For many homebuyers in early 2026, timing the sale of your current home with the purchase of a new one remains stressful―even as mortgage rates hover in the mid 6% range and inventory gradually improves. Enter the bridge loan: a short-term financing option that taps into your existing home equity to fund a down payment on your next property, allowing you to move forward without a sale contingency and seize opportunities in a market where quick-acting buyers still hold an edge. The market isn’t in a hot frenzy like 2021, but the need for flexible tools like bridge loans persists for those with solid equity planning a move.

How Bridge Loans Work

Bridge loans are typically six-to-12-month terms, often with interest-only payments while your current home is listed. Lenders usually require at least 20% equity, strong credit, and proof you can handle both mortgages temporarily. Most allow access to 80%-85% of your equity for down payments and closing costs, bridging the gap so you can compete amid forecasts for stronger sales and more listings in 2026.

Plan for Flexibility

Bridge loans aren’t a magic solution―they carry higher interest rates (commonly 9%-12% or more) and fees than traditional options, so pair them with a solid plan to sell within the term. They’re most effective in stable or rising markets; a declining market adds risk. Lenders often extend terms or refinance if needed. A backup strategy keeps your transition smooth.

Know Your Options

Even if a bridge loan isn’t the right fit, understanding alternatives―HELOCs (currently averaging 7.25%-8.22%), piggyback loans, or home equity loans―gives you confidence and flexibility. Buyers who plan ahead, understand their finances, and act strategically will find the best homes without overextending themselves.

Thinking of moving? Let's discuss your equity, timeline, and goals to make your transition smooth and stress-free.