Editorial note:This content is for informational purposes only and does not constitute financial, lending, or legal advice. Lender rates, fees, and eligibility change frequently — confirm details on the lender's own site before applying. Information is believed accurate as of publication but may not reflect the latest lender disclosures.
Bridge Loans for Home Buyers: Buy Before You Sell in 2026
How home bridge financing works, what it costs, and when it makes sense to borrow against your equity before closing your sale
You found your dream home, but your current house hasn't sold yet. A bridge loan lets you tap your existing home equity to fund a down payment on the new property before you close the sale on the old one. This guide explains how bridge loans work, what they cost, which lenders offer them, and when they make financial sense.
Key Takeaways
- Bridge loans are short-term (6–12 months) secured by your current home's equity, designed to cover a down payment or all-cash purchase until your old home sells.
- Expect rates 2–4 percentage points above standard mortgage rates, plus origination fees of 1.5–3% and possible monthly minimums.
- You'll typically need 20% equity in your current home, a debt-to-income ratio under 45%, and a credit score of at least 680.
- Major bridge-loan providers include Figure, Rocket Mortgage, LoanDepot, Citibank, and regional banks; many national lenders exited the product after 2020.
- If your home doesn't sell on time, you risk carrying two mortgages or forced sale at a discount.
What Is a Bridge Loan?
A bridge loan is a short-term loan—usually six to twelve months—secured by the equity in your current home. It "bridges" the gap between buying your next house and selling your existing one.
Two common structures:
- First-lien bridge loan – Pays off your existing mortgage and gives you cash for the new down payment. You have one loan on the old house.
- Second-lien bridge loan – Sits behind your current mortgage as a second lien, advancing only the equity you need for the down payment.
Most lenders cap the combined loan-to-value (CLTV) at 80%, meaning you need at least 20% equity after accounting for all liens.
How It Works: A Real Example
You own a home worth $400,000 with a $240,000 mortgage balance, giving you $160,000 in equity. You want to buy a new home for $500,000 and need a $100,000 down payment (20%).
- You take a second-lien bridge loan of $100,000 at 9.5% APR for 12 months.
- CLTV = ($240,000 + $100,000) ÷ $400,000 = 85%. This exceeds most lenders' 80% cap, so you might only qualify for $80,000 or need to bring cash.
- Assuming you get the full $100,000, your monthly interest-only payment is roughly $792 ($100,000 × 9.5% ÷ 12).
- You close on the new house, then list and sell the old one within six months.
- At closing, proceeds pay off the $240,000 first mortgage and the $100,000 bridge loan; you net the remainder.
If your home sells for asking price, you walk away with about $60,000 (minus closing costs and real-estate commissions). If it takes ten months, you've paid $7,920 in interest plus origination fees.
Who Offers Bridge Loans in 2026?
Bridge lending contracted sharply after the 2020–2021 refinance boom. Many big banks and mortgage companies pulled back because of risk, regulatory capital requirements, and low volume.
Active lenders as of early 2026:
| Lender | Min Credit | Max CLTV | Typical Rate Range | Notes |
|---|---|---|---|---|
| Figure | 680 | 80% | Prime + 3–5% | Home-equity line structured as bridge |
| Rocket Mortgage | 700 | 75% | 8.5–11% | Available in select states |
| LoanDepot | 680 | 80% | 9–12% | First- and second-lien options |
| Citibank | 720 | 75% | Variable; call | Relationship clients only |
| Regional banks | 660–700 | 80–85% | 8–13% | Portfolio loans; terms vary widely |
Figure markets its bridge product as a home-equity line of credit (HELOC) with a 12-month draw period and interest-only payments, making it functionally a bridge loan. Rocket and LoanDepot offer traditional closed-end bridge loans with balloon payment due at maturity.
Always compare at least three quotes. Origination fees range from 1.5% to 3%, and some lenders charge monthly service fees or require an appraisal ($400–$600).
When a Bridge Loan Makes Sense
Bridge loans solve a timing problem, but they're expensive. Use one only if:
- You're in a hot seller's market where homes sell in 30–60 days, minimizing your carry period.
- You have strong equity (30%+) and can comfortably handle two mortgage payments for several months if the sale drags.
- Your offer needs to be non-contingent to win a bidding war. Sellers heavily favor all-cash or waive-sale-contingency offers.
- You can't or won't rent temporarily between homes due to job relocation, school deadlines, or family logistics.
Alternatives to Consider
- Home-equity line of credit (HELOC) – Lower rates (currently 8–10% for prime borrowers), longer draw period, and you can pay it down gradually. Figure, LendingTree's partners, and most credit unions offer HELOCs. Approval takes 2–4 weeks.
- Sale contingency with rent-back – Make your offer contingent on selling your home, then negotiate a post-closing occupancy agreement to stay in the old house 30–60 days after closing.
- 80–10–10 piggyback loan – Put 10% down on the new home, take a first mortgage for 80%, and a second mortgage for 10%. You still carry both loans until the old house sells, but rates may be lower than a bridge.
- Cash-out refinance on current home – Pull equity out, buy the new home, then sell the old one. You'll pay closing costs twice but avoid bridge-loan rates.
Qualifying for a Bridge Loan
Lenders evaluate both properties and both sets of payments.
Typical requirements:
- Credit score: 680+ (some portfolio lenders go as low as 660).
- Debt-to-income ratio (DTI): Under 45%, counting both the existing mortgage and the new mortgage. Some lenders exclude the old mortgage payment if you have a signed purchase-and-sale agreement and a closing date within 90 days.
- Equity: At least 20% in your current home after the bridge advance.
- Reserves: 6–12 months of combined PITI (principal, interest, taxes, insurance) for both homes.
