Bridge Loan Calculator United States 2026
Buying before you sell? See what a bridge loan costs.
Calculate peak debt, total bridge interest, and your remaining mortgage after your existing home sells. Covers capitalised interest, selling costs, and post-sale loan balance. All calculations run in your browser — your data never leaves your device.
Estimates only. Rates vary by lender. Always verify with your bank or broker.
Select the question that matches where you are right now.
Your result shows the total interest cost of carrying two properties simultaneously. The peak debt is the maximum combined loan balance — both the new purchase loan and your existing mortgage together. The end loan is what remains after your existing home's sale proceeds are applied.
Compare scenarios by adjusting the bridge period, rate, or property values. Use the precision bar to unlock selling costs, end loan repayments, and extension risk modelling.
Not a formal pre-approval or a guarantee. Actual bridge costs vary by lender policy, credit assessment, and the rate prevailing at settlement. Use this as a briefing tool for your broker.
Uses simple monthly compounding on peak debt. Actual lender calculations may compound slightly differently. All results run in your browser — no data is sent to any server.
Three variables drive virtually all bridge interest cost: peak debt, rate, and time. Each multiplies the others — a longer period on a larger debt at a higher rate compounds quickly.
Peak debt = new loan + existing mortgage. Every dollar you contribute as deposit directly reduces peak debt and all interest calculated against it. Even $50k extra deposit saves ~$3,300 at 8% over 6 months.
A 12-month bridge costs more than double a 6-month bridge when interest capitalises. Always model a buffer — use the extension risk field in Advanced mode to stress-test a 3-month delay.
Most lenders price bridge at SVR + 0.5–1.5%. On a $1M peak debt, a 1% rate difference costs ~$5,000 per 6 months. Shopping lenders and using a mortgage broker can produce material savings versus going direct to your existing bank.
The most effective ways to reduce bridge cost focus on reducing peak debt, shortening the period, and negotiating the rate — roughly in that order of impact.
More cash in means lower peak debt and less interest compounding. Liquidating other assets, using offset account balances, or delaying discretionary spending before purchase can all help.
Simultaneous settlement or pre-selling your existing home eliminates bridge entirely. In a competitive market this limits your options — but it is the lowest-risk strategy if achievable.
Non-bank lenders and second-tier banks often offer more competitive bridge rates than the Big 4. A mortgage broker can access multiple lenders with one credit application, avoiding multiple hard enquiries.
Once you have a picture of bridge costs, these are the natural next steps to complete your financial planning for the property transition.
Switch to Detailed mode to see your monthly repayments on the end loan after the bridge period. This is the long-term number that matters most to your ongoing cash flow.
If your end loan LTV exceeds 80%, you may need Private Mortgage Insurance on the new loan. Use the LTV Calculator to model this and factor the cost into your decision.
Banks assess bridge on peak debt serviceability — they must confirm you can service both loans simultaneously. Use this calculator as a briefing document for your broker or bank meeting.
How a bridge loan works and how costs are calculated
The bridge loan structure
A bridge loan is a short-term facility that finances the gap between buying a new property and selling your existing home. During the bridge period you carry two loans simultaneously: the new purchase loan and the residual balance on your existing mortgage. The combined balance is called peak debt.
How peak debt is calculated
Peak debt = (new purchase price − deposit) + existing mortgage balance + any lender fees or PMI capitalised. This is the figure on which all bridge interest is calculated.
| Component | Amount | Notes |
|---|---|---|
| New purchase price | $1,200,000 | Full price |
| Less deposit | −$100,000 | Cash contribution |
| New loan | $1,100,000 | Required from lender |
| Existing mortgage | +$350,000 | Still owed |
| Peak debt | $1,450,000 | Max simultaneous exposure |
Capitalised vs paid monthly interest
Most US bridge loans capitalise interest — it is added to the loan balance each month rather than requiring cash payments. This reduces cash flow pressure during the bridge period but increases the total amount owed. The interest compounds on the growing balance.
What drives the cost — peak debt, rate, and time
Bridge interest cost is driven entirely by three variables: the size of peak debt, the interest rate, and the length of the bridge period. All three multiply together, and the cost compounds when interest is capitalised.
| Peak Debt | Rate | 6 months | 12 months |
|---|---|---|---|
| $500,000 | 8% | ~$20,000 | ~$41,500 |
| $1,000,000 | 8% | ~$40,000 | ~$83,000 |
| $1,500,000 | 8% | ~$61,000 | ~$124,500 |
| $1,000,000 | 9% | ~$45,500 | ~$93,800 |
After the sale: the end loan
When your existing home settles, the net sale proceeds (after mortgage payout and selling costs) are applied to the bridge facility. The remaining balance becomes your standard ongoing mortgage on the new property. If the sale price is lower than expected or selling costs are higher, the end loan will be larger than projected.
