Bridge loans from banks come mostly from regional banks, community banks, and credit unions rather than the big national names, which have largely stepped back from marketing standalone bridge products. Banner Bank is one current example, offering a residential bridge loan that lets homeowners tap up to 80% of their existing home’s equity with interest-only payments for up to 12 months. If your deal is a straightforward residential move — buying a new primary home before selling your current one — a bank or credit union is usually the cheapest place to borrow. If the deal involves an investment property, a commercial acquisition, or a closing measured in days, you will likely end up with a non-bank lender instead.
Which Banks Still Offer Bridge Loans
The bridge loan business at banks is concentrated in two places: regional and community banks, and credit unions. Larger national banks have pulled back from advertising bridge products, so borrowers looking for a bank-originated bridge loan should start locally rather than with a national brand.
Banks that do offer bridge financing focus almost exclusively on residential deals for homeowners buying a new property before the old one sells. Banner Bank’s product is representative of what a bank bridge loan looks like: interest-only payments, a term capped at 12 months, and access to up to 80% of the current home’s equity. Expect similar structures at other regional lenders that offer the product, though rates, fees, and maximum loan-to-value figures vary.
One condition to expect from banks: many require you to hold your primary mortgage with them, or to originate a new one with them as part of the bridge transaction. That tie-in narrows your shopping options but is often what makes the bank comfortable enough to fund the bridge in the first place.
Non-Bank and Private Lenders as Alternatives to Banks
Banks are not the whole market. Two other categories of lender handle deals banks decline.
Non-Bank Specialty Lenders
Non-bank lenders dominate commercial bridge financing. Companies like Kiavi, Ready Capital, and iBorrow specialize in loans for investment properties, renovations, and commercial acquisitions where a traditional bank would pass. These lenders underwrite deals based heavily on the collateral’s value and your exit strategy rather than on personal income history alone. Closing timelines are compressed, often two to four weeks compared with the 30 to 60 days a bank typically needs. The tradeoff is higher interest rates and fees.
Private Money Lenders and Investment Funds
Private money lenders — high-net-worth individuals, family offices, and institutional debt funds — handle the most specialized bridge scenarios. Distressed property, non-traditional collateral, or a closing deadline measured in days are the situations where private capital is often the only option. These lenders move faster than anyone else and impose fewer bureaucratic hurdles, but they charge the highest rates and fees in the market, and their loan documents are less standardized. Scrutinize every clause, particularly the default and extension provisions, before you sign.
How to Choose Between a Bank and a Non-Bank Bridge Lender
The right lender depends on four factors: what kind of property you’re borrowing against, how fast you need to close, how strong your credit is, and how sensitive you are to cost.
A bank or credit union is usually the right call when the collateral is a primary residence, your credit score is 680 or higher, and you can wait three to four weeks to close. Rates will be at the low end of the current market range, roughly 7% on the cleanest deals, and closing costs will be predictable.
A non-bank specialty lender makes sense when the property is an investment or commercial asset, when your credit sits in the 620 to 650 range, or when you need to fund in two to four weeks. You will pay more, but the deal will actually happen.
A private money lender is the answer when nothing else can move fast enough or when the collateral is unusual. Rates and fees are the highest in the market, and standardization is the lowest. This is a last-mile option, not a starting point.
What Bank Bridge Loans Cost
Bridge loan interest rates currently run from roughly 7% to 12%. Bank-originated residential bridge loans sit at the low end; private money and high-leverage commercial deals push toward or beyond the top.
Most bridge loans use interest-only payments for the full term. You pay only interest each month, then owe the entire principal as a balloon payment at maturity. That keeps monthly cash flow manageable during the transition but concentrates the risk at the end.
Origination fees typically run 1% to 3% of the loan amount, paid at closing. You will also pay for an independent appraisal, title work, and attorney fees. On a $300,000 bridge loan with a 2% origination fee and 9% interest over eight months, the origination alone costs $6,000, before monthly interest payments of roughly $2,250.
