| Detail | Explanation |
|---|---|
| Usual index | SOFR, with a floor on the index |
| Paid at closing | Origination points, lender legal, third-party reports, rate cap |
| Paid during the loan | Monthly interest, often interest-only, and extension fees if exercised |
| Paid at payoff | Exit fee if charged, and any unmet minimum interest |
| Best comparison | Total cost over the realistic hold, not the note rate alone |
Where is SOFR today?
Most bridge lenders quote a spread over SOFR, so the SOFR row in the live table below is the starting point for any bridge loan rate. The Treasury rows matter for the exit, because they drive the permanent loan that will refinance the bridge.
| Benchmark | Latest value | As of | A year earlier | What it prices |
|---|---|---|---|---|
| Secured Overnight Financing Rate (SOFR) | 3.85% | September 17, 2026 | 4.38% | Floating-rate bridge, construction, and debt fund loans |
| Bank prime loan rate | 7.00% | September 17, 2026 | 7.25% | Bank construction loans, lines of credit, and SBA 7(a) loans |
| 5-year U.S. Treasury yield | 4.78% | September 17, 2026 | 3.62% | 5-year fixed-rate bank, CMBS, and life company loans |
| 10-year U.S. Treasury yield | 4.94% | September 17, 2026 | 4.06% | 10-year fixed-rate CMBS, agency, and life company loans |
Source: Federal Reserve Bank of St. Louis, FRED. SOFR, DPRIME, DGS5, DGS10
How is a bridge loan rate set?
The note rate is SOFR plus a spread, and SOFR is not allowed to fall below the floor in the loan documents. The spread reflects the business plan, the leverage, the sponsor, the property type, and how clear the exit looks. A light value-add plan on a well-located multifamily property usually prices tighter than a vacant office repositioning.
Interest is typically interest-only and accrues on an actual/360 basis. Many bridge loans also include future funding for renovations or leasing costs. The lender charges interest only on the amount drawn, but points are often charged on the full commitment.
Private and hard money lenders sometimes quote a flat rate with no index. The bridge loan vs hard money loan guide explains how those structures differ.
Bridge note rate = the greater of SOFR or the floor, plus the spread
What fees does a bridge loan charge?
| Cost | What it is | What to check |
|---|---|---|
| Origination points | Fee at closing, quoted as a percent of the loan | Whether it applies to the full commitment or the initial funding |
| Exit fee | Fee at payoff, quoted as a percent of the loan | Whether it is waived if the same lender provides the refinance |
| Extension fee | Fee to extend the maturity, usually in 6 or 12-month steps | Debt yield, coverage, or paydown tests required to qualify |
| Minimum interest | A floor on total interest if the loan pays off early | How many months are guaranteed |
| Rate cap | A hedge the borrower buys so SOFR cannot exceed a strike rate | Strike, term, and whether a replacement cap is required at extension |
| Legal and reports | Lender counsel, appraisal, environmental, property condition | Whether the borrower pays these even if the loan does not close |
Hypothetical total cost of a 24-month, $10,000,000 bridge loan
The numbers below are hypothetical. They use round, labeled assumptions to show how the parts add up and are not a quote or a market range. Assume a fully funded $10,000,000 loan, interest-only for 24 months, at a hypothetical SOFR of 3.50% plus a hypothetical spread of 4.00% over SOFR, a 7.50% note rate with a 3.00% SOFR floor.
Assume 1.00% origination points, a 0.50% exit fee, a $60,000 rate cap with a 5.00% SOFR strike, and $50,000 of lender legal and third-party reports. For simplicity, interest uses a 30/360 count and SOFR stays flat for the full term.
| Cost item | Amount |
|---|---|
| Interest at 7.50% for 24 months | $1,500,000 |
| Origination points at 1.00% | $100,000 |
| Exit fee at 0.50% | $50,000 |
| Rate cap purchase | $60,000 |
| Lender legal and third-party reports | $50,000 |
| Total cost of capital | $1,760,000 |
| Annualized cost on the loan amount | 8.80% |
What changes the total cost?