Bridge loan rates in United States — what to expect in 2026
Current rate ranges
In 2026, US bridge loan rates typically range from 7% to 9.5% per annum. Most major banks price bridge at their standard variable mortgage rate plus a margin of 0.5% to 1.5%. Non-bank lenders and specialist bridge finance providers can price higher or lower.
| Lender type | Rate range (2026) | Typical margin |
|---|---|---|
| Major banks (Big 4) | 7.5% – 8.5% | SVR + 0.5–1.0% |
| Mid-tier banks | 7.0% – 8.0% | SVR + 0.3–0.8% |
| Non-bank lenders | 7.5% – 9.5% | Varies |
| Specialist bridge | 8.5% – 12%+ | Risk-based pricing |
Can I get a fixed rate?
Most lenders only offer variable rate bridge loans given the short-term nature of the product. Locking in a rate for a 6–12 month bridge period is unusual. Some lenders may allow you to convert to a fixed rate after the bridge period ends.
Key risks of bridge finance and how to manage them
Sale delay risk
The primary risk is that your existing home does not sell within the bridge period. Most lenders allow up to 12 months. If the property remains unsold, you may need to extend the facility (at additional cost and a potentially higher rate) or accept a lower sale price to settle. Always model a worst-case timeline — use the extension risk row in Advanced mode to quantify this.
Lower than expected sale price
A 5–10% shortfall on your existing home's value can add $45,000–$90,000 to your end loan on a $900,000 property. Run the Scenario A/B comparison with an optimistic and pessimistic sale price to understand your exposure.
Serviceability on peak debt
Lenders assess your ability to service the peak debt simultaneously — not just the end loan. If your income is borderline, peak debt serviceability is the binding constraint. Federal Reserve's 3% buffer applies, meaning you must demonstrate you can afford repayments at a rate 3% above the bridge rate.
Better alternatives to bridge
Simultaneous settlement — settling your sale and purchase on the same day — eliminates bridge cost entirely. Subject-to-sale contracts give you a purchase conditional on your existing home selling. Both require seller and lender cooperation but remove the bridge risk completely.
Tax treatment of bridge interest and Federal Reserve serviceability rules
Is bridge interest tax deductible?
Tax deductibility depends on the purpose of the loan. If the bridge loan is used to purchase an investment property that will earn rental income, the interest on that portion is generally deductible under section 8-1 of the ITAA 1997. If the loan relates to your principal place of residence (PPOR), the interest is not deductible. Where the bridge spans both a PPOR and an investment, the interest must be apportioned. Always obtain specific advice from a registered tax agent.
Federal Reserve serviceability rules for bridge
Federal Reserve requires authorised deposit-taking institutions to assess bridge loans at the applicant's actual rate plus a 3% buffer. On a 8% bridge rate, the assessment rate is 11%. The lender tests whether you can service the full peak debt at this rate. This is often the binding constraint for borrowers with moderate incomes relative to their property values.
CGT implications
Selling your existing home to fund a bridge purchase may trigger Capital Gains Tax if the property is an investment or mixed-use. The 6-year rule allows a PPOR absence exemption in some circumstances. The timing of settlement relative to the 12-month long-term capital gains rate threshold can also be material. CGT planning should be discussed with your accountant before you commit to the bridge strategy.
❓ Frequently asked Frequently asked questions
What is the maximum bridge loan period in the United States?
Most US lenders allow a bridge period of up to 12 months from settlement of the new property. Some lenders offer 6-month standard terms with an extension option. The shorter the bridge period, the lower the total interest cost — but you need a realistic timeline for your existing home's sale.
Can I make repayments during the bridge period?
Yes. While most bridge loans default to interest capitalisation, many lenders allow voluntary repayments. Making monthly interest payments rather than letting them capitalise reduces your total interest cost and end balance. Check your lender's terms — some have minimum payment requirements.
Do I need to qualify for bridge finance separately?
Yes. Lenders assess your serviceability on the peak debt — they need to confirm you can service both loans simultaneously if needed. Income, existing debts, and equity position all affect approval. Federal Reserve's 3% serviceability buffer applies.
What happens if I can't sell my existing home in time?
You can negotiate an extension with your lender (usually at an increased rate), refinance to a standard ongoing loan structure, or — in the worst case — accept a lower sale price to settle within the term. Lenders are generally willing to negotiate extensions for borrowers in good standing, but this comes at additional cost.
Where these figures come from
Property and mortgage figures on this page are drawn from the the Federal Reserve (rate data), Federal Reserve (serviceability and lending rules), The IRS (CGT and rental rules), and State Revenue Offices (Transfer tax).
- Mortgage & variable-rate data — Federal Reserve — Lenders' Interest Rates (F6).
- Lending serviceability buffer (3%) — Federal Reserve — Prudential Practice Guide APG 223.
- Capital gains tax & main residence — IRS — Capital gains tax.
- rental loss deduction & rental income — IRS — Rental properties.
- Transfer tax (New York example) — your state transfer-tax office — Transfer duty.
- First Home Owner Grant schemes — HUD.gov.
Last checked: April 2026. Rates and thresholds are reviewed against the source of record each November, when annual adjustments for the following tax year are published.