Bridge Financing Calculator
Interest Cost$2,795
Admin Fee$750
Total Bridge Cost$3,545
Effective Rate (Annualized)10.8%
Bridge Financing Cost Examples
Example 1: 30-Day Bridge
| Details |
Amount |
| Bridge amount |
$150,000 |
| Interest rate |
8.5% |
| # Days |
30 |
| Interest cost |
$1,048 |
| Admin fee |
$750 |
| Total cost |
$1,798 |
Example 2: 60-Day Bridge
| Details |
Amount |
| Bridge amount |
$200,000 |
| Interest rate |
8.5% |
| # Days |
60 |
| Interest cost |
$2,795 |
| Admin fee |
$750 |
| Total cost |
$3,545 |
Example 3: 90-Day Bridge
| Details |
Amount |
| Bridge amount |
$300,000 |
| Interest rate |
9.0% |
| # Days |
90 |
| Interest cost |
$6,658 |
| Admin fee |
$1,000 |
| Total cost |
$7,658 |
How Bridge Financing Works
Timeline Example
| Day |
Event |
Financial Impact |
| Day 1 |
Close on new home |
Need $200,000 down payment |
| Day 1 |
Bridge loan activated |
Bank provides $200,000 |
| Day 1-60 |
Own both homes |
Interest accrues |
| Day 60 |
Close on old home |
Receive sale proceeds |
| Day 60 |
Bridge repaid |
Interest + fees deducted |
What Does Bridge Financing Cover?
| Use |
Details |
| Down payment |
When equity is tied up in old home |
| Closing costs |
Legal, land transfer tax |
| Overlap costs |
Carrying two properties temporarily |
Bridge Financing Requirements
Standard Requirements
| Requirement |
Details |
| Firm sale agreement |
On your current home |
| Purchaser financing |
Buyer must be approved |
| Equity |
Enough in current home |
| Mortgage approved |
For new home |
| Same lender |
Usually required |
Without Firm Sale (Harder)
| Requirement |
Details |
| Higher rate |
2-3% more |
| More equity |
30%+ in current home |
| Both properties secured |
Cross-collateralization |
| Shorter term |
30-60 days typically |
Bridge Financing Rates
| Lender Type |
Typical Rate |
Admin Fee |
| Big 5 banks |
Prime + 2-3% |
$500-750 |
| Credit unions |
Prime + 2-3% |
$500-750 |
| Mortgage companies |
Prime + 3-4% |
$750-1,000 |
| Private lenders |
10-15%+ |
$1,000-2,000 |
Current prime rate: approximately 5.45% (2025)
Cost Comparison: Bridge vs Alternatives
Option 1: Bridge Financing
| Factor |
Details |
| Cost |
$2,000-5,000 (typical) |
| Pros |
Buy without selling first |
| Cons |
Interest + fees |
Option 2: Home Sale Condition
| Factor |
Details |
| Cost |
$0 |
| Pros |
No bridge needed |
| Cons |
Sellers may reject, weak offer |
Option 3: HELOC on Current Home
| Factor |
Details |
| Cost |
Prime + 0.5% (lower rate) |
| Pros |
Cheaper than bridge |
| Cons |
Must set up before selling |
Option 4: Personal Line of Credit
| Factor |
Details |
| Cost |
Prime + 2-4% |
| Pros |
Flexible, available |
| Cons |
Limited amount, unsecured |
When to Use Bridge Financing
Good Scenarios
| Situation |
Why Bridge Makes Sense |
| Found dream home |
Can’t wait to sell first |
| Hot market |
Offers need to be clean |
| Short overlap |
30-60 days, cost is minimal |
| Enough equity |
Bridge amount is manageable |
Avoid Bridge If
| Situation |
Better Alternative |
| No firm sale |
Wait for sale |
| Long overlap (90+ days) |
Costs add up |
| Tight finances |
Risk of carrying two mortgages |
| Low equity |
May not qualify |
Calculating How Much Bridge You Need
Bridge Amount = Down Payment on New Home + Closing Costs - Cash Available
Example Calculation
| Item |
Amount |
| New home purchase price |
$800,000 |
| Down payment (20%) |
$160,000 |
| Land transfer tax |
$25,000 |
| Legal fees |
$2,000 |
| Total needed |
$187,000 |
| Cash available |
$30,000 |
| Bridge amount |
$157,000 |
Bridge Financing Fees Breakdown
| Fee |
Typical Cost |
When Charged |
| Interest |
Variable (daily) |
Throughout bridge |
| Administration |
$500-1,000 |
At setup |
| Appraisal (if needed) |
$300-500 |
At setup |
| Legal |
$200-500 |
At setup |
| Discharge |
$100-200 |
At completion |
Tips for Lower Bridge Costs
1. Minimize Bridge Period
| Action |
Impact |
| Align close dates |
Reduce days |
| Negotiate close date |
With buyer/seller |
| Same-day close |
Eliminates bridge need |
2. Negotiate Rates
| Approach |
Details |
| Ask for match |
If you have quotes |
| Loyalty discount |
Existing mortgage customer |
| Bundle services |
Mortgage + bridge |
3. Use HELOC First
If you have a HELOC on your current home:
- Lower interest rate
- No setup fee (already exists)
- Pay off when house sells
4. Reduce Bridge Amount
| Action |
Impact |
| Larger cash down |
Less to bridge |
| Seller take-back |
Reduce down payment need |
| Lower-priced home |
Smaller down payment |
Risks of Bridge Financing
| Risk |
Mitigation |
| Sale falls through |
Only use with firm sale |
| Delays in closing |
Build buffer into dates |
| Double mortgage payments |
Budget for this scenario |
| Interest rate increase |
Lock in if possible |
Bridge Financing Checklist
Before Applying
| Task |
Status |
| Firm sale on current home |
☐ |
| Approved for new mortgage |
☐ |
| Calculate bridge amount needed |
☐ |
| Compare rates from 2-3 lenders |
☐ |
| Understand all fees |
☐ |
At Application
| Task |
Status |
| Provide sale agreement |
☐ |
| Provide purchase agreement |
☐ |
| Sign bridge documents |
☐ |
| Confirm disbursement date |
☐ |
At Closing
| Task |
Status |
| Bridge funds disbursed |
☐ |
| Close on new home |
☐ |
| Close on old home (repays bridge) |
☐ |
| Confirm bridge discharged |
☐ |