Fix-and-flip investors often face a timing problem: the right property is available now, but conventional financing takes 30 to 45 days to close. Bridge loans solve that gap. A bridge loan is a short-term, asset-backed loan designed to carry an investor from acquisition through renovation and into either a sale or a refinance. Understanding how these loans are structured, what they cost, and where they fit in a deal stack helps investors use them effectively rather than reflexively.
How Bridge Loans Work for Fix and Flip
A bridge loan provides short-term financing, typically 6 to 24 months, secured by the subject property. Lenders underwrite primarily on the asset rather than the borrower's income, which is why closings can happen in 7 to 14 business days rather than the weeks required for agency loans.
For fix-and-flip use, the loan covers two components:
- Purchase price: Most bridge lenders advance 70 to 80 percent of the as-is value or the purchase price, whichever is lower.
- Renovation budget: Many lenders also provide a rehab holdback, releasing funds in draws as work is completed and verified.
Loan-to-value (LTV) limits vary, but a common ceiling is 75 percent of after-repair value (ARV), the estimated market value once renovations are complete. If a property will be worth $400,000 fixed up, a lender offering 75 percent ARV would advance up to $300,000 across purchase and rehab.
Repayment is typically interest-only during the term, with the principal due in a balloon payment at sale or refinance.
Current Rate and Fee Ranges
Bridge loan pricing is materially higher than conventional mortgage rates because lenders are taking on shorter-duration, higher-risk exposure. As of mid-2025, most bridge loans for residential fix-and-flip carry:
