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Bridge Loan Extension Cost Calculator
Extending bridge loans beyond scheduled maturity carries material cost premiums.
Total extension cost
$300,000
Extension fee
$150,000
Rate increase cost
$150,000
How the math works
Fee = balance × ext fee %. Rate cost = balance × rate increase × (months/12). Total = fee + rate cost.
$30M × 0.5% = $150k fee + $30M × 50bps × 1 = $150k rate cost = $300k total extension cost.
How to Use
- Enter loan balance.
- Enter extension fee %.
- Enter rate increase bps.
- Enter extension months.
- Read total extension cost.
Frequently Asked Questions
How do bridge extensions work?
Bridge loans typically have 12-36 month initial term with 1-3 built-in extension options (6-12 months each) requiring (1) payment of extension fee (typically 25-100 bps of loan), (2) sometimes rate increase (25-100 bps), (3) confirmation of sponsor performance (DSCR threshold, property value, covenant compliance), (4) sometimes additional reserves or sponsor equity. Each extension is a negotiated decision.
Extension fee structure?
First extension: 25-50 bps of loan balance. Second extension: 50-100 bps. Third extension: 100-200 bps (if even available). Higher for more aggressive sponsor or weak property. Fee paid at extension; sometimes deferred with rate premium. On $30M loan: 50 bps first extension = $150k. 100 bps second = $300k. Costs add up fast.
Rate increase logic?
Lender charges premium to compensate for (1) extended duration risk, (2) sponsor not executing original plan, (3) replacement capital alternatives. Typical: 25-50 bps for first extension, 50-100 bps for second. Some lenders waive rate increase if sponsor demonstrates strong plan execution. Floating-rate bridges: rate already reflects market moves, so extension fee is primary additional cost.
When does extension make sense?
When projected cost of extension < cost of rapid sale or forced refinance. Extension pays for itself if: (1) property value can appreciate 5-10%+ during extension window, (2) refinance markets likely to improve (rates decline, spreads tighten), (3) value-add plan needs 6-12 more months to stabilize. Doesn't make sense if distress is deepening — at some point, sell or recapitalize rather than extend.
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