Bridge Loan vs HELOC: The Real 90-Day Cost

8 min read · Last updated October 12, 2026

Key takeaways:

Florida Capital Bank’s own published bridge loan program caps borrowing at 80% of your current home’s value while it is listed, a 20% equity floor, rising to 89.99% once it is under contract.
In a worked $200,000 bridge over 90 days, a bridge loan costs $6,945 against $3,615 for a home equity line of credit (HELOC), a $3,330 gap driven mostly by the one-time origination fee, not the interest rate.
This lender’s bridge rate, prime plus 1%, or 8.00% today, sits only 0.60 percentage points above Freddie Mac’s current 7.40% conventional average (week of October 8, 2026), far under the “2 to 4 points” figure commonly quoted for bridge loans in general.
Fannie Mae’s Selling Guide requires a bridge loan’s payment to count against your debt-to-income ratio (DTI) on the new mortgage application, unless you already have a fully executed sales contract on the home you are leaving.

Buying before you sell usually comes down to three tools: a bridge loan, a HELOC, or a contingent offer with no financing cost at all. In a bridge loan vs HELOC comparison built on real lender terms, the HELOC wins a 90-day hold by $3,330, not because its rate is much lower, but because the bridge loan’s one-time fee outweighs a rate gap that turns out smaller than most blog posts claim.

Picture a homeowner named Dana: her current home is worth $500,000, she owes $200,000 on the mortgage, and she wants to buy a $550,000 home before the old one sells. She needs roughly $200,000 in cash to bridge the gap, and she returns in the worked example below. Which tool supplies that cash changes both her total cost and what her new lender counts against her at underwriting.

The fee, not the rate, is what makes a bridge loan expensive on a short hold.

What a bridge loan to buy before you sell actually requires

Generic advice says bridge loans need “20% equity” in the departing home. Florida Capital Bank’s bridge loan page confirms it: borrowers can access “up to 80% of your home’s value when listed for sale and 89.99% when under contract.” An 80% loan-to-value (LTV) cap while listed is a 20% equity floor stated the other way. That cap jumps to 89.99% LTV once you have a signed contract, since the lender’s risk drops sharply.

The bank prices the loan “based on prime plus one percent.” The Federal Reserve’s H.15 release puts the bank prime loan rate at 7.00% as of October 8, 2026, putting this program at roughly 8.00% today, just 0.60 points above Freddie Mac’s 7.40% conventional rate for the same week, tracked on Freddie Mac’s Primary Mortgage Market Survey (PMMS). The commonly repeated “2 to 4 percentage points” bridge-loan premium doesn’t hold up against this lender’s own math. Ask any bridge lender for its actual spread over prime, not the worst case online.

Fees matter more than the rate. Bridge programs commonly cite a 1% to 2% origination fee plus closing costs, fixed no matter how fast the old home sells, which is why fees dominate the cost math below.

There is a DTI wrinkle worth knowing before underwriting. Fannie Mae’s Selling Guide allows a bridge loan only if it is not cross-collateralized against the new property and the lender confirms you can carry all of this at once:

the new home’s payment
the old home’s payment
the bridge loan’s own payment

That payment normally counts against your debt-to-income ratio (DTI) on the new application, unless you already have a fully executed sales contract on the old home with financing contingencies cleared.

Bridge loan vs HELOC: the real 90-day cost

Here is Dana’s actual math: $200,000 in cash, pulled from her $500,000 home against a $200,000 mortgage balance, an 80% combined loan-to-value ratio (CLTV) on either product.

Bridge loan, Florida Capital Bank-style program, prime plus 1%, 8.00%, interest-only during the hold:

Interest for 90 days: $200,000 x 8.00% x (90 / 365) = $3,945
Origination fee at 1.5% of the loan amount: $3,000
Total 90-day cost: $6,945

HELOC, national average per Bankrate’s own survey, 7.33% as of October 7, 2026, for an 80% CLTV, $30,000 line, 700 credit score, no origination fee:

Interest for 90 days: $200,000 x 7.33% x (90 / 365) = $3,615
Origination fee: $0
Total 90-day cost: $3,615

The toll on the bridge is the rate premium, and the real premium depends entirely on which lender is standing in the booth.

The bridge loan costs Dana $3,330 more over the same 90 days. The rate gap is only 0.67 points. Most of the difference still traces back to the bridge loan’s one-time origination fee, not the interest rate, since $3,000 of the $3,330 gap is the fee alone.