Two fees are worth pulling out of the loan documents before you sign. First, extension fees: if your exit stalls and you need extra time, most lenders will extend the maturity date, but the price is set in the original loan agreement, not negotiated under pressure later. Second, prepayment penalties. They are less common on bridge loans than on conventional mortgages, and many bridge lenders do not charge them, but some impose 1% to 2% of the remaining balance for early payoff. A prepayment penalty on a product designed for early repayment is worth questioning.
What Banks Look For in a Bridge Loan Application
Bridge loans are asset-backed first, borrower-credit second. Even so, banks apply tighter borrower standards than non-bank lenders do.
Collateral and Loan-to-Value
The property securing the loan will be professionally appraised, and the lender will advance only a percentage of that value. Residential bridge loans from banks typically lend up to 80% of the current home’s value minus the existing mortgage balance. Commercial bridge lenders generally sit between 65% and 80% loan-to-value; on a property appraised at $1 million, that means borrowing between $650,000 and $800,000.
Credit Score
Traditional banks and credit unions usually want scores of 680 or above. Many non-bank and hard-money lenders will go down to 620 or 650 and compensate for the added risk with higher pricing.
The Exit Strategy
This is where applications succeed or fail. Every bridge lender wants documented proof of how you will repay the principal. For a home sale, that means the property is listed, a broker’s price opinion is on file, or ideally a signed purchase agreement is in hand. For a refinance takeout, the lender wants projections showing the property will qualify for permanent financing at maturity, plus a pre-qualification or commitment letter from the takeout lender. Weak exit documentation sinks applications regardless of collateral strength. Assemble these documents before you approach any lender.
You will also need recent tax returns, personal and business financial statements, and bank statements showing enough liquidity to cover interest payments through the full term without depending on the exit event happening on schedule.
Protections You Don’t Get, Even From a Bank
Bridge loans sit in a regulatory gap that most borrowers do not anticipate, and the gap applies whether the lender is a bank or not.
Federal law exempts bridge loans from the Real Estate Settlement Procedures Act (RESPA), which normally requires standardized cost disclosures on residential mortgages. The regulation classifies a bridge loan secured by one- to four-family residential property as “temporary financing” and excludes it from coverage entirely.1Consumer Financial Protection Bureau. Coverage of RESPA – 1024.5 You will not automatically receive the Loan Estimate and Closing Disclosure forms that make comparison shopping straightforward on a conventional mortgage.
Federal lending rules also exempt bridge loans with terms of 12 months or less from the ability-to-repay requirements that apply to higher-priced mortgage loans. Those rules normally require a lender to verify you can afford the payments before funding. On a qualifying bridge loan, that verification is not legally required.2Consumer Financial Protection Bureau. Minimum Standards for Transactions Secured by a Dwelling – 1026.43 The same exemption applies to special appraisal requirements for higher-priced loans.3eCFR. Part 226 Truth in Lending (Regulation Z)
The practical point: you are more on your own with a bridge loan than with a standard mortgage, even at a bank. Read every document, compare offers, and do not assume the standard disclosure regime is working in the background. It is not.
Alternatives if a Bank Bridge Loan Isn’t Right
A bridge loan is not the only way to fund a new home purchase before selling the old one, and for many borrowers it is not the cheapest.
- A home equity line of credit (HELOC) lets you borrow against your existing home’s equity at a lower interest rate than a bridge loan, with a draw period measured in years rather than months. You pay interest only on what you draw, and closing costs are minimal. Setup takes longer than a bridge loan, and the rate is variable.
- A home equity loan works like a HELOC but delivers a lump sum at a fixed rate with a repayment period of five to 15 years. More payment certainty, less flexibility.
- A cash-out refinance replaces your existing mortgage with a larger one and gives you the difference in cash. It works best when current rates are favorable and equity is substantial, though the process is slower than a bridge loan closing.
- A sale contingency offer costs nothing in fees or interest but weakens your position with sellers, and in competitive markets sellers routinely reject contingent buyers.
A HELOC is the most common substitute for a bank bridge loan and makes sense if you can put one in place before you need the funds. A bridge loan wins when speed is the priority and you have high confidence in a quick sale.