Mortgage Guides
Bridge Loans 2026: How to Buy Your Next Home Before Selling
6 min read · 2025-12-01
Bridge loans let you tap your current home's equity to buy your next home — without a contingency.
One of the biggest frustrations in real estate is the timing mismatch: you want to buy before you sell, but you need your home sale proceeds for the down payment. Bridge loans solve this by providing short-term financing secured by your current home — giving you cash to close on the new home while your existing home is on the market.
How Bridge Loans Work
A bridge loan is typically a short-term loan (6–12 months) for 80–90% of your current home's value minus your existing mortgage balance. This gives you the equity in cash form for your next down payment. When your current home sells, you repay the bridge loan from the proceeds.
Bridge Loan Costs
- Interest rate: Prime + 2–4% (bridge loans are expensive — often 9–12% in 2026)
- Origination fee: 1–3% of loan amount
- Term: 6–12 months with possible extensions
- Qualifying: Based on both home values and your ability to carry both mortgages temporarily
Alternatives to Bridge Loans
- Home equity line of credit (HELOC): Cheaper if you have equity and can qualify
- Sale contingency offer: Buy new home contingent on selling current home — sellers dislike this in competitive markets
- Trade-in programs (Opendoor, Orchard, Knock): Buy first, sell later with guaranteed offer on current home
- Cash-out refinance: Tap equity from current home before listing it
Bridge loans are expensive and should be used as a last resort. If your current home will sell quickly, a contingency offer or HELOC may be cheaper. Bridge loans make most sense when inventory is tight and you need to compete without a contingency.
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