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33 Comments on “Bridge Loan Calculator”

financial online calculator Join the conversation. Tell me what you think.
  • Why is your amount for bridge loans cut off at $30,000? My understanding is that I can get a bridge loan to buy condo, secured by my paid-off home of which I am told $175,000 will sell quickly. I am up in years and need to get moved while I can; but can’s sell without place to go—no place to go until I have money to buy it. How on earth do you think $30,000 or $50,000 would be a bridge? Also, rates go up from 3.5, current, up to 8—and why set for 24 months—not just the 6 months I read—or even 2 months if one wants it that way? Everything seems to be such a rip-off these days. I have no place to even lay my head if I were to put everything in storage while trying to find a place after selling. Condos are not coming available quickly and new ones are being built for younger 40ish folk with ceilings too high and too much sq. ft. for older to care for in latter years; thus reason for down-sizing; but clearly builders do not understand this. Thanks for listening, I have been trying to get moved for several years; but government is not loaning to elderly even with 833 credit score and no debt—trying to put healthy elderly into hi-rise infernos which cost $3,000 to $5.000 a month—not many elderly people can do that and thus are being forced into our graves. No one bears another’s burdens these days.

    • Hello, none of the limitations you mention are accurate. Please click on the "Help" button for the instructions on how to use this calculator. If, after reading them, if you have a question, please ask. The calculated "bridge loan amount" is the amount you need to close the deal on the 2nd home, given your current cash available and the purchase price. You are always free to borrow more. In that case, use the loan calculator on this site to create the schedule for what you want to borrow. Hope this gets you started.

  • Hi Karl,
    Nice calculator. We may be building a bridge loan website. Is this calculator available for use on a site?
    What would you charge for that?
    Rich

  • The house we want to purchase is $215000,the house we currently have is valued at $365000 we owe $225000. How does each of these numbers fit in the calculator?

    • A bridge loan calculator doesn’t consider the value of your current home. The purpose of the calculator is to tell you when purchasing the new home if a bridge loan is needed. You have approximately $145,000 equity in your current home (365,000 – 225,000). If you need a bridge loan, the equity can potentially be a collateral source to secure the needed bridge loan. A credit card could potentially be the source of funds too. Funds do not need to be secured by your current property.

  • my wife and I are selling our home for $370,000 and purchasing a home for $447,000. We are going to make about $154,000 on the sale of our first house. We plan on using $120,000 as a down payment for the new purchase. We had everything lined up to close on both the purchase and the sale on the same day, however, our buyer is having finance issue which is causing us to delay the purchase. To get our new home, would a bridge loan be a good idea to get the $120,000 for the down payment of the new home? My current mortgage payment is $1400 FYI.

  • I don’t understand how a bridge loan works fully. I’ll post my understanding/questions below and maybe you can clear it up as I can’t find any answers as of yet.

    We have a current mortgage that’s only 2 years old so we don’t really have an equity in it other than the upgrades we’ve made to it. While it hasn’t been appraised yet, I’m estimating maybe 15,000-20,000 value in upgrades. So if the house appraises higher now than what we purchased it for, the difference is considered equity correct?

    Second and biggest question: Say we take out a bridge loan to cover remaining (98%) of previous mortgage plus a down payment for new house, what happens when the first house is sold? Do we then take out a mortgage on the new house? I don’t really understand how a bridge loan is supposed to help you get into a house faster when all it’s really providing is a down payment. Do you actually have 3 loans to pay all at once (supposing the bridge loan requires payments as opposed to allowing nonpayment for a few months); 1 loan for old house, 1 loan for bridge, and 1 for full amount of new house. The first two being paid off by previous home being sold?

    Signed: totally confused on transition from bridge to new mortgage.

    • Regarding "if the house appraises higher now than what we purchased it for, the difference is considered equity correct"? Almost, but not exactly. Equity is actually the difference between the appraised value and the principal balance (or remaining balance) of the mortgage (not what you purchased it for).

      Let’s say your equity is $25,000.

      Say you want to buy a new home from $300,000 and you need to put 20% down ($60,0000). If, besides the equity in your home, you have an additional $50,000 in cash and investments you are $10,000 short of the required 20% down. You would, therefore, not be able to buy the new house.

      This is where the bridge loan comes in. Borrow $10,000 from the equity in the existing home and use that to make the $60,000 ($50,0000 cash + $10,000 bridge loan) cash down payment when you go to closing on the new home.

      Then, when you sell the first home, the proceeds from the sale will be used to pay off the bridge loan. You’ll get to keep $15,000 cash from the sale because you’ve used $10,000 of the $25,000 equity for the down payment on house #2.

      So, you are NOT taking out a bridge loan "to cover remaining (98%) of previous mortgage". That mortgage is paid off when the first house is sold.

      The big question is, can you afford to make payments on all 3 loans at the same time?

