Bridging Loans
Buy your next property before selling your current one. Our brokers arrange short-term bridging finance so you can move with confidence and avoid the stress of timing your sale and purchase perfectly.
What is a bridging loan?
A bridging loan is a short-term finance facility that lets you buy a new property before you have sold your existing one. The lender advances funds for the new purchase, with the loan typically secured against both your current and new properties. Once your existing home sells, the proceeds repay the bridging portion, and the remaining balance converts to a standard home loan.
Bridging finance gives you the flexibility to buy when the right property comes along, without having to wait for your current home to sell first. This means you can make a strong unconditional offer and avoid the pressure of settlement timing. Our brokers compare bridging facilities across our lender panel to find the most competitive rate and structure for your situation. Use our borrowing power calculator to assess your position.
How bridging finance works
A bridging loan has two phases: the bridging period while you own both properties, and the end loan after your current home sells.
The bridging period
During the bridging period, you own both your current and new property. The lender typically calculates your debt as the combined balance of your existing mortgage plus the new purchase loan. You may pay interest only on the bridging portion, or the interest may be capitalised, meaning it is added to the loan and repaid when your current home sells.
Timeframe to sell
Most lenders provide a bridging period of six to twelve months for you to sell your existing property. Some lenders offer up to 18 months. The timeframe depends on the lender, your equity position and market conditions. Your broker helps you set a realistic sale timeline before you commit to the facility.
End loan
Once your current property sells, the sale proceeds are used to pay down the bridging portion. The remaining balance becomes your end loan, which is a standard home loan on your new property. Your broker can help you refinance this end loan to ensure you are on the most competitive rate going forward.
Managing the risk
The main risk of bridging finance is that your current home does not sell within the bridging period. Your broker will help you assess the local market, set a realistic sale price and timeline, and discuss contingency plans. Having a clear exit strategy before you commit is essential to managing the risk effectively.
Who should consider bridging finance?
Bridging loans suit specific situations. Here is when they make sense and when another option may be better.
Bridging may suit you if
- +You have found your next home and need to act quickly
- +You have substantial equity in your current property
- +Your current home is in a market where properties sell reliably
- +You want to make an unconditional offer on your next purchase
- +You can service the debt during the bridging period
Consider alternatives if
- -Your current home may take a long time to sell
- -You have limited equity in your existing property
- -You are unsure about your next purchase timing
- -You cannot comfortably service both debts simultaneously
- -The local market is slow or declining
How it Works
We want to help you achieve your finance needs and get you in your new home sooner. Here's the process on how we get your loan approved quickly.
Initial discovery call
Chat with us to discuss your specific financial goals and dreams.
Research, Planning & Comparison
We work hard to present to you the best solution, lender and interest rate based off our initial discovery call.
Submit your application
We will help you complete all the necessary paperwork and requirements with your chosen lender to get your application sorted.
Ongoing Support
We will monitor your application and keep in touch along the way. We work behind the scenes to make sure everything is as smooth for you as possible.
Bridging loan FAQs
Answers to the questions we are asked most often about bridging finance.
What is a bridging loan and how does it work?
A bridging loan is a short-term finance facility that lets you buy a new property before you have sold your existing one. The lender advances funds for the new purchase, with the loan typically secured against both properties. Once your current home sells, the proceeds repay the bridging portion, and the remaining balance converts to a standard home loan.
How long does a bridging loan last?
Most bridging loans run for six to twelve months, giving you time to sell your existing property. Some lenders offer extended terms up to 18 months. During the bridging period, you may pay interest only or have the interest capitalised, meaning it is added to the loan balance rather than paid monthly. Your broker can confirm each lender's available terms.
Do I need equity in my current home to get a bridging loan?
Yes, most lenders require substantial equity in your existing property, typically at least 20 percent. The combined value of both properties and your equity position determines how much you can borrow. Your broker assesses your equity, the expected sale price of your current home, and your capacity to service the debt during the bridging period.
What happens if my current home doesn't sell in time?
If your home has not sold by the end of the bridging term, you may need to refinance into a standard loan, extend the bridging period if the lender allows, or sell at a lower price. This is the main risk of bridging finance. Your broker will help you set a realistic sale timeline and discuss contingency plans before you commit.
Are bridging loan interest rates higher than standard home loans?
Yes, bridging loan interest rates are typically higher than standard home loan rates because the lender is taking on more risk by financing two properties simultaneously. However, the bridging period is short, so the total additional interest cost may be modest. Your broker compares bridging rates across our lender panel and calculates the full cost.
Can I use a bridging loan for an investment property?
Yes, bridging finance can be used for investment property purchases as well as owner-occupied homes. The structure and lender requirements may differ depending on whether the new property is for investment or personal use. Your broker can assess your situation and recommend the most suitable bridging facility for your goals.
Ready to bridge the gap?
Book a free consultation with our expert team today. We'll compare 28+ lenders to find the best bridging facility for your situation.