How Expensive Are Bridging Loans? Rates, Fees, and Real Cost Examples

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Published: November 4, 2026

You’ve found the next house, the seller wants to close in 30 days, and your current home isn’t sold yet. A bridge loan covers that in-between stretch: you borrow against the home you own now, put the money toward the new one, and pay it all back when the old place sells.

So, how expensive are bridging loans? Noticeably more than a regular mortgage, mostly because you pay mortgage-style closing costs on a loan that lasts months, not decades. The good news is that the biggest cost driver is something you can plan for: how long your old home takes to sell, since every extra month adds interest.

Below, you’ll find today’s US bridge loan rates and fees, what UK-style “bridging loan” quotes mean in US terms, and worked examples for $200,000 and $300,000 loans.

How Expensive Are Bridging Loans in 2026?

In the US, a bridge loan typically costs the prime rate to prime plus 2 percentage points a year, which works out to about 7% to 9% as of November 2026, plus closing costs of 1% to 3% of the loan. Here’s the full picture at a glance.

The prime rate comes from the Federal Reserve’s H.15 release, published November 3, 2026. The other ranges come from Bankrate’s bridge loan guide (January 2026) and LendingTree (updated April 2025). CNBC Select, in a September 2026 update, put bridge loan rates at 7% to 10% with closing costs of about 1.5% to 3%.

Because the fees are fixed and the interest runs by the month, the single biggest driver of your total cost is how long you keep the loan.

What Is a Bridge Loan, and Why Is It Also Called a Bridging Loan?

A bridge loan is a short-term loan secured by your current home that helps you buy the next one before the first one sells. Americans usually say “bridge loan,” while the UK term is “bridging loan.” You’ll also see it called a swing loan, interim financing, or gap financing.

The money typically covers the down payment on your new home, or pays off your existing mortgage so you can qualify for the new one. You repay the bridge loan in full when your old home sells.

Payment set-ups vary by lender. Some require interest-only payments during the term and the full balance at the end. Others let you defer payments until the sale closes, with the interest added to what you owe at payoff. Either way, expect a lump-sum repayment at the end rather than years of regular payments.

What Interest Rate Will You Pay on a Bridge Loan?

Most US borrowers pay somewhere between the prime rate and prime plus 2 points, about 7% to 9% as of November 2026. Your exact rate depends on your equity, credit, and the lender.

How US lenders price bridge loans (prime plus a margin)

The prime rate is the benchmark rate banks charge their most creditworthy customers, and many bridge lenders price their loans as prime plus a margin. The Federal Reserve’s H.15 release listed the bank prime loan rate at 7.00% on November 2, 2026. Add a margin of 0 to 2 points, and you land at 7% to 9%.

Not every source describes it that way. LendingTree quotes a wider band of 6% to 12%, and CNBC Select says 7% to 10% as of September 2026. Higher numbers usually reflect lower equity, weaker credit, or a private lender.

Monthly rates: how UK bridging loan lenders quote

UK lenders quote bridging rates per month, which is why UK pages look so different. Spark Finance’s rate index (June 2026) shows 0.45% to 0.75% a month for strong first-charge loans, and Capitalise (October 2026) puts most mainstream deals at 0.95% to 1.25% a month.

To compare, multiply by 12. A rate of 0.75% a month is 9% a year in simple interest, and 1.25% a month is 15% a year. Keep in mind these UK figures are in pounds and apply to UK property, so they’re useful only for comparison.

What pushes your rate up or down

• Loan-to-value: Experian notes lenders often cap the combined loan-to-value at 80%, and lower borrowing usually means a better rate.
• Equity: Most lenders want at least 15% to 20% equity in your current home.
• Credit score: Experian says you may need a score of 700 or higher. If you’re short of that, it may be worth taking time to improve your credit score before applying.
• Debt-to-income ratio (DTI): Some lenders allow a DTI as high as 50%, and the payments on both homes may count toward it.

What Fees Come With a Bridge Loan?

Expect to pay 1% to 3% of the loan in closing costs on top of the interest, according to LendingTree. Here’s what usually goes into that figure.

Origination fee or points

This is the lender’s fee for arranging the loan, usually quoted as a percentage of the amount you borrow. Some lenders charge points instead, where each point is 1% of the loan. Ask for it as a dollar figure so you can compare offers.

Appraisal, title, escrow, and recording fees

Because the loan is secured by your home, you pay many of the same third-party costs as on a mortgage. Bankrate warns that these closing costs “can cost you thousands.” LendingTree adds an important point: bridge loans generally aren’t covered by the Real Estate Settlement Procedures Act (RESPA), the federal law behind many standard mortgage disclosures. That makes it worth getting a written fee breakdown from each lender.

