finance
bridge loan
A bridge loan, also called a swing loan, is short-term financing that lets a buyer purchase a new home before selling their current one. It is usually secured by the existing home and repaid when that home sells. Bridge loans typically carry higher interest rates and fees and short terms, often six months to a year. They can help a buyer avoid making a sale contingency offer.
- Exam tip
- Bridge loans are short-term and close the gap between buying and selling. They are often an alternative to a home-sale contingency.
- Example
- A family finds a new $500,000 home but has not sold their current home. They take a $100,000 bridge loan against the old home for the down payment and repay it when it sells.
Related terms & state variants
Sources
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Last verified: 2026-10-23