A $3,000 fee, not a higher rate, is the whole reason the bridge loan costs more here.

Factor	Bridge loan	HELOC	Contingent offer
Rate on $200,000	8.00% (prime + 1%)	7.33% (national average)	No financing cost
Origination fee	$3,000 (1.5% typical)	$0 typical	$0
90-day cost	$6,945	$3,615	$0
Max LTV/CLTV	Up to 89.99% under contract	Typically 80% CLTV	Not applicable
Real risk	Carrying two homes if the sale slips	Carrying two homes if the sale slips	Losing the new house to another buyer
Best for	A homeowner who needs over 80% of equity with a signed sales contract already	A homeowner with 20%+ equity who can skip the fee	A homeowner in a slower market who can accept losing the house

Cost and requirement comparison for a $200,000 bridge-vs-HELOC decision over a 90-day hold, based on October 2026 rates.

When a HELOC is the cheaper way to buy before you sell

Three situations favor the HELOC:

A short hold, under roughly six to eight months, since the bridge loan’s fixed $3,000 fee has no rate advantage to earn it back; this program is actually priced higher than the HELOC, not lower.
Your equity already clears the HELOC’s 80% CLTV cap: if $200,000 covers what you need, there is no reason to pay bridge pricing or a fee for a credit line you can already get elsewhere.
You want to draw in stages: a HELOC is revolving, so you only pay interest on what you actually use, while a bridge loan typically funds as a single lump sum at closing.

The bridge loan pulls ahead on leverage, not price. Its 89.99% LTV under contract exceeds the 80% CLTV HELOC cap, so a homeowner needing more than 80% equity, with a signed sales contract in hand, may have no HELOC-sized option. Run the numbers on the HELOC vs cash-out refinance calculator.

When a contingent offer beats both

A contingent offer, where your purchase depends on selling the old home first, carries no financing cost: no origination fee, no rate premium, no bridge payment on your DTI. The tradeoff is risk, not dollars. A seller can accept, reject, or counter it, and against a non-contingent buyer in the same bidding pool, the contingency itself is what loses the house.

There is no reliable data on how often sellers reject a contingent offer, so treat any precise percentage elsewhere with suspicion. The established mechanic: sellers favor the certainty and speed of a buyer who has already solved their financing, and the contingency itself becomes a weakness even at a competitive price.

The contingent offer fits a slower market, with fewer competing bids and more patience for a sale-contingent buyer. It is the wrong call in a hot market, where a buyer already carrying a bridge loan’s or HELOC’s payment arrives with financing resolved, a real edge over one still waiting on someone else to accept an offer on their old home too. See how a HELOC balance affects a mortgage application’s debt-to-income ratio for how that underwriting math works.

Disclaimer: This article is for informational purposes only and is not financial, legal, or tax advice. Programs, rates, and eligibility rules change frequently. Consult a licensed professional or the relevant government agency for guidance specific to your situation.

Frequently asked questions

What is a bridge loan used to buy a home before selling the current one? A bridge loan is a short-term loan secured against your current home’s equity that gives you cash for a down payment on a new home before your old one sells. It is typically interest-only and repaid in full once the old home closes. Lenders price it off an index like the prime rate, not standard mortgage pricing.

How much equity do I need in my current home to get a bridge loan? Florida Capital Bank’s own program caps bridge loans at 80% of your home’s value while it is listed, meaning you need at least 20% equity remaining. That cap rises to 89.99% once you have a signed sales contract, since the lender’s risk drops once a sale is locked in.

Is a bridge loan’s interest rate always 2 to 4 percentage points higher than a mortgage? No. That range is commonly quoted but not universal. Florida Capital Bank prices its bridge loan at prime plus 1%, about 8.00% as of October 2026, only 0.60 percentage points above Freddie Mac’s 7.40% conventional average. Ask any specific lender for its actual spread before assuming the higher end applies to you.

Does a bridge loan payment count against me when I apply for the new mortgage? Usually yes. Fannie Mae’s Selling Guide requires a bridge loan’s payment to be counted as a contingent liability in your debt-to-income ratio on the new mortgage application. The requirement is waived only if you already have a fully executed sales contract on your current home with financing contingencies cleared.

When is a HELOC cheaper than a bridge loan? A HELOC is usually cheaper on a short hold, typically under six to eight months, because it carries no origination fee while a bridge loan’s 1% to 2% fee is fixed no matter how fast your old home sells. In a worked $200,000, 90-day example, the HELOC cost $3,615 against $6,945 for the bridge loan.