The same hypothetical loan looks very different under 3 common scenarios. Each changes a single assumption and holds everything else constant.
- Actual/360 interest. Charging 7.50% on a 360-day year for 730 actual days raises interest to $1,520,833
- A 6-month extension. A 0.25% extension fee of $25,000 plus $375,000 of added interest brings total cost to $2,160,000 over 30 months, 8.64% a year
- An early payoff. If the loan pays off at month 9 with 12 months of minimum interest, the borrower pays $750,000 of interest plus $260,000 of fees, $1,010,000 in total, or 13.47% annualized over 9 months
How do the floor and the rate cap affect interest?
A floor limits how much the borrower benefits when SOFR falls. A rate cap limits how much the borrower loses when SOFR rises. The hypothetical table below shows 24 months of interest on the same $10,000,000 loan at 3 flat SOFR levels, with a 3.00% floor, a 4.00% spread, and a cap struck at 5.00%.
When SOFR sits above the strike, the loan still charges the full rate. The cap counterparty pays the borrower the difference, which is why the last column is shown net of cap payments. Details are in the interest rate cap entry.
| SOFR | Index used | Note rate | Interest before cap | Interest net of cap |
|---|---|---|---|---|
| 2.50% | 3.00% floor | 7.00% | $1,400,000 | $1,400,000 |
| 3.50% | 3.50% | 7.50% | $1,500,000 | $1,500,000 |
| 5.50% | 5.50% | 9.50% | $1,900,000 | $1,800,000 |
How to lower the cost of a bridge loan
- Match the initial term to the business plan so an extension stays a backup
- Negotiate exit fee waivers when the same lender or its affiliate provides the permanent loan
- Ask for minimum interest to burn off early if the exit is a sale
- Price the rate cap before the term sheet is signed, since cap cost rises with rate volatility and term
- Bring more equity or a clearer exit, both of which usually narrow the spread
- Run a real refinance test with the DSCR calculator and the debt yield calculator so the exit is sized before closing
Getting a bridge loan quote for your deal
Headline rates on a website say little about what your loan will cost, because points, exit fees, extension tests, and minimum interest vary more between lenders than the spread does. Comparing 3 or more complete term sheets in the same cost model is the reliable way to find the cheapest capital for the plan.
Capital Partners arranges bridge loans from $1M to $100M for acquisitions, lease-up, renovation, and maturity refinances. When you submit a deal, the request is matched to bridge lenders whose criteria fit the property, leverage, and business plan.
Sources
Rate notes from Capital Partners
Leave your email and a principal will send commentary when benchmark rates move enough to change what lenders are quoting.
Common questions
What are bridge loan rates right now?
Bridge loans are priced as a spread over SOFR with a floor, and the spread depends on the property, leverage, sponsor, and exit. The live benchmark table on this page shows current SOFR. A lender sets the spread only after reviewing the deal, so compare full term sheets instead of advertised rates.
How much does a bridge loan cost in total?
Add interest over the expected hold, origination points, any exit fee, rate cap cost, extension fees, and lender legal and report costs. In the hypothetical example on this page, a $10,000,000 loan at 7.50% for 24 months costs $1,760,000 in total, or 8.80% a year.
Are bridge loan points charged on the full loan amount?
Often, yes. Points are usually charged on the total commitment, including future funding that has not been drawn yet. Some lenders charge part of the fee at closing and the rest as future funds are drawn.
Why does paying off a bridge loan early cost more?
Minimum interest provisions and fixed fees get spread over fewer months. The annualized cost of a loan that pays off at month 9 can be far higher than the note rate, as the early payoff example on this page shows.
Do all bridge loans require a rate cap?
Many floating-rate bridge lenders require one, especially on larger loans, but requirements vary. The cap limits the borrower's exposure to a rising SOFR and is usually bought at closing for the initial term.
Send this deal to a principal
Share the basics now. A principal responds within 1 business day, and you can send the full package after the first conversation.