David is a Chartered Financial Analyst and residential mortgage expert with 15 years of experience in complex loan scenarios and real estate financing.
This 4-in-1 Bridge Loan calculator helps you understand the costs of short-term financing. Enter any three variables—Loan Amount, Annual Rate, Term, or Monthly Payment—to solve for the fourth.
Bridge Loan Calculator
Bridge Loan Amortization Formulas
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
Solve for Loan Amount (P):
P = M [ (1 + i)^n – 1 ] / [ i(1 + i)^n ]
Solve for Term (n):
n = -ln(1 – (P*i / M)) / ln(1 + i)
Solve for Rate (i):
*Solved iteratively (no simple formula)
Formula Variables
- (M) Monthly Payment: The monthly payment. Many bridge loans are interest-only, but this calculator shows the fully amortized P&I payment.
- (P) Loan Amount: The total amount borrowed.
- (R) Annual Rate: The annual interest rate for the loan.
- (T) Loan Term (Years): The total length of the loan. Bridge loans typically have short terms (e.g., 6 months to 1 year).
- (i): Monthly interest rate (R / 12 / 100)
- (n): Total number of payments (T * 12)
Related Calculators
- Mortgage Payment Calculator
- Interest-Only Calculator
- Home Equity Loan Calculator
- Construction Loan Calculator
What is a Bridge Loan?
A bridge loan, also known as “bridge financing” or a “swing loan,” is a short-term loan designed to “bridge the gap” between a current financial need and a future, larger source of financing. In real estate, it’s most commonly used by homeowners who want to buy a new house before they have sold their current one. The bridge loan provides the down payment for the new home, and it’s paid back in full as soon as the old home sells.
Because they are short-term and convenient, bridge loans typically have higher interest rates and origination fees than traditional long-term mortgages. They are secured by the borrower’s current home as collateral.
While many bridge loans are structured as “interest-only” payments, this calculator shows you the fully amortized payment (Principal & Interest) required to pay off the loan within the short term. This helps you understand the true cost or solve for other variables, such as the loan amount you can afford for a specific payment.
How to Calculate Bridge Loan Payments (Example)
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Gather Your Loan Details
You need to borrow $50,000 (P) for a down payment. The lender offers a bridge loan at 10.5% (R) with a term of 1 year (T). You want to find the fully amortized monthly payment (M).
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Find Monthly Rate (i) and Total Payments (n)
Monthly Rate (i) = 10.5% / 12 / 100 = 0.00875
Total Payments (n) = 1 Year * 12 = 12 -
Apply the Amortization Formula
The formula is: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
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Calculate the Value
M = $50,000 [ 0.00875 * (1.00875)^12 ] / [ (1.00875)^12 – 1 ]
M = $50,000 [ 0.00875 * 1.10978 ] / [ 1.10978 – 1 ]
M = $50,000 [ 0.0097105 ] / [ 0.10978 ]
M = $50,000 * 0.088454 -
Final Result
Your fully amortized monthly payment would be $4,422.70. (An interest-only payment would be $50,000 * 0.00875 = $437.50).
Frequently Asked Questions (FAQ)
They can be very useful if you are in a competitive housing market and need to make a non-contingent offer on a new home. However, they are risky. If your old home doesn’t sell quickly, you could be stuck paying two mortgages plus the bridge loan payment.
How long is a typical bridge loan?Bridge loans are very short-term, typically ranging from 6 months to 12 months. Some may extend up to 3 years, but this is less common.
Is this calculator for interest-only payments?No, this calculator computes the fully amortized (Principal & Interest) payment. To find an interest-only payment, simply use the “Simple Interest Calculator” or manually calculate: `(Loan Amount * (Annual Rate / 100)) / 12`.
How much can I borrow with a bridge loan?Lenders typically allow you to borrow a combined total (including your current mortgage and the new bridge loan) of up to 80% of your current home’s value. You can use this calculator to find the Loan Amount (P) you can afford by entering your desired Monthly Payment (M), a typical Rate (R), and Term (T).