Bridging Loans
Buy your next home before selling your current one
A bridging loan lets you purchase a new property while you're still selling your existing home. It bridges the gap between buying and selling, so you don't miss out on your dream home.
The Process
How bridging loans work
Peak debt period
You borrow enough to cover your new purchase while still owning your existing property. This is the maximum loan amount.
Sell your property
List and sell your existing property. The bridging period is typically 6-12 months.
End debt
Once your property sells, the proceeds pay down the loan to your 'end debt' - the ongoing loan for your new home.
Existing Property
$800,000
Value
$300,000
Owing
Peak Debt
$1,100,000
New purchase + existing loan
End Debt
$600,000
After sale proceeds applied
When It Makes Sense
When to consider bridging finance
Found your dream home
When you've found the perfect property but haven't sold your current home yet.
Tight settlement timing
When settlement dates don't align - your new purchase settles before your sale.
Avoiding double moves
Move directly from your old home to your new one without renting in between.
Auction purchases
Bid at auction with confidence knowing you have finance arranged.
Costs to Consider
Understand the costs involved
Bridging loans come with additional costs compared to a standard home loan. It's important to factor these in when deciding if bridging is right for you.
Important
The longer your property takes to sell, the more interest you'll pay. Have a realistic timeline and pricing strategy.
Interest during bridging period
Usually capitalised (added to loan) rather than paid monthly. Can add up quickly.
Higher interest rates
Bridging loans often have slightly higher rates than standard home loans.
Setup fees
Application fees, valuation costs, and legal fees for two properties.
Potential extension fees
If your property takes longer to sell, you may need to extend the bridging period.
Common Questions
Things you should know
What if my property doesn't sell?
Lenders typically allow 6-12 months. If you can't sell in time, you may need to reduce the price, extend the loan (fees apply), or in worst case, potentially sell your new property. We'll ensure you have a realistic plan.
How much can I borrow?
Peak debt is typically calculated as: new purchase price + existing loan balance + costs. Your end debt must be serviceable based on your income. We'll model different scenarios with you.
Do I need a deposit?
Equity from your existing property typically acts as your deposit. If you have sufficient equity, you may not need additional cash for the new purchase.
Sell first or buy first?
Selling first removes the risk but means renting temporarily. Buying first (with bridging) lets you move once but carries the risk of overlapping ownership. We can discuss what suits your situation.
Alternatives
Other options to consider
Bridging isn't always the best solution. Here are some alternatives we can discuss based on your situation.
Subject to sale
Make your offer conditional on selling your existing property. Less risky but may be less attractive to sellers.
Extended settlement
Negotiate a longer settlement period on your purchase to give time to sell your current home.
Simultaneous settlement
Coordinate both transactions to settle on the same day. Requires careful timing and coordination.
Rent first
Sell your property, rent temporarily, then buy. Eliminates bridging risk but involves two moves.
Expert Guidance
Bridging loan specialists
Bridging loans require careful planning. We'll help you understand the true costs, manage the risks, and find the right lender for your situation.
- Calculate your peak and end debt scenarios
- