing genuinely cannot be reconciled another way. It is an expensive way to avoid moving twice.