What happens if my bridge loan matures before I refinance?
If your bridge loan matures before the refinance closes, most lenders will extend it for three to six months at a fee of a quarter to one point, provided the loan is current and the exit is still credible. Ask in writing at least 30 to 60 days before maturity; a loan that passes its maturity date without an extension is in default and can carry a default rate of 3 to 5 points above the note rate.
How extensions work
| Item | Typical terms |
|---|---|
| Extension length | 3 to 6 months per extension |
| Fee | 0.25 to 1 point of the balance |
| Number of extensions | 1 to 2 built into the note; more at the lender's discretion |
| Conditions | Loan current, taxes and insurance paid, exit still supported, sometimes a new valuation |
| Rate during extension | Usually the same, sometimes a small increase |
Ranges vary by lender. Many notes include the extension options up front; read the section before you sign so you know the fee and the conditions.
What to do 60 days before maturity
- Check the refinance timeline. If the permanent loan will not fund by maturity, request the extension now rather than the week before.
- Request it in writing and get the fee and the new maturity date confirmed.
- Bring the file current. Taxes, insurance, and any draw reconciliations.
- Update the exit support. A permanent lender's term sheet or an updated listing plan.
- Confirm the interest reserve. If it is exhausted, arrange to pay the extension period from cash.
What happens if you miss maturity
The loan is in maturity default. Most notes allow a default interest rate, often 3 to 5 points above the note rate, plus late charges and legal fees. The lender can begin foreclosure, although most would rather extend a performing loan than take a property back. Communication before maturity is what keeps you in the first category.
When the exit has failed
If the refinance is not possible because the coverage ratio, credit, or value fell short, the choices are a longer bridge with a different lender at a lower leverage, a sale, or bringing in a partner with cash to pay the loan down to a refinanceable level. A second bridge lender will want to see why the first plan missed and what changed.
Avoiding the problem
Take a term six months longer than the plan, get the permanent loan pre-qualified before the bridge closes, and keep three months of interest in reserve outside the loan. Extensions are cheap compared with default; planning is cheaper than extensions.
How CommFi handles it
If a bridge loan is approaching maturity, our lending desk prices the refinance immediately and funds direct when it fits. When the permanent loan needs a different box or a second bridge is the right move, the desk searches a database of 7,000+ lenders and the ones that fit compete for the file. Zero upfront fees.
Related reading
Related questions
- How much does a bridge loan extension cost?
- Typically a quarter to one point of the balance for a three to six month extension.
- Can a lender refuse to extend a bridge loan?
- Yes, if the loan is not current or the exit is no longer credible. Most lenders extend performing loans.
- What is a default interest rate?
- A higher rate, often 3 to 5 points above the note rate, that applies after a default such as passing the maturity date without an extension.
- When should I ask for an extension?
- In writing, 30 to 60 days before maturity, with updated exit support.
- What if I cannot refinance at all?
- Options are a second bridge loan at lower leverage, a sale, or a partner who brings cash to pay the balance down.
Property developer and licensed appraiser. 22+ years in real estate: TIC conversions, multi-unit redevelopments, mixed-use, fix and flips, commercial DSCR.