Real Estate Term
Bridge Loan
A short-term loan used to bridge the gap between buying a new property and selling an existing one.
What is Bridge Loan?
A bridge loan is a short-term loan that covers the gap when you buy a new home before your existing one has closed, letting you access your current equity for the down payment. It is repaid once your old property sells, and typically carries a higher interest rate because it is temporary and tied to a pending sale. Buyers use bridge financing to avoid moving twice or missing out on a new home while waiting for their sale to complete.
Frequently asked questions
Related terms
EquityThe difference between a property's market value and the amount owed on the mortgage.Down PaymentThe portion of the purchase price paid upfront by the buyer, typically expressed as a percentage.ClosingThe final step in a real estate transaction where ownership transfers from seller to buyer.MortgageA loan used to purchase real estate, with the property serving as collateral.
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