A bridge loan is short-term financing that "bridges" the gap between buying a new home and selling your current one. It can solve a timing problem, but it carries costs and risks worth understanding before you consider one.
How a bridge loan works
Bridge lending gives you short-term funds — often secured by your current home's equity — so you can make a down payment or buy a new home before your existing one sells. When the old home sells, you repay the bridge loan. Terms are short, commonly several months up to about a year.
When buyers consider one
A bridge loan is most useful when:
- You found a new home but have not sold your current one.
- You want to avoid a sale-contingent offer in a competitive market.
- You need the equity from your current home for the new purchase.
The costs and risks
- Higher rates and fees than a standard mortgage, reflecting the short term and risk.
- Carrying two payments if the old home is slow to sell.
- Repayment pressure — the loan assumes your current home sells reasonably quickly.
Because of these risks, weigh a bridge loan carefully against alternatives. Browse finance companies and compare advertised offers to understand the full cost.
Frequently asked questions
How long is a bridge loan?
Terms are short — commonly a few months up to roughly a year — since the loan is meant to be repaid when your current home sells.
Is bridge financing expensive?
It typically costs more than a standard mortgage in rate and fees, reflecting the short term and added risk. Compare the total cost before committing.
What if my old home does not sell?
That is the main risk. You could face two payments and repayment pressure. Have a backup plan and borrow conservatively.
Disclaimer: GoFunding.Shop is an advertising marketplace, not a lender, bank, broker, credit-repair company, or financial advisor. We do not approve applications, set rates, or guarantee funding. Always confirm the full terms — APR, fees, and repayment schedule — directly with the advertising company before you apply.