Bridge Loan Calculator: Equity, Interest and Closing Gap

Bridge Loan Calculator

Estimate the temporary financing gap when buying a new home before selling the current one, including equity, CLTV capacity, interest, fees and payoff.

Use an estimated payoff balance, not only the latest statement principal.
Used only when “Entered requested amount” is selected.
Capacity, fees and display options
Applied here to expected current-home value minus the entered mortgage payoff.

How the bridge loan calculator works

The purchase funding gap is the new home price plus buyer closing costs, minus the new first mortgage and cash available. The model then compares that gap—or a requested amount—with the bridge capacity produced by the entered combined loan-to-value limit on the current home.

Estimated bridge capacity: current-home value × maximum CLTV − current mortgage payoff. Net equity after sale: expected sale price − mortgage payoff − selling costs. Simple bridge interest: modeled bridge × annual rate ÷ 12 × months.

When interest is paid monthly, the regular payment is the simple monthly interest and the payoff contains principal only. When interest is accrued, the monthly payment is zero in this model and principal plus accumulated simple interest is due at payoff.

Worked example

The example assumes a current home worth US$500,000 with a US$250,000 mortgage and 6% selling costs. Net equity after the sale is US$220,000. The new home costs US$650,000, buyer costs are US$10,000, the new first mortgage is US$500,000 and US$50,000 of cash is available, so the purchase funding gap is US$110,000. At an 80% CLTV limit, estimated bridge capacity is US$150,000.

A US$110,000 bridge at 10% for six months produces US$916,67 of monthly interest and US$5,500 of total interest. With 2 points and US$1,500 of other lender fees, total financing cost is US$9,200. If interest is paid monthly, the modeled payoff is US$110,000 and estimated equity remaining after payoff is US$110,000.

CLTV rules differ. A lender may use an appraisal rather than the expected sale price, discount available equity, include other liens, secure the bridge with the current home, the new home or both, and require reserves. Replace the assumptions with the actual term sheet.

Important limits

This calculator is an educational planning estimate, not a loan offer, approval, appraisal, disclosure or financial advice. It uses whole months, a fixed annual rate and simple interest. It does not model daily interest, compounding, staged draws, mortgage overlap payments, taxes, insurance, escrow, appraisal or legal charges unless entered, prepayment terms, extension fees, default interest, sale-price changes or closing delays. Selling and buyer closing costs are user inputs, not local estimates.

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Frequently asked questions

Is bridge-loan interest always paid monthly?

No. Agreements differ. This tool compares monthly interest payments with simple interest accrued to payoff; the actual note controls timing and compounding.

Why can the bridge capacity differ from net sale equity?

Net sale equity subtracts the expected mortgage payoff and selling costs. The capacity estimate instead applies the entered CLTV limit before subtracting the mortgage, so it may intentionally leave an equity cushion.

Does a zero purchase gap mean a bridge loan is unavailable?

No. It only means the entered first mortgage and cash cover the modeled purchase requirement. Select the requested-amount mode if you need to test a separate bridge amount, subject to the entered CLTV capacity.