A bridge loan provides short-term financing (6–24 months) to cover the gap between buying a new home and selling an existing one — it's paid off from sale proceeds. A home equity loan (second mortgage) gives you a lump sum against your current home's equity with a fixed rate and 5–30 year term. Bridge loans solve a specific timing problem and are designed to be paid off quickly; home equity loans are longer-term financing for defined needs. Bridge is about timing, equity is about access.
Mortgage lenders and banks
Short-term gap financing — bridge the period between buying a new property and selling your current one.
Pros
Banks, credit unions, and home equity lenders
Fixed lump sum against your home equity — predictable rate and payment for a defined purpose.
Pros
Pick Bridge Loan if: Homeowners who need to close on a new home before selling their existing one, or real estate investors managing a short-term acquisition-to-sale cycle.
Pick Home Equity Loan (Second Mortgage) if: Homeowners who want a lump sum against existing equity for home improvements, debt consolidation, or other defined purposes — not managing a property transition timing gap.
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Purpose and term. A bridge loan is short-term financing (typically 6–12 months) designed to bridge a gap between selling an existing home and closing on a new one. A home equity loan is a longer-term second mortgage (5–30 years) used to access built-up equity for improvements, debt consolidation, or other purposes without selling the home. Bridge loans are temporary and expensive; home equity loans are a stable, lower-cost form of leveraging equity.
Yes — bridge loans typically carry higher interest rates than conventional mortgages (often 1–2% above standard mortgage rates) plus origination fees of 1–3%. Because they are short-term (6–12 months), the total dollar cost is limited, but the annualized cost is high. They also require meaningful home equity in your current property to qualify. Source: CFPB mortgage guidance at consumerfinance.gov.
Both require equity. Bridge loans typically require 20–30%+ equity in your current home. Home equity loans require you to retain at least 15–20% equity after the loan — meaning you can typically borrow up to 80–85% combined loan-to-value. On a home worth $500,000 with a $300,000 first mortgage, you might access $100,000–$125,000 through a home equity loan. Source: CFPB home equity guidance at consumerfinance.gov.
No — they're distinct products. A home equity loan is a lump-sum second mortgage with a fixed rate and fixed repayment schedule. A HELOC (Home Equity Line of Credit) is revolving credit with a variable rate — draw what you need, repay, and draw again during the draw period. Home equity loans are better when you need a defined amount for a specific purpose; HELOCs are better for uncertain or ongoing expenses. Source: CFPB at consumerfinance.gov.
Independent editorial comparison. ClearValue Lending is not the issuer of any product compared here; affiliate links may pay a referral commission at no cost to you — selection is independent of compensation.