The numbers are consequential. SOFR, the benchmark for most floating-rate bridge loans, was 3.90% on October 22, 2026. Lenders add a spread that varies by deal, borrower and leverage. Lenders also commonly charge origination points, and some charge exit fees. Terms often run 12 to 36 months. Many value-add deals use 18 to 24 months. Terms vary by lender. The math below uses assumed rates and 2 points. These are illustrations, not quotes.
Illustrative example. At an assumed 10% rate, a $10M loan costs about $83,333 a month. Over 18 months that is $1.5M in carry, before any renovation spending.
Current Bridge Loan Rate Backdrop (October 2026)
Three forces set bridge rates. First, the Fed raised its target range 25 basis points to 3.75% to 4.00% on September 17, 2026. Second, SOFR tracks the fed funds rate and was 3.90% on October 22, 2026. Third, lender spreads depend on supply and demand in the bridge market.
Spreads differ by asset quality, leverage and renovation scope. Heavier renovation and higher leverage often cost more. Institutional lenders may also compete for strong deals, but this varies by lender and deal. Get quotes from several lenders.
Origination points are common, and some lenders charge exit fees at payoff. Amounts vary by lender. Together these fees add cost that belongs in the pro forma alongside the interest rate.
How These Rates Affect Cap Rate Spread in North Fulton
Deal viability depends on three numbers: the going-in cap rate, the all-in cost of debt and the projected exit cap rate. In a value-add deal the going-in cap rate is often below the cost of debt. The property then does not cover interest from day one. The business plan must create enough value during the bridge period to repay the debt and the carry.
The margin for error is thinner at higher bridge rates. At lower rates, a deal can absorb modest renovation overruns or occupancy delays. At higher rates, each month of delay costs more. Test your pro forma at several rates.
Stabilized cap rates differ by asset class and submarket. Check recent comparable sales and broker opinions for your asset. The exit cap rate beats the bridge rate only when the plan lifts NOI enough to repay the bridge debt and all carry costs.
Rate Impact at $10M Loan: Scenario Comparison
Illustrative example, not a quote. The rates below are assumed scenarios.
| Metric | 8% Rate | 11% Rate | 14% Rate |
|---|---|---|---|
| Monthly Interest ($10M loan) | $66,667 | $91,667 | $116,667 |
| Annual Carry Cost | $800,000 | $1,100,000 | $1,400,000 |
| 18-Month Total Interest | $1,200,000 | $1,650,000 | $2,100,000 |
| 2 Points Upfront (on $10M) | $200,000 | $200,000 | $200,000 |
| Total 18-Month Cost | $1,400,000 | $1,850,000 | $2,300,000 |
| Additional Cost vs. 8% | n/a | +$450,000 | +$900,000 |
Modeling Rate Impact on a Value-Add Deal
Illustrative example, not a quote. Assume a 48-unit multifamily property bought at $10.5M. Assume $3M of renovation, including a 15% contingency. Total project cost is $13.5M. The operator takes a $9.75M bridge loan and contributes $3.75M in equity. Renovation and lease-up take 20 months. A sale follows about 4 months later, for a term of roughly 24 months.
At an assumed 9.5% rate, monthly interest on $9.75M is $77,188. Over 24 months, interest is $1,852,500. Two origination points cost $195,000. Total carry is $2,047,500. Add that to the $13.5M project cost and the break-even sale price is about $15.55M. That is before NOI collected during the hold and selling costs. At a 5.5% exit cap rate, it needs stabilized NOI of about $855,000.
At an assumed 12.5% rate, monthly interest rises to $101,563. Over 24 months, interest is $2,437,500. The same 2 points cost $195,000. Total carry is $2,632,500, so break-even rises to about $16.13M. At a 5.5% exit cap rate, that needs NOI of about $887,000. A 3-point rate difference adds $585,000 in interest over the hold.
Capital Stack Adjustments That Preserve Deal Feasibility
When bridge costs squeeze feasibility, experienced North Fulton operators often adjust the capital stack rather than walk away. The main levers are higher LTV underwriting, mezzanine or preferred equity, a lower purchase price and a shorter hold. Higher LTV needs a stronger value-add thesis and lender relationship. Mezzanine or preferred equity can fill the gap and reduce equity. A lower price improves interest coverage. A shorter hold cuts total carry.
The capital stack explanation resource covers each component in detail. For mezzanine financing, which can substitute for some equity, the mezzanine financing guide explains when mezzanine debt can be more efficient than equity, depending on its cost.
The companion analysis on Blackstone and Apollo's entry into bridge financing looks at how institutional competition may affect spreads. For the broader context of North Fulton cap rates that determine exit values, see the Milton cap rate analysis.
Rate Outlook for the Rest of 2026
The Federal Reserve's rate path is the main variable for bridge pricing. The Fed raised its target range to 3.75% to 4.00% on September 17, 2026. The next decision is in late October. Floating bridge rates move with SOFR, so a further hike would raise carry costs.
Tariff policy and inflation can also move rates. This page does not forecast the Fed. Treat any rate path as uncertain and test your deal at several rates.
The practical step for North Fulton operators is to underwrite to today's rates plus a cushion. Do not assume falling rates. A deal that works at a higher rate has room for error. If rates do fall, that is upside and not a requirement.
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Figures labeled as illustrations are examples, not market data. Rates change often. Confirm current terms with a lender.
Last reviewed: October 24, 2026