  • We own our house outright. Current value $300,000. It is up for sale. We have a contingency contract on a new home for $396,000. We want to get a bridge loan to buy the new home so we don’t lose it. Is that a good idea?

    • Are you looking for cash for a down payment on the new home? You should be able to use the equity you have in your current home to raise the funds for the down payment. That’s what a bridge loan is.

  • Hello,
    We want to buy a new home. One of them is $450K. We bought our current home for $315K 10 years ago and have $264,867.97 left on our mortgage at 3.625%. Homes have increased in price in our NYC area. They rarely go down in price. I have one appraiser that hasn’t seen the inside of our home, and states if we didn’t change anything (which we have a new kitchen, roof, hot water heater, driveway, etc) then our home would be worth $330K. Similar homes in the area are going for about $400K. We really don’t have much to put down for a new home. Should we sell our current home first? Or can we somehow take the equity out of our home to buy a new house? I would love to move by the fall for the kids.

    Thank you!!

    • Hi, if I understand you, this is how you would use the calculator to answer your question:

      Purchase Price?:            $450,000.00
      Cash Available?:             $10,000.00
      First Mortgage?:            $355,000.00
      First Interest Rate?:           3.6250%
      First Term? (Months) (#):           360
      Bridge Loan Interest Rate?:     3.6250%
      Anticipated Bridge Loan Term? (#):   24
      

      You didn’t mention how much cash you had, you only said "we really don’t have much to put down", so I estimated you have $10,000 free cash.

      I also estimated that the first mortgage (the mortgage on the new home) would be 80% of the purchase price. That is, you would want to put 20% down – eventually, That’s where the $355,000 comes from for the new mortgage.

      Feel free of course to adjust these numbers as needed.

  • Joseph Tate says:

    We own our house $650k, we want to buy a new house and move to leave our house empty for the sale. We don’t want to cash in stock for the purchase of the new home.

  • Hi Karl-
    We are struggling with using the correct dollar amounts to determine our total monthly liability using a bridge loan. Please run the numbers with the following data (approx values are being used):
    Bridge loan with LTV of 75%
    existing home broker valued at $585K
    existing mortgage payoff $214k (360 month loan @ 3.875%)
    New home price $600k
    Bridge loan 4.2% for 6 months
    cash available $20k
    Please let me know if you need additional info or make assumptions as necessary. Thank you!

    • I’m sorry, I provide the calculators free, but I don’t "run the numbers." If you have a question, please ask, and I’ll try to answer them.

      • Sorry – poor choice of words on my part.
        In using the bridge loan calculator, which of the dollar amounts I provided go in which fields of the calculator and, if any, what values am I missing in my original comment to complete the calculation?
        Thanks!

        • Hi,

          The point of this calculator is to see if a bridge loan is required given your particular financial situation. This is how you should enter the values:

          Purchase Price?:           $600,000.00
          Cash Available?:            $20,000.00
          First Mortgage?:           $214,000.00
          First Interest Rate?:            3.875%
          First Term? (Months) (#):          360
          Bridge Loan Interest Rate?:     4.2000%
          Anticipated Bridge Loan Term? (#):  24
          

          You’ll need to adjust the above some. You said the first mortgage is for 360 months, and the balance is $214k. For the # of months for the first mortgage, you’ll want to enter the number of remaining months. Otherwise, the first mortgage payment will be quoted too low.

        • Wil, I made an error when I replied to your message. I didn’t think about what you had written carefully enough. The bridge loan calculator is NOT concerned with your existing mortgage. However, you should know what equity you have in your existing home, and you do – $371,000 (585,000 – 214,000). This is how you should use the calculator, assuming that the lender for your new mortgage will want 20% down $120,000.

          Fill the calculator in this way:

          Purchase Price?:           $600,000.00
          Cash Available?:            $20,000.00
          First Mortgage?:           $480,000.00
          First Interest Rate?:            3.875%
          First Term? (Months) (#):          360
          Bridge Loan Interest Rate?:     4.2000%
          Anticipated Bridge Loan Term? (#):  24
          

          The error I made was using your existing mortgage as the "First Mortgage." First mortgage here, refers to the new mortgage that you plan to get on the new home.

          The results tell you you’ll need a bridge loan:

          Bridge Loan:                $100,000.00
          First Mortgage Payment:       $2,257.14
          Bridge Loan Payment:            $350.00
          Both Payments Total:          $2,607.14
          

          The equity you have in your current home, $371,000, is more than enough to cover the bridge loan of $100,000.

          The payment total is the amount that covers the bridge loan and the new mortgage.

          Sorry for my error. I hope this clarifies this calculation for you, and hopefully, you’ll be able to adjust the numbers to meet your particular case for the new mortgage.

