Estimate the monthly payment, points, and total cost for your numbers with the bridge loan cost calculator.
A commercial bridge loan typically costs more than a bank loan, and that premium buys speed and flexibility. Expect rates around 7 to 13 percent, origination fees of 1 to 3 points, and interest-only payments over a 6 to 36 month term. The all-in cost also includes third-party items like appraisal, legal, and title. Confirm current numbers before you commit.
Bridge loans cost more than bank loans. That premium is the trade you are making. You are paying a premium for speed, flexibility, and the ability to close on deals a bank will not touch. The question is not whether a bridge loan is expensive in the abstract, it is whether the cost is worth what it lets you do. Here is how the pricing actually works.
Interest rates on commercial bridge loans commonly run from 7 to 13 percent. Where a specific deal lands inside that range depends on the property, the amount of equity, the strength of the exit, and the lender's read on risk. A clean deal with a strong property, real equity, and an obvious exit prices toward the lower end. A more complicated situation prices higher.
Bridge loans are almost always interest-only, which keeps the monthly payment lower during the short term, since you are not paying down principal.
On top of the rate, bridge loans carry origination points, an upfront fee paid to arrange the loan. One point equals one percent of the loan amount, and bridge loans commonly run 1 to 3 points. On a $1 million loan, two points is $20,000, due at closing.
Points are part of the real cost, so they belong in your math from the start, not as a surprise at the closing table.
Bridge terms typically run from 6 to 36 months. The term should match your exit. If you need 18 months to stabilize a property and refinance, a 12-month term puts you under pressure you do not need. Matching the term to a realistic exit is one of the more important structuring decisions in the whole loan.
Beyond the rate and points, a bridge loan carries the same third-party costs as most commercial financing: appraisal, legal, title, and related fees. These are not lender profit, they are the cost of getting the deal done, but they are real money and they are due at closing.
The mistake borrowers make is comparing rates alone. A loan with a lower rate and higher points can cost more than a loan with a higher rate and lower points, depending on how long you hold it. The right comparison is the all-in cost: rate plus points plus third-party costs, measured against how long you will actually have the loan.
Ask each lender for that full picture. A lender who will not give you a clear all-in number is telling you something.
The honest answer is that it depends on what the bridge loan lets you do. If it means closing on a property before a seller walks, hitting a deadline that would otherwise trigger a penalty, or financing a deal a bank declined, the premium often pays for itself many times over. If you have time and a clean, conventional deal, a bank loan is cheaper and probably the better fit.
That is the real decision, and it is worth having a straight conversation about before you commit. Send us the deal and we will walk through the numbers and whether a bridge loan is the right tool. Confirm current rates and terms before you move forward.
Dillan is Managing Partner at BluRidge Funding, where he leads investor relationships and capital operations. He founded Summit Home Loans in 2018 and has spent his career on the capital side of real estate finance, matching deals to the right funding sources. More about the team.
Send the property, the loan amount, and your timeline. We will tell you whether it looks like something we can help with, usually within one business day.
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