- Appraisal: Required on the current home; sometimes on the new home as well.
Hard credit inquiry: Final approval triggers a hard pull. Prequalification may use soft credit, but not all bridge lenders offer soft-pull preapprovals—ask before applying.
Costs and Fees Breakdown
Bridge loans are among the most expensive forms of short-term financing. Budget for:
- Interest rate: 8–13% APR in 2026, depending on credit tier and lender.
- Origination fee: 1.5–3% of the loan amount. On a $100,000 bridge loan, that's $1,500–$3,000 upfront.
- Appraisal: $400–$600.
- Title and closing costs: $500–$1,500 for a second lien; $2,000–$4,000 for a first-lien payoff-and-refinance structure.
- Monthly payment: Usually interest-only; principal due at maturity as a balloon.
Total cost on a $100,000 bridge loan at 10% APR for 6 months:
- Origination (2%): $2,000
- Interest ($100,000 × 10% ÷ 12 × 6): $5,000
- Appraisal and closing: $1,000
- Grand total: $8,000
Compare that to a HELOC at 8.5% APR for the same period: roughly $4,250 in interest plus $500 in fees—a savings of over $3,000.
Common Mistakes to Avoid
1. Overestimating How Fast Your Home Will Sell
Even in strong markets, surprises happen: inspection issues, buyer financing falls through, or inventory suddenly spikes. Budget for the maximum term, not the optimistic case.
2. Ignoring the Balloon Payment
Bridge loans are not amortizing. If your home hasn't sold by month twelve, the entire balance is due. Some lenders offer a single six-month extension for a fee (typically 1% of the balance), but it's not guaranteed.
3. Skipping the HELOC Comparison
If you have 30 days or more before you need funds, a HELOC almost always costs less and offers more flexibility. Only choose a bridge loan if speed is critical or your DTI is too high for a HELOC and the lender will exclude the old mortgage payment because of a signed purchase contract.
4. Underfunding Reserves
Lenders require reserves, but life requires more. Keep at least 12 months of combined housing payments liquid. Carrying two mortgages, two insurance policies, and two tax bills drains cash fast.
5. Using a Bridge Loan in a Buyer's Market
If days-on-market in your area average 90+, a bridge loan is extremely risky. You'll burn thousands in interest while waiting for a buyer, and you may be forced to drop your price to avoid default.
Tax and Accounting Considerations
- Mortgage-interest deduction: Bridge-loan interest may be deductible if the proceeds are used to buy, build, or substantially improve your primary or secondary residence, subject to the $750,000 combined mortgage debt cap (married filing jointly).
- Origination fees: Generally added to the cost basis of the new home, not deducted in the year paid.
- Consult a CPA: Tax treatment varies if you're converting the old home to a rental or if you've owned multiple properties in the past two years.
Conclusion and Next Steps
Bridge loans offer a fast, flexible way to buy before you sell, but they come with high rates, strict equity requirements, and the risk of carrying two properties longer than planned. If your market is strong, your equity deep, and your reserves solid, a bridge loan can win you a non-contingent offer. For most borrowers, a HELOC or sale contingency will be cheaper and safer.
Next steps: Use our home equity calculator to see how much you can borrow, or read our guide to HELOCs vs. home-equity loans to compare all your options. If you're ready to explore lenders, get soft-pull prequalifications from Figure, Rocket Mortgage, and at least one local bank to compare rates and fees side by side.
Related guides
People also ask
How long does it take to get approved for a bridge loan?
Approval typically takes 7–21 days, depending on the lender's underwriting queue and how quickly you provide appraisals, title work, and documentation. Some portfolio lenders can close in as little as five business days if you have strong credit and clear title.
Can I get a bridge loan with bad credit?
Most bridge lenders require a minimum credit score of 680. A few regional banks and portfolio lenders will go as low as 660, but expect higher rates (12–15% APR) and lower loan-to-value caps. Below 660, bridge financing is extremely difficult to obtain.
What happens if my house doesn't sell before the bridge loan matures?
The full balance becomes due as a balloon payment. Some lenders offer a one-time six-month extension for a fee (typically 1% of the loan), but it's not automatic. If you can't pay or extend, the lender can foreclose on your current home.
Is a bridge loan the same as a HELOC?
No. A bridge loan is a short-term, closed-end loan with a balloon payment, usually at higher rates. A HELOC is a revolving line of credit with a longer draw period and lower rates. Some lenders, like Figure, market HELOCs as bridge products by offering interest-only payments and 12-month terms.
Do I need an appraisal for a bridge loan?
Yes. Lenders require a full appraisal of your current home to determine equity and loan-to-value. Some also appraise the new home, especially if it's a first-lien bridge structure. Budget $400–$600 per appraisal.
Are bridge loan origination fees refundable if I pay off early?
No. Origination fees are due at closing and are not refunded if you sell your home and pay off the loan ahead of schedule. Most bridge loans do not charge prepayment penalties, so you save only on future interest by paying early.
Related Articles
Student Loan Refinancing: Federal vs Private Trade-offs
Refinancing federal student loans can cut your rate, but you permanently forfeit income-driven repayment, forgiveness, and forbearance. Here's how to decide.
Auto Loans: New vs Used vs Lease Buyout – Which Financing Option Wins?
Compare new-car, used-car, and lease-buyout auto loans side by side—covering APRs, terms, and real costs to help you choose the best financing route.
Veterinary Bill Loans: Better Than CareCredit?
Compare vet bill financing options including CareCredit, personal loans from SoFi and LightStream, and pet-specific lenders—rates, fees, and real examples.
Weekly newsletter
One borrowing tip and current rate watch, every Monday.