Bridge Loan Calculator
Estimate your short-term financing costs between home sales
Bridge Loan Summary
Table of Contents
Bridge Loan Calculator
Quickly estimate your short-term financing costs with this easy-to-use Bridge Loan Calculator.
A bridge loan is a short-term loan used to bridge the gap between the sale of your current home and the purchase of a new one. It provides immediate cash flow before permanent financing becomes available. Our Bridge Loan Calculator helps you understand how much interest you’ll pay, how much funding you need, and how this financing impacts your transition between homes.
🏠 What is a Bridge Loan?
A bridge loan, also known as interim financing or a gap loan, is a temporary loan that enables homebuyers to purchase a new property before selling their existing home. It’s commonly used when homeowners want to avoid making a contingent offer or want immediate funds for a down payment on a new house.
This type of loan is typically:
- Short-term, lasting 6–12 months
- Secured against your current home
- Paid off once the original home is sold
Bridge loans are especially helpful in competitive housing markets or when aligning sale and purchase timelines is difficult.
🧾 What You Can Calculate
This Bridge Loan Calculator helps you determine:
- Your interest-only monthly payments
- Total interest costs over the loan term
- Net proceeds from the sale of your existing home
- The cost of financing the transition from one home to another
🔢 What to Enter in the Calculator
- Home Sale Price ($): How much you expect to sell your current home for.
- Existing Mortgage Balance ($): The remaining loan balance on your current home.
- Bridge Loan Amount ($): How much you need as a bridge loan to cover the down payment or immediate purchase needs.
- Interest Rate (%): The annual interest rate of the bridge loan.
- Loan Term (Months): How long you expect the bridge loan to last (usually between 3–12 months).
🧮 How the Bridge Loan is Calculated
Bridge loans are typically interest-only loans. That means you pay only the interest monthly, and repay the principal when you sell your old home or secure long-term financing.
The calculator uses this formula:
Monthly Interest Payment =(Bridge Loan Amount × Annual Interest Rate ÷ 100) ÷ 12
Total Interest =Monthly Interest Payment × Loan Term (months)
This allows you to quickly see the cost of borrowing during the transition period.
📈 Example Scenario
Let’s say you are:
- Selling your home for $500,000
- You still owe $300,000 on your mortgage
- You need a $100,000 bridge loan
- The interest rate is 7.5%
- The loan will last 6 months
The calculator shows you:
- Your monthly interest payment will be approximately $625
- Your total interest cost over 6 months will be $3,750
- Once you sell your home, you’ll repay the bridge loan with the proceeds
This helps you understand the short-term financial commitment and plan your cash flow.
🏆 Benefits of Using a Bridge Loan
- No missed buying opportunities: Buy a new home before selling your current one.
- Flexible terms: Short-term financing tailored to your home sale timeline.
- Avoid double moves: You won’t need to move into temporary housing between homes.
- Faster transactions: Make stronger offers without financing contingencies.
⚠️ Things to Watch Out For
- Higher interest rates: Bridge loans usually have higher interest than standard mortgages.
- Short repayment period: You need a solid plan to sell or refinance quickly.
- Risk of two mortgages: If your old home doesn’t sell on time, you may carry two loans temporarily.
🧑💼 Who Should Use This Calculator?
- Homebuyers moving up or relocating
- Real estate agents advising clients
- Real estate investors flipping or upgrading properties
- Anyone exploring gap financing options
📲 Simple, Fast, and Mobile-Friendly
This calculator is designed for speed and clarity, with no downloads or signups required. Whether you’re on desktop or mobile, just plug in your numbers and hit “Calculate” to get your results instantly.
🧠 Pro Tip
While bridge loans provide flexibility, always consider having a backup plan in case your home doesn’t sell within the expected timeframe. Explore whether your lender offers repayment extensions or refinancing options.