Glossary · Real estate finance
Bridge Loans: Definition, Costs and Property Applications
A bridge loan bridges the time until a clearly defined event – sale, refinancing or bank payout – and makes transactions under time pressure possible in the first place.
Last updated: 18 July 2026 · Reviewed by Jürgen Kronawitter
When is a bridge loan used?
- Purchase under time pressure: Off-market opportunities or notary appointments that do not allow weeks of bank checks.
- Bridging up to bank payout: the long-term financing is promised, but not yet evaluated.
- Capital release: activate bound equity from an existing property at short notice for the next purchase.
- Exit bridging: a completed project is on sale, the previous project financing expires.
Conditions, collateral and return
Bridge loans are usually structured as final: During the term, only interest accrues, the repayment is made from the follow-up event. The collateral shall be collateralised by a Land charge – first or secondary depending on the structure. Decisive for the condition are loan-to-value ratio ()LTV), quality of the property and above all the plausibility of the repayment: A bridge loan without a resilient exit is not a bridge, but a risk.
The interest rates are well above classic banking conditions – but checking and payout are much faster, often within a few weeks. Serious conditions can only be classified after examination of property, collateral and exit.
Bridge Loan, bridge finance, interim finance – the terms
Describe the content Bridge finance and Bridge Loan the same instrument; ‘Bridge Loan’ is the term common in the institutional environment that Interim finance The classic German generic term. We structure bridge loans from €750,000 to €180 million via banks, debt funds and family offices – details on the service pages Bridge Loan for Real Estate and Bridge finance.
Frequently asked questions
Bridge loans: quick answers
How Long Does a Bridge Loan Run?
Usual are 3 up to 24 months, partly with extension option. The term is based on the follow-up event – such as the planned sale or the payment of the long-term financing.
How much does a Bridge Loan cost?
Significantly more than a classic bank loan: depending on the risk, rank and LTV, market-standard are high single-digit to double-digit annual interest rates plus structuring fees. Concrete conditions only result from the examination of property, collateral and exit.
When Does a Bridge Loan Make Sense More Than a Bank Loan?
If speed decides on the deal or the bank financing is not yet in time. The additional price of the Bridge Loan is then the price for transaction security – and often cheaper than a lost purchase.
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About the author
Jürgen Kronawitter
Jürgen Kronawitter specialises in structured real estate finance. He helps property investors, developers and portfolio owners implement complex financing solutions. His work focuses on structuring and arranging senior loans, whole loans, mezzanine capital and bridge loans, as well as tailored financing for acquisitions, investment properties, developments and refinancing.