What Is a Bridge Loan?
A bridge loan is short-term financing that helps a homeowner buy a new home before selling their current one, typically using the equity in the current home. It “bridges” the gap in timing and is usually repaid when the first home sells, often within a year or less.
Costs and Risks
Bridge loans often carry higher interest rates and fees than long-term mortgages, and borrowers may temporarily carry payments on two properties.
Alternatives
A home equity line of credit or a sale contingency are common alternatives.
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🔗 Related Terms
More Home Buying Terms
- Adjustable-Rate Mortgage (ARM)
- Appraisal Gap
- Assessed Value
- Cash-Out Refinance
- Closing Costs
- Closing Disclosure
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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.