Exit, prepayment and extension fees

In the UK, exit fees are common: Capitalise lists 0% to 1.5% of the loan. US lenders vary widely, and there’s no standard schedule. Some charge an extension fee or a higher rate if you need more time, and borrowers on r/RealEstate have reported running into prepayment penalties. Ask every lender to put these terms in writing before you sign.

How Much Does a $200,000 Bridge Loan Cost? Worked Examples

A $200,000 bridge loan kept for six months costs roughly $9,000 to $15,000 in interest and fees. The examples below are hypothetical, use simple interest and round numbers, and assume interest is paid for the full period.

Example 1: $200,000 for 6 months

The interest is $200,000 × rate × 6 ÷ 12. At the low end, you’d pay about $1,167 a month in interest, and at the high end, $1,500.

Example 2: $300,000 when the sale takes 9 months

Say your home takes longer to sell than planned. At 10% with 2% in fees:

Those three extra months add $7,500, all of it interest. This is why a slow sale, more than the headline rate, decides whether a bridge loan feels affordable.

Example 3: A lower rate is not always cheaper

Compare two hypothetical $200,000 loans. Loan A charges 7% with a 2% fee. Loan B charges 9% with a 1% fee.

On a short loan, fees dominate the total, so the lower fee wins. On a longer one, the rate takes over. Estimate your likely sale time before you pick between offers.

Why Are Bridging Loans More Expensive Than a Mortgage?

Bridge loans cost more because they’re short-term, carry more risk for the lender, and spread fixed setup costs over a few months instead of decades. Bridge rates also tend to run higher than mortgage rates; Freddie Mac’s survey put the average 30-year fixed mortgage at 7.24% as of October 29, 2026.

The fee effect is easy to underestimate. Say you pay $4,000 in fees on a $200,000 loan:

• On a 30-year mortgage, that $4,000 is spread over decades, so it barely moves your effective yearly cost.
• On a 6-month bridge loan, that $4,000 is 2% of the loan paid for half a year of borrowing. Annualized, it adds roughly 4 percentage points on top of the interest rate.

The lender’s risk adds to the price, too. Repayment usually depends on one event: the sale of your home, and the loan comes on top of your existing and new mortgages. Lenders charge for that uncertainty.

What Can Make a Bridge Loan Cost More Than You Planned?

The biggest risk is your current home taking longer to sell than expected. Every extra month adds interest, and the deadline doesn’t move just because the market slows down.

• A slow sale: as Example 2 shows, three extra months can add thousands in interest.
• Extension costs: if the loan term ends before the sale closes, you may face an extension fee, a higher rate, or a demand for full repayment.
• Two housing payments: you may carry your old mortgage, your new mortgage and the bridge loan at the same time, plus taxes, insurance and utilities on both homes.
• A lower sale price: if you have to cut the price, there’s less money left to repay the bridge loan.
• Foreclosure risk: Bankrate warns that if your home doesn’t sell and you can’t repay, you could face foreclosure, because the loan is secured by your house.

Borrowers’ stories cut both ways. On r/RealEstate, one homeowner said a bridge loan worked perfectly because they needed it for only three or four months. On r/Mortgages, the common advice is that bridge loans are expensive enough that you need a clear exit plan before you borrow.

Is There a Cheaper Alternative to a Bridging Loan?

Often, yes, especially if you plan ahead. Home equity products usually cost less in fees, and some options avoid borrowing altogether.

The Consumer Financial Protection Bureau’s guide to HELOCs and home equity loans explains how each works, including that both count as second mortgages if you already have a mortgage. Some borrowers on r/RealEstate also suggest a mortgage recast: you carry both payments briefly, then put the sale proceeds toward the new loan to lower its monthly payment. That only works if you can afford both payments for a while.

How to Work Out the Total Cost of a Bridge Loan Before You Sign

Add up the interest for the months you’ll realistically need, plus every fee, then compare that total with at least one alternative. Six steps keep the numbers realistic:

1. Get the rate and every fee in writing, including any extension or prepayment terms.
2. Estimate your sale time, then add three months as a buffer.
3. Calculate interest with the formula below. It’s simple interest, the same method behind how car loan interest works on most US auto loans.
4. Add all fees to the interest.
5. Divide the total by the loan amount to get an all-in percentage.
6. Compare it with one alternative, such as a HELOC, using the same months.

Interest = Loan amount × Annual rate × Months ÷ 12

For $200,000 at 8% for 9 months: $200,000 × 0.08 × 9 ÷ 12 = $12,000 in interest, before fees.

So, How Expensive Are Bridging Loans, and Are They Worth It?

Bridging loans are expensive compared with a mortgage, but they can be worth it when speed is important, and your current home is very likely to sell within a few months. They get risky in a slow market, when every extra month adds interest and the repayment deadline stays fixed. Before you commit, get written quotes, run the numbers for a longer sale than you expect, and talk to a lender and a qualified adviser about your situation. For related reading, browse more loan guides on DA Finance Blog.