  • Sandra Davis says:

    Wow, what a great website! I have spoken to a couple of local loan officers, and I still don’t completely comprehend the bridge loan. One loan officer said they only lend 70% of our equity, which left only $8000 for a bridge loan. I did run the numbers on your handy calculator, but it doesn’t ask for our current appraised value. I’m trying to understand what actually happens when we get the bridge loan, it is showing an amount of $131,000, is that the down payment for the new home? Thank you in advance for your help!!
    Purchase Price?:
    $350,000.00
    Cash Available?:
    $10,000.00
    First Mortgage?:
    $209,000.00
    First Interest Rate?:
    3.8750%
    First Term? (Months) (#):
    180
    Bridge Loan Interest Rate?:
    8.0000%
    Anticipated Bridge Loan Term? (#):
    12
    Bridge Loan:
    $131,000.00
    First Mortgage Payment:
    $1,532.89
    Bridge Loan Payment:
    $873.33
    Both Payments Total:
    $2,406.22

    • Thank you. I appreciate the compliment.

      The point of this calculator is to tell the user if a bridge loan is needed and if so, for what amount. In addition, it calculates the bridge loan payment amount and the total payment amount (the bridge loan payment plus the payment amount for the new mortgage).

      In the example you provided, the $131,000 is the amount of the bridge loan.

      The bridge loan (131,000) + the first (new) mortgage (209,000) + cash available (10,000) = $350,000 purchase price

  • Hi Karl,

    That is an interesting calculator, is it available for websites to use. I run a bridging loan company in London U.K, I’m just curious

  • Ah ok, could you let me know if any bridging loan calculators become available?
    I’d appreciate it. I do have one on a page but the design is not so good and I cant seem to find any online. I think I stumbled on your site before about 18 months ago when I was searching for a calculator. Did you have an article on the subject before?
    By the way, can I send an email on an unrelated subject?

    • Yes, I’ll let you know should I come out with a bridge loan calculator plugin for other sites.

      I’ve not written any articles about bridge loans. In fact, I recently was reminded that written instructions for this page are missing!

      Yes, feel free to send.

  • Karl, I’m confused with the calculation. My current home is paid for and can easily be sold for $575,000. I want to purchase a home for $575,000. Am I only taking a bridge loan for the 20% down payment ($115,000). Thank you for your time.

    • Ok, but since you didn’t ask an actual question, I can only guess as to what you find confusing.

      You don’t really need to worry about the value of your current home, at first. The purpose of this calculator is to tell a user if a bridge loan is needed. If a bridge loan is needed (based on the cost of the new home, and the cash available for the down payment) then users can look to the equity they have in their current home. If they have enough equity, they can use the equity by borrowing against it for the "bridge loan."

      Just answer the questions, can click calc.

      Does this clear things up? If not, please ask again.

  • Karl,

    I’m looking at a new home purchase price of $275,000 max, $0 (zero) cash available, $38,000 and 89 months left on existing mortgage at 3.375%. Assuming 20% down payment and a Bridge Loan Interest Rate of 5.375%, have I input everything into the calculator correctly?
    Purchase Price: $275,000
    Cash Available: $0
    First Mortgage: $220,000
    1st Interest Rate: 3.375%
    1st Term (Months)#: 89
    Bridge Loan Interest Rate: 5.375%
    Anticipated Bridge Loan Term(#): 6 [months]

    Bridge Loan: $55,000.00
    First Mortgage Payment: $2,797.63
    Bridge Loan Payment: $246.35
    Both Payments Total: $3,043.98

    The result for the 1st mortgage payment with 89 for the 1st term number seems awfully high which is why I am asking. Also, what purpose does the Anticipated Bridge Loan Term serve? It doesn’t affect the calculation in any way regardless of the number entered.
    Thank you for your time sir.

    • Hi Andy, everything appears to be fine except for the first term. The 89 months left is for the current mortgage. How long do you want the new mortgage to be? One you set it to something a bit more reasonable, the first mortgage payment will be less.

      Note, this calculator is not going to include the payment amount you are currently making on the existing mortgage. So you’ll need to add that to the Both Payments Total to know your total monthly obligation until you sell your exiting property.

  • Here’s our situation. We are mortgage free in our home worth $500K and also own a cottage. We would like to sell the house and move to the cottage but it would need to be demolished and rebuilt. Rebuild costs would be between 250K and of course we don’t have that lying around. What would be our best option for temporary financing – bridge or line of credit type of financing. We figure it would take maybe 8 months to build.

    • Your question – What would be our best option for temporary financing, is not one that I’m prepared to answer. I can’t give advice because I don’t know your personal situation or where you are from (taxes may have an impact).

      However, there are two options that you can consider.

      • a home equity line of credit using your present home as collaterial
      • a construction loan, using the land your cottage is on and the new home as it is built as the collaterial

      The loan with the lowest interest rate would generally be the better option.

      There might be other financial products as well that you could use.

      If you want to keep track of the payments and interest you are being charged during the construction period, you can use this calculator.

Comments, suggestions & questions welcomed...

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