Bridge Loan Cost Calculator
Total cost of capital and effective APR on a short-term bridge loan.
Your numbers
Total cost of capital
$38,750.00
Over a 6-month hold · 15.50% effective APR
- Interest (interest-only)$23,750.00
- Origination fee$7,500.00
- Exit fee$5,000.00
- Other fixed fees$2,500.00
- Effective APR (all-in)15.50%
- Loan amount
- $500,000
- Monthly interest
- $3,958
- Stated rate
- 9.50%
- Effective APR
- 15.5%
Effective APR annualizes total fees plus interest over the actual hold, so it runs well above the stated rate on a short bridge. Confirm terms with the lender.
Frequently asked questions
What does a bridge loan really cost?+
The stated rate is only part of it. Add the origination fee, any exit fee and fixed costs such as appraisal and legal, then divide by the loan amount. That total, annualized over the actual hold, is the effective APR.
Why is the effective APR so much higher than the rate?+
Fees are charged once but the loan lasts only a few months. Spreading a fixed set of fees over a short hold pushes the annualized cost well above the note rate - the shorter the hold, the bigger the gap.
Are the loan payments interest-only?+
Bridge loans are usually interest-only with the principal repaid at exit, from the sale or a refinance. This calculator assumes that structure and counts interest for the number of months you expect to hold.
What makes a bridge loan expensive
- Interest
- Usually interest-only and paid monthly, so it scales directly with how long you hold the loan.
- Fees up front and at exit
- Origination is charged at funding and an exit fee at payoff. Both are fixed costs regardless of hold time.
- Time is the lever
- The same fees spread over three months cost far more per year than over twelve - a delayed exit is the most expensive mistake.