How much can I borrow with a bridge loan?

With a bridge loan, you can usually borrow up to 80% of the combined value of your current and new homes (not including the amount you owe on your current home). To cover the rest, you’ll need strong equity or cash reserves. The exact amount depends on your home's equity, the new property’s value and the lender’s criteria.

Is a bridge loan risky?

Like any loan, bridge loans come with risks. They often carry higher interest rates and APRs than traditional loans. If your current home doesn’t sell, you could be stuck with two mortgages—a serious financial strain. In the worst case, missed payments could lead to foreclosure. That’s why it’s crucial to have a solid repayment plan in place before moving forward.

Do I need to sell my home within a certain time?

Yes. Bridge loans usually come with a set time frame—typically a few months to a year—to sell your current home. It’s important to have a realistic plan to sell within that window to avoid added interest, penalties or the need to refinance. Missing the deadline can increase financial pressure, so timing is key.

6 min read

What is a bridge loan?

Timing is everything in real estate, and sometimes you find yourself in a situation where you want to buy a new place while still paying off another. That’s where bridge loans come in. These short-term financing solutions are designed to help you to transition from one home to the next without getting stuck in the middle. Let’s break down how they work, when to use them and what to watch out for.

September 21, 2026

How does a bridge loan work?

A bridge loan works by using the equity in your existing property to provide you the cash needed to purchase a new one.

What Is a bridge loan in real estate?

A bridge loan does exactly what it sounds like—it bridges the gap between buying a new home and selling your current one. It provides you the money you need to move forward with a purchase, even if your current home hasn’t sold yet. A bridge loan is a good option for transitional moments when timing is everything.

A bridge loan is a good option for transitional moments when timing is everything.

How it works for homebuyers

Say that house you’ve been eyeing finally comes on the market, but you haven’t sold your existing property yet. A bridge loan can help cover the down payment on a new home and pay off the mortgage on your current one.

Typical terms and loan amounts

Bridge loans usually range from 6 to 12 months, though some can stretch up to three years. Loan amounts and terms can range from tens of thousands to over $1 million, depending on your equity and financing needs.

When should you use a bridge loan?

A bridge loan is especially useful when you’re ready to buy a new home but haven’t sold your current one yet. By getting cash upfront when your dream home hits the market, you get the flexibility to move forward without waiting for the sale on your older property to close.

In competitive real estate markets

In fast-moving real estate markets where multiple offers are common, a bridge loan can give you a serious edge. With immediate access to funds, you can make a strong, non-contingent offer when you find the perfect piece of real estate. That added flexibility can help make your offer stand out to sellers and boost your chances of landing the property you want.

When you have substantial home equity

If you’ve built up significant equity in your current home, a bridge loan could be a smart move. That equity serves as collateral, giving you access to the funds needed to make a down payment on your next property. It’s especially useful when you’re on a tight timeline and can’t afford to wait for your current home to sell before making your next move.

Pros and cons of bridge loans

Bridge loans can offer speed and flexibility when you need to move quickly—but like any financial tool, they come with both advantages and trade-offs worth considering.

Pros	Cons
Quick access to funds	Higher interest rates
No home-sale contingency	Two mortgage payments temporarily
Flexible payment structure	Risk if current home doesn’t sell on time

How to minimize the downsides

Lower your DTI: Reducing your debt-to-income ratio can help to increase your credit score and potentially secure more favorable interest rates and loan terms.
Plan your exit: Know exactly how you’ll repay, whether it be through a home sale, long-term financing or another method.
Keep a cash buffer: A cash reserve helps cover costs if you’re juggling two mortgages temporarily.

Bridge loan rates and alternatives

When considering a bridge loan, it’s important to understand the costs involved. Bridge loan rates are typically higher than traditional mortgage rates because of the short-term nature and added risk for lenders. These rates can vary depending on the lender, your credit profile and the amount of equity you have in your current home. If you're exploring different financing options, bridge finance loans may offer flexibility in navigating time-sensitive transactions, but always compare terms and conditions carefully.

Bridge loan vs other financing options

Before committing to a bridge loan, compare it with other options to see what fits your financial situation best. To help, we’ve lined up a quick comparison with two popular alternatives: HELOCs and home equity loans.

Bridge loan vs. HELOC

Feature	Bridge Loan	HELOC
Term	Typically 6–12 months (but can run longer)	Typically up to 10 years (but can run up to 30 years)
Interest Rate	Fixed or variable	Variable
Use Case	You want to buy a home before selling your current one	You want to renovate and have recurring access to funds
Repayment	Balloon payment, interest-only payments or retained interest.	Monthly minimums
Speed to Funding	Faster	Slower

Bridge loan vs. home equity loan

Feature	Bridge Loan	Home Equity Loan
Term	6–12 months (but can run longer)	5–10 years (but can run up to 30 years)
Interest Rate	Fixed or variable	Fixed
Use Case	You want to buy a home before selling your current one	You want to fund a one-time large expense
Repayment	Balloon payment, interest-only payments or retained interest.	Monthly fixed
Speed to Funding	Faster	Slower

How to qualify for a bridge loan

Qualifying for a bridge loan comes down to a few key factors. Before diving in, make sure you understand what lenders look for.

Home equity requirements

Equity is based on the home’s market value minus your mortgage balance. To qualify for a bridge loan, you’ll need substantial equity in your current home—usually 15% to 25% of its current value. Meeting this requirement is critical to both eligibility and determining how much you can borrow.

Income and debt considerations

To qualify for a bridge loan, lenders take a close look at your debt-to-income (DTI) ratio. Generally, your DTI should be no more than 50% of your gross monthly income. That means all your monthly debt payments—including the bridge loan—should stay within half of what you earn before taxes. They’ll also review your credit score, job history and other financial obligations to gauge your ability to repay.

Timeline and repayment planning

Bridge loans are typically faster to secure than traditional loans, with funding often available in just a few days to a couple of weeks. Terms usually run from 6 to 12 months, with some requiring interest-only payments—or none at all—until a lump sum is due at the end. Plan your repayment so the sale of your current home covers the payoff. Timing and structure of the loan term are key to avoiding added stress.

PRO TIP

Buying a fixer-upper? A bridge loan can help you secure the property first, then refinance into a renovation loan once your current home sells.

Bridge Loan FAQs

With a bridge loan, you can usually borrow up to 80% of the combined value of your current and new homes (not including the amount you owe on your current home). To cover the rest, you’ll need strong equity or cash reserves. The exact amount depends on your home's equity, the new property’s value and the lender’s criteria.
Like any loan, bridge loans come with risks. They often carry higher interest rates and APRs than traditional loans. If your current home doesn’t sell, you could be stuck with two mortgages—a serious financial strain. In the worst case, missed payments could lead to foreclosure. That’s why it’s crucial to have a solid repayment plan in place before moving forward.
Yes. Bridge loans usually come with a set time frame—typically a few months to a year—to sell your current home. It’s important to have a realistic plan to sell within that window to avoid added interest, penalties or the need to refinance. Missing the deadline can increase financial pressure, so timing is key.