The Rate Is Only Part of the Cost
When borrowers ask about bridge loan costs, the first question is almost always about the interest rate. The rate matters, but it is only one line in a longer equation. A complete picture includes points, origination fees, monthly payments, and a handful of standard closing costs. Understanding each piece lets you plan your cash accurately and avoid surprises at the closing table.
The good news is that bridge loans have a simple, predictable fee structure. Unlike conventional mortgage products layered with PMI, escrow impounds, and underwriting surcharges, a private bridge loan has a short list of costs that you can calculate before you apply.
How Bridge Loan Points Work
A "point" is 1% of the loan amount, charged once at closing. Points compensate the lender for originating the loan and are separate from the interest rate. You pay them when the loan funds, and they do not recur.
On North Coast Financial bridge loans, points range from 1.25 to 1.95 depending on loan size, property type, and other factors. Here is what that looks like in dollar terms across common California loan amounts:
| Loan Amount | Points at 1.25 | Points at 1.95 |
|---|---|---|
| $300,000 | $3,750 | $5,850 |
| $500,000 | $6,250 | $9,750 |
| $750,000 | $9,375 | $14,625 |
| $1,000,000 | $12,500 | $19,500 |
| $1,500,000 | $18,750 | $29,250 |
Points are paid from loan proceeds or out of pocket at closing. Many borrowers roll them into the overall cost of the transaction without thinking of them as a separate line item. They are worth tracking, though, because they represent the largest single upfront cost outside of escrow and title.
Monthly Payments: What to Budget
Bridge loans require monthly payments throughout the loan term. The payment amount depends on how much you borrow and the rate you are quoted. At the current rate range of 9.95% to 10.95% (APR 11.40% to 13.22%), here is the monthly payment on common loan amounts:
| Loan Amount | Monthly at 9.95% | Monthly at 10.95% |
|---|---|---|
| $300,000 | ~$2,488 | ~$2,738 |
| $500,000 | ~$4,146 | ~$4,563 |
| $750,000 | ~$6,219 | ~$6,844 |
| $1,000,000 | ~$8,292 | ~$9,125 |
| $1,500,000 | ~$12,438 | ~$13,688 |
Most California bridge loan borrowers carry their loan for 60 to 120 days. Your departing home lists, goes into escrow, and closes. At that point, the sale proceeds retire the bridge loan in full. Budgeting for three to four months of payments is a conservative and sensible baseline.
There are no prepayment penalties. If your home sells in 45 days, you pay off the loan after 45 days and owe nothing more. You only pay for the time you actually use.
Other Closing Costs
Beyond points and the rate, a standard bridge loan transaction includes the same closing costs you would see on any California real estate loan. These are driven primarily by title insurance and escrow, with a few smaller items layered in.
| Cost Item | Typical Range | Notes |
|---|---|---|
| Title Insurance (Lender's) | $1,200–$3,500 | Scales with loan amount |
| Escrow Fee | $1,000–$2,200 | Paid to escrow company |
| Notary / Signing Fee | $150–$300 | Signing agent at closing |
| Recording Fee | $50–$200 | County recorder charges |
| Wire Transfer Fee | $25–$50 | Per wire sent or received |
| Appraisal | $0 | Not ordered or charged |
Title and escrow are the most significant closing costs after points. Both scale somewhat with the loan amount, but neither is a shock figure in California, where borrowers are accustomed to these costs on any real estate transaction.
The notable omission is appraisal. Traditional lenders require a licensed appraiser and charge anywhere from $500 to $1,000 or more. North Coast Financial does not order an appraisal, which removes both the fee and the scheduling delay. This is one reason bridge loans can close in 2 to 2.5 weeks while conventional loans can take 45 to 60 days.
How to Calculate Total Carry Cost
Your total carry cost is the all-in amount you will spend on a bridge loan from the day it funds to the day you pay it off. It combines points, monthly payments for the expected hold period, and closing costs.
The formula is straightforward:
Total Carry Cost = Points + (Monthly Payment x Months Held) + Closing Costs
Run this calculation at your best-case hold (3 months), likely hold (5 months), and worst-case hold (9 months) so you know your range before you commit.
The rate you pay per month does not change, but the number of months matters. A borrower who sells quickly keeps their total interest bill modest. A borrower whose sale drags on pays more. Planning around your local market's average days-on-market gives you the most realistic estimate.
Sample Full Cost Breakdown
Here is a complete cost scenario for a borrower in the Bay Area. The departing home is worth $1,200,000. The existing mortgage is $350,000. The lender advances $430,000 (roughly 65% LTV less the existing mortgage balance).
In this scenario, a borrower who sells in 90 days spends roughly $21,000 to complete a transaction that might otherwise have required contingent financing or a significantly lower offer. In a competitive California market, that premium often pays for itself many times over in purchase price.
A contingent offer on a $1,500,000 home might require coming in $50,000 to $100,000 below asking price to compensate the seller for the risk. A non-contingent bridge-loan offer can close at full price. The carry cost is the fee you pay for certainty.