Bridge Loan Rates: Current 2024 Interest Rates

Many investors use bridge loans to get the funding they need quickly. As short-term loans, these instruments often have higher than average interest rates compared to “traditional” loans to protect lenders. Those interest rates can impact whether bridge loans are wise options for your financial goals.

Today, let’s look at current bridge loan interest rates and explore how they’ve evolved.

What Are Bridge Loans?

In real estate investing, Bridge loans are short-term loans meant to “bridge the gap” for investors seeking more permanent financial stability or longer-term loans. They’re available only if you have a strong financial profile and have a solid exit plan. Additionally, the lender must believe you can make consistent monthly interest payments.

For example, say that you want to secure a long-term loan for a prime piece of property in the South Florida real estate market. However, it will take six months or so for your long-term loan to be ready due to underwriting, investigations, etc. But the new house you want to purchase will likely be taken off the market in three months, so you need funding now.

A bridge loan could be the perfect solution. With a short-term bridge loan, you can get the funding you need to purchase the new property. Then, you’ll pay back the bridge loan once you acquire your long-term financing with better interest rates and other conditions.

Bridge loans can be highly effective and valuable financial tools, provided you use them strategically and wisely. They’re great for investors seeking a new property or refinance their current one. Some current homeowners might want to tap into their equity as well. 

Whether you’re looking for help with a new mortgage or seeking help refinancing a current mortgage, it’s best to analyze all your funding options. For instance, you’ll want to consider hard money loans and home equity loans/home equity lines of credit. Additionally, you need to understand how bridge loan work and the rates involved. 

What Are Bridge Loan Rates Right Now?

Generally, bridge loans have higher interest rates compared to longer-term, traditional loans because bridge lenders take on additional risk. Bridge loan rates can impact whether a given loan is a suitable choice for your financial situation. For instance, if a bridge loan’s interest rates are too high for you to make regular mortgage payments until your other financing comes through, you shouldn’t sign on the dotted line.

At the time of this writing, bridge loan rates are between 9.5% and 12%, depending on attributes like asset, location, and loan terms. On average, bridge loans for vacant land parcels tend to be on the higher side of the range, closer to 12%. Additionally, the higher the loan-to-value, the higher the interest rate. 

Why? It’s riskier for lenders to provide loans for undeveloped land parcels. That land doesn’t produce any income, as opposed to land parcels with property or buildings on them. As a result, you’ll pay less interest for a bridge loan for a developed piece of land or a piece of real estate instead. Keep this in mind as you seek out the ideal bridge loan solution.

In the world of mortgage loans, there are also extra stipulations in certain scenarios. Let’s consider this one: 

Say that you have a good debt-to-income ratio (DTI) or an impressive history of commercial real estate investments. In that case, you could get a bridge loan at better rates than conventional loans from banks, credit unions, and other sources. However, when it comes to bridge financing, high interest rates are the norm.

What Were Bridge Loan Rates in the Past?

Bridge loans haven’t been this high forever. In fact, bridge loans only recently increased to their current range.

Around Q1 of 2022, bridge loan rates were only between 7% and 9% on average. As you can see from the below image, this made acquiring and fulfilling bridge loan requirements much easier for investors.

The below image also indicates that, as LIBOR started increasing at a fast pace, bridge loan rates also increased significantly throughout Q3 and Q4 of 2022. This came as a surprise to those seeking their first mortgages and people making interest-only payments to their money lender.


Below, we’ll explore why the increase in LIBOR rates had a similar effect on bridge loan interest rates across the board.

Factors Affecting Bridge Loan Rates in Florida

The recent interest rate increase for bridge loans in Florida is due to three primary factors:

  • First, the Fed increased interest rates, and LIBOR/SOFR rates increased accordingly.
  • Second, many fixed-income instruments began to yield higher returns. This led private financing investors to expect higher returns on their investments, as well.
  • Third, the cost of capital for lenders increased, which led to many lenders having to boost their interest rates to compensate. Note that this also affects traditional loans, not only short-term financing.

Let’s take a closer look at each of these factors one by one.

