Bridge Loan 2026: How to Buy Before You Sell (Rates, True Costs & 5 Alternatives)
A bridge loan lets you unlock your current home's equity to fund your next down payment — at 9%–11% APR. Total cost: $13,000–$27,000. But there are 5 cheaper alternatives. Here's when each makes sense.
How a Bridge Loan Works: Step by Step
Apply for bridge loan against current home
Lender orders appraisal of current home. Loan amount = up to 80% of current home value minus existing mortgage balance. Your equity becomes your bridge.
Close on new home without sale contingency
With bridge funds in hand, you make a clean non-contingent offer. Sellers love this — it's like a cash offer. You close on your new home.
Pay interest-only on bridge loan while living in new home
Bridge loans are typically interest-only. On $200K at 10%, that's ~$1,667/month. PLUS your new mortgage payment. Budget carefully.
Sell old home within 6–12 months
Close on the sale of your old home. Lender is paid off first from proceeds. Remaining equity goes to you.
Bridge loan closed, free and clear
Bridge loan paid off. New home only has the permanent mortgage. Total cost: interest + fees paid during the bridge period.
True Bridge Loan Cost Calculator (2026 Rates)
| Bridge Amount | Rate | 6-Mo Interest | 12-Mo Interest | Origination Fee | Total 6-Mo | Total 12-Mo |
|---|---|---|---|---|---|---|
| $100,000 | 10% | $5,000 | $10,000 | $1,000–$2,000 | $7,350–$9,000 | $12,350–$14,000 |
| $150,000 | 10% | $7,500 | $15,000 | $1,500–$3,000 | $10,350–$12,000 | $18,350–$20,500 |
| $200,000 | 10% | $10,000 | $20,000 | $2,000–$4,000 | $13,350–$16,000 | $23,350–$26,500 |
| $300,000 | 10% | $15,000 | $30,000 | $3,000–$6,000 | $19,350–$23,000 | $34,350–$38,500 |
5 Alternatives to a Bridge Loan in 2026 (Ranked by Cost)
| Option | Rate | True Cost | Best For | Downside |
|---|---|---|---|---|
| HELOC on Current Home | 8.5–9.5% | Low ($500-$1,500) | Most equity, plan ahead | Must open BEFORE listing home for sale |
| Sale Contingency Offer | N/A | Free | Buyer's market, patient seller | Sellers reject in competitive markets |
| Cash-Out Refinance | 6.5–7.5% | $4,000-$8,000 closing | Rate improvement opportunity | 30-45 day process, need to qualify |
| Delayed Closing | N/A | Free | Motivated seller | Seller must agree to 60-90 day close |
| Equity Sharing (Hometap) | N/A — equity stake | 3-5% of home value | Low income, high equity | Share future appreciation |
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What is a bridge loan and how does it work in 2026?
What are bridge loan rates in 2026?
What are the alternatives to a bridge loan in 2026?
What are the requirements to qualify for a bridge loan?
How much does a bridge loan cost in 2026?
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Meet David
Refinance & Rate Specialist
David Rodriguez is a seasoned refinancing expert with over 10 years of experience in mortgage rate analysis and market trend forecasting. As a Certified Rate Lock Specialist, he has saved homeowners millions in interest payments through strategic refinancing timing. His expertise in Federal Reserve policy impact and mortgage-backed securities makes him a go-to expert for rate predictions and refinancing strategies.
EXPERTISE:
KEY ACHIEVEMENT:
Saved clients $50M+ in interest payments