| Scenario | Loan | Rate | Term | Structure | Fees | Typical payment | Balloon payoff |
|---|---|---|---|---|---|---|---|
| Fix-and-flip bridge | $150,000 | 12.50% | 12 months | Interest-only | 1.50% + $1,250 | ~$1,563 / month | $150,000 |
| Short-term refinance gap | $250,000 | 10.75% | 9 months | Balloon (IO) | 2.00% + $1,800 | ~$2,240 / month | $250,000 |
| Temporary move-up loan | $300,000 | 9.25% | 18 months | Partial amortization | 1.00% + $2,000 | Varies by amortization term | Reduced by principal payments |
Daily: r = (1 + APR/365)^(365/m) − 1
Monthly: r = (1 + APR/12)^(12/m) − 1
Annual: r = (1 + APR)^(1/m) − 1
- Enter the loan amount, rate, and term in months.
- Select a payment structure that matches your term sheet.
- Add fees, closing costs, and any prepaid interest days.
- Optionally include escrow and extra principal paydown.
- Click Calculate to view results above the form.
- Export the schedule using the CSV or PDF buttons.
Bridge loan cash-flow profile
Bridge financing is designed for short holding periods, so the schedule is dominated by interest and fees. A common structure is interest-only with a balloon payoff. For example, a $150,000 bridge at 12.50% with monthly payments produces roughly $1,563 in period-one interest and preserves the full principal for payoff at maturity.
How payment structure shifts risk
Interest-only keeps monthly outflows predictable, but concentrates risk at exit because the balloon equals the remaining balance. Fully amortizing terms reduce the balloon toward $0, yet increase periodic payments because principal is repaid every cycle. Partial amortization uses a long amortization term, such as 360 months, to lower payments while still trimming principal.
Fees and reserves change the true cost
Origination fees (often 1%–3%) and fixed closing costs act like additional interest because they reduce net proceeds. If fees total $3,500 on a $150,000 loan, the borrower receives $146,500 before any reserve. Adding a $5,000 interest reserve increases cash to close, but may prevent missed payments during renovations or listing delays.
Rate conventions affect comparisons
This calculator converts the annual rate to a periodic rate using the selected compounding basis. Daily compounding can produce a slightly higher effective periodic rate than a nominal division. When comparing lenders, keep payment frequency consistent; weekly payments at the same APR accelerate cash outflow and can increase effective cost versus monthly. Sensitivity checks help. A 1.00% rate increase on $150,000 adds about $125 per month under interest-only (150,000 × 0.01 / 12). Extending term from 9 to 12 months adds three more interest payments plus carries the balloon longer. Use this before choosing leverage.
Using the exports for decision-making
Export the CSV to audit every payment line, then filter by interest, principal, and remaining balance to validate your exit plan. The PDF is useful for approvals because it preserves the schedule layout. Review total interest, estimated APR (fees included), and balloon payoff together; the safest bridge is the one your timeline can comfortably repay.
FAQs
1) What is a bridge loan?
A bridge loan is short-term financing used to cover a timing gap, such as buying before selling. It typically has higher rates, fees, and a balloon payoff at maturity.
2) Why does the balloon payoff matter?
The balloon is the remaining balance due at the end of the term. If your sale or refinance is delayed, you may need an extension, additional fees, or alternative funds to retire the balance.
3) How is “Estimated APR” calculated here?
The calculator approximates APR by solving IRR on cash flows: net proceeds at closing versus payments and payoff. It includes fees and reserve as upfront costs, but excludes escrow because escrow is not borrowing cost.
4) What should I enter for compounding?
If your quote states a simple annual rate with monthly payments, use nominal. If documents mention daily accrual or compounding, select daily. Keep the same convention when comparing lenders to avoid misleading differences.
5) Does extra principal reduce total interest?
Yes. Extra principal lowers the outstanding balance faster, reducing future interest and shrinking the balloon payoff. If your structure is interest-only, extra principal acts as an optional paydown against the balloon.
6) Why include an interest reserve?
An interest reserve can prevent missed payments when cash flow is uneven, such as during renovations. It raises cash-to-close and effective cost, but can reduce default risk if your project timeline is uncertain.
- Bridge loans often have balloon payoffs; verify exit strategy timing.
- Compounding and payment frequency can change the effective periodic rate.
- Fees and reserves can materially change effective borrowing cost.