Bridge Loan Mortgage 2026: How to Buy Before You Sell
Access your home equity for a down payment · 6-12 month terms · Rates from 8% APR
Don't miss your dream home waiting for your current one to sell
Quick Answer
A bridge loan lets you borrow against your current home's equity to fund the down payment on a new home before selling. Rates run 8-12% APR, terms are 6-12 months, and you make interest-only payments until your home sells. You need at least 20% equity in your current home and a 680+ credit score. Compare lenders at MRC to find the best bridge loan for your situation.
How a Bridge Loan Works: Step by Step
Apply for bridge loan + new mortgage simultaneously
Your lender evaluates your current home equity, income, and credit. You are pre-approved for both the bridge loan (on your current home) and the new mortgage (on your next home).
Bridge loan funds your down payment
The bridge loan provides the cash you need for the down payment on the new home. You typically can borrow up to 80% of your current home equity.
Buy the new home, move in
You close on the new home using the bridge loan funds for the down payment. You now own two homes temporarily.
Sell the current home
List and sell your current home. The bridge loan is designed to give you 6-12 months to sell.
Pay off the bridge loan from sale proceeds
When your current home sells, the proceeds pay off the bridge loan balance plus accrued interest. Any remaining equity is yours to keep.
Bridge Loan vs HELOC vs Personal Loan: Which Is Best?
| Feature | Bridge Loan | HELOC | Personal Loan |
|---|---|---|---|
| Funding speed | 2-3 weeks | 4-6 weeks | 1-3 days |
| APR range | 8%–12% | 8%–10% | 7%–36% |
| Max amount | 80% of equity | 85% of equity | $50K |
| Term | 6-12 months | 10-20 years | 2-7 years |
| Home equity required | 20%+ minimum | 15-20%+ | None |
| Risk to home | Foreclosure | Foreclosure | None |
| Best for | Urgent moves, competitive markets | Planned moves, lower rates | Small gap, no equity needed |
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Bridge Loan Costs: What to Expect
Typical Fees
- Origination fee: 1-2% of loan amount
- Appraisal fee: $500-$800
- Title search: $200-$400
- Closing costs: 2-4% of loan amount
Example: $100K Bridge Loan
- Origination (1.5%): $1,500
- Appraisal: $600
- Interest (10% APR, 6 mo): $5,000
- Total cost: ~$7,100
- Paid from sale proceeds when home sells
Bridge Loan Requirements
20%+ Home Equity
You need at least 20% equity in your current home. Lenders typically lend up to 80% of your combined equity (current home value minus mortgage balance).
680+ Credit Score
Most bridge loan lenders require 680+. Some accept 640 with higher rates. Excellent credit (740+) gets the best rates.
DTI Below 43%
Your debt-to-income ratio including both mortgages must stay below 43%. Some lenders allow up to 50% with strong reserves.
Don't Miss Your Dream Home
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Compare Lenders Free →Bridge Loan Risks: What Could Go Wrong?
- ⚠Your home does not sell within the bridge loan term — you may need to extend (with fees) or refinance
- ⚠Home prices drop — you may owe more than your home is worth, making it hard to pay off the bridge loan
- ⚠Double mortgage payments — you are responsible for both mortgages plus bridge loan interest during the overlap
- ⚠Higher rates than traditional mortgages — bridge loans are short-term, so rates are 2-4% higher
- ⚠Foreclosure risk — if you cannot make payments on either home, you risk losing both properties
Related Guides
Frequently Asked Questions
What is a bridge loan mortgage?
A bridge loan is a short-term loan (6-12 months) that uses your current home as collateral, allowing you to access equity for a down payment on a new home before your current home sells. You make interest-only payments during the bridge period, then pay off the loan when your home sells.
→ Compare bridge loan lenders — free, no obligationHow much does a bridge loan cost?
Bridge loan rates typically range from 8% to 12% APR, plus origination fees of 1-2% of the loan amount. For a $100,000 bridge loan, expect to pay $500-1,000 in fees plus $667-1,000/month in interest-only payments during the 6-month bridge period.
→ Compare bridge loan lenders — free, no obligationWhat credit score do I need for a bridge loan?
Most bridge loan lenders require a credit score of 680 or higher, sufficient equity in your current home (at least 20%), and a debt-to-income ratio below 43%. Some lenders accept 640+ but with higher rates and stricter equity requirements.
→ Compare bridge loan lenders — free, no obligationHow long does a bridge loan last?
Bridge loans typically last 6 to 12 months. Some lenders offer extensions up to 18 months. The loan is designed to be repaid when your current home sells. If your home does not sell within the term, you may need to refinance or request an extension.
→ Compare bridge loan lenders — free, no obligationIs a bridge loan better than a HELOC for buying before selling?
Bridge loans are faster to obtain (2-3 weeks vs 4-6 weeks for HELOC) and are designed specifically for this situation. HELOCs have lower rates (8.5% vs 10%) but require more documentation and a longer approval process. For urgent moves, bridge loans are better. For planned moves with 2+ months of runway, a HELOC may save money.
→ Compare bridge loan lenders — free, no obligationCan I get a bridge loan with bad credit?
Bridge loans with bad credit (below 680) are difficult to obtain from traditional lenders. Some private/hard money lenders offer bridge loans with 620+ credit scores but at higher rates (12-15%+). If you have bad credit, consider alternatives like a personal loan or waiting to sell your current home first.
Written by
David Rodriguez
Refinance & Bridge Loan Specialist · 14 years experience
David has helped hundreds of homeowners navigate bridge financing to buy their next home without contingencies.
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