What does bridge debt actually cost you?
Most sponsors compare rate-to-rate and miss the real picture. This calculator surfaces origination points, extension fees, and the bridge-to-perm refinance cost so you can see total carry over your actual hold period.
Reading the comparison
The calculator runs two scenarios in parallel against the same loan amount and hold period:
- Bridge path: You take the bridge today (interest-only payments, points, possible extension fees), then refinance into the term loan at the bridge's maturity — paying another round of origination on the take-out.
- Term path: You wait for the term loan to close (45–90 days, typically), pay one round of origination, and amortize P&I from day one over your hold period.
The verdict box at the bottom shows which path costs less in total dollars over the entire hold. That's the right comparison — not monthly payment, not rate.
When bridge is worth the premium
Three deal types where bridge debt's higher cost is usually justified by deal-level economics:
- Off-market or contested acquisitions where certainty of close (and 10-day close) wins the bid. The discount to fair value often exceeds the bridge premium.
- Value-add deals where the property doesn't currently underwrite to term-loan DSCR. Bridge funds the lease-up or renovation; the take-out refinances once the property stabilizes at higher NOI.
- Maturity defaults / recap deals where existing debt is coming due and conventional refinance isn't executable in time. Bridge buys 12–24 months to either reposition, sell, or qualify for term debt.
Where sponsors over-pay for bridge
- Using bridge for stabilized assets that could go straight to term debt
- Underestimating how long the bridge will actually be outstanding (extensions are common — model 18 months for any 12-month bridge)
- Ignoring exit-fee minimums (some lenders require 6–12 months of minimum interest even on early payoff)
- Failing to negotiate the take-out path with the bridge lender upfront
Components most calculators miss
The comparison above includes four cost categories standard online calculators usually skip:
- Extension fees applied automatically when hold exceeds initial bridge term
- Take-out origination — a second round of points when bridge → term
- Term-loan interest portion only (not principal — that's not a cost, it's equity buildup)
- Bridge interest-only vs term P&I — different payment structures means different cash flow
When you're ready to compare actual lender quotes, submit your deal to Caplli. We have active bridge relationships at rates from asset-based pricing to debt-fund pricing, and we'll pull term-loan indications in parallel so you can make the comparison on real numbers — not online estimates.
Bridge loans — frequently asked questions
When does a bridge loan make sense over term financing?
Bridge financing makes sense when (1) you need to close in days, not months — typically a contested or off-market deal where speed wins it; (2) the property isn't yet ready for permanent debt because it needs leasing, renovation, or stabilization; or (3) you're recapitalizing existing debt that's maturing and you can't underwrite the property to term-loan standards yet. The cost premium over term debt is the price of speed and flexibility — it should always be paid for by deal-level economics.
How much more expensive is a bridge loan vs a term loan?
Bridge loans typically price 300–500 bps above conventional term debt. On a $5M loan, that's roughly $150K–$250K of additional annual interest. Add 1–3 points of origination on the bridge versus 0.5–1.0 points on the term loan, plus extension fees if you go beyond the initial bridge term. Most well-priced bridge deals carry 30–60% premium over term debt total cost — until you factor in the deal you'd have lost without it.
What's the maximum LTV on a bridge loan?
Acquisition bridge loans go up to 65–75% LTV (loan to value) on most commercial assets. For value-add deals, lenders also look at LTC (loan-to-cost) of 70–80% including renovation reserves. Construction bridges go to 60–70% LTC. Multifamily bridge can push higher (75–80% LTV) with strong sponsor and clear lease-up plan. Hotel bridge is more conservative — typically 60–65% LTV at acquisition.
How fast can a bridge loan close?
Realistic bridge close timing is 10–20 business days from term sheet to funding, assuming clean documentation. The fastest deals can close in 5–7 days if all third-party reports (appraisal, environmental, title) are already done. Most delays come from environmental Phase I (3–5 days minimum), appraisal turnaround, or title/survey issues — not the lender's underwriting.
How do I exit a bridge loan?
Three standard exits: (1) Refinance into permanent term debt once the property hits stabilization — typically 12–24 months for value-add. (2) Sell the property to a buyer with their own financing. (3) Pay off the bridge from accumulated capital (rare for most sponsors). Lenders underwrite the credibility of your exit at origination — they want to see executed leases, comparable sales, or a take-out commitment letter before they fund.
What fees should I expect beyond rate on a bridge loan?
Beyond the rate itself: origination points (1–3% at close), exit fee or prepayment minimum (some lenders require 6–12 months of minimum interest), extension fees if you extend past the initial term (typically 0.25–0.50% per 6-month extension), and standard third-party costs (appraisal $5K–$15K, environmental $3K–$8K, title and legal). Total transaction costs typically run 3–5% of the loan amount.
Get real bridge + term quotes side-by-side
Caplli pulls bridge and term indications in parallel from our 500+ lender network. You see actual executable pricing for both paths in 5–10 business days — then decide on real numbers, not estimates.