LIBOR/SOFR Rate Increases

LIBOR stands for the London Inter-Bank Offered Rate. In a nutshell, this is an average interest rate calculated from estimates that are submitted by the leading banks of London. Think of it as a good average interest rate for the collective banks operating out of London; it’s a solid temperature test for interest rates in the UK.

SOFR, meanwhile, is the Secured Overnight Financing Rate. This is another popular benchmark interest rate, and it’s currently set to replace the LIBOR in a gradual process. In the years to come, this will improve long-term liquidity, although it will also lead to short-term trading volatility with certain derivatives.

Regardless, the Fed's recent interest rates hike to combat inflation has had a ripple effect throughout the worldwide economy. LIBOR/SOFR has increased in response to the interest rate increases in America. Since bridge loan rates are closely tied to LIBOR/SOFR rates, their rate increases are also not surprising.

High Fixed-Income Instrument Returns

Over the last year, investors putting their money into fixed-income instruments like bonds have seen much greater returns. This is due to a combination of factors, including inflation and economic speculation.

This affects bridge loan rates because those investors now expect greater returns for their money. To acquire those greater returns, they've increased bridge loan rates to compensate.

Cost of Capital Increases

Lastly, lenders now have greater capital costs to pay. With more costs to pay, those lenders have shifted the burden of those payments onto their borrowers in the form of higher interest rates. It's almost always easier to make additional money through lending by increasing interest rates as opposed to pursuing greater profits elsewhere, such as through higher down payments or additional fees.

Once again, capital costs have increased because of the Fed’s recent hike. In some sense, you can say that the current higher-than-average bridge loan rates are, overall, thanks to the Fed rate increase.

Tips for Securing Favorable Bridge Loan Rates in Florida

Bridge loan rates are higher than usual in the Florida investment market. But that doesn't mean you can't get favorable rates if you practice strategic searching.

For example, you can and should research local bridge lenders. Local lenders oftentimes see value in local real estate markets better than national lenders. As a result, if you approach them with a smart business proposition or investment opportunity, they might offer you better rates and terms if your collateral makes sense.

Next, consider cross collateralization using a blanket loan. Blanket loans allow you to qualify for larger cash amounts or enable you to use your portfolio’s equity (like a current home) to fund a new, highly profitable acquisition. 

Of course, don't forget to consider variable interest rates. These may provide you with low intro rates. If you pay off your bridge loan faster than expected (assuming your contract allows it), you could even escape higher possible rates later during your loan’s term.

Lastly, don’t forget to always have a solid exit strategy in place. Since all bridge loans are short-term, you need to know how you’ll repay the loan before getting approved for it.

How To Get a Private Loan

With interest rates higher than ever, you need to know how to get an excellent private loan for your financial goals. The best way to do that is:

  • First, reach out to local private lenders. Do a lot of research and ask plenty of questions upfront. This is the best way to determine whether a given lender is right for your needs and your budget limitations. Learn everything you can about their offerings before moving on to the next step.
  • Next, submit a loan request to the private lender of your choosing. If your loan application is approved, you’ll receive a term sheet. The term sheet will break down everything you need to know about the loan and the loan’s term, cash needed to close, your regular repayments, the interest rates, etc.
  • If everything looks agreeable, sign the term sheet and submit your security deposit. Before doing this, it could be wise to contact a financial expert or real estate attorney to review the term sheet on your behalf.
  • Then work with the lender’s processing team to submit documents and schedule an appraisal.
  • Schedule the closing and get funded for your business activities to wrap everything up.


Teaming up with the right private lender that understands your needs is essential to executing your investment strategy. This is where the knowledgeable private loan experts at Vaster come in. 

Our loan officers can help you structure a private loan solution that caters to your goals and exit strategy. Reach out today to get started with a no-obligation quick quote.


What Is a Bridge Loan and How Does It Work, With Example | Investopedia

Effective Federal Funds Rate | New York Fed

Secured Overnight Financing Rate (SOFR) Definition and History | Investopedia

Is A Bridge Loan Right For You? | Forbes Advisor


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