A bridge loan is short-term financing designed to “bridge” the gap between a current financial need and a longer-term solution — most commonly used when a borrower needs to purchase a new property before selling an existing one. Rather than waiting for a sale to close, bridge financing lets buyers move quickly, make competitive offers, and avoid the disruption of finding temporary housing between transactions.

Bridge loans are typically secured by the borrower’s existing property, their new property, or both, and are structured to be repaid quickly — usually within six months to three years — once the underlying property sells or the borrower secures permanent financing. Because of this short timeline, lenders place heavy emphasis on the exit strategy: a clear, realistic plan for how and when the loan will be repaid.

These loans are especially valuable in competitive real estate markets, where sellers favor buyers who aren’t contingent on selling another home first. They’re also used by real estate investors to acquire, renovate, or reposition a property before refinancing into long-term financing, and by business owners who need to access property equity quickly to fund an opportunity.

Because bridge loans prioritize speed and flexibility over long-term structure, they generally carry higher interest rates and fees than conventional mortgages, and often come with interest-only payments to keep monthly costs manageable during the loan term. Qualification typically focuses on the equity in the current property and the strength of the exit strategy rather than solely on income documentation.

For the right situation, a bridge loan can be the tool that makes a time-sensitive purchase or investment possible — a broker can help evaluate whether the numbers and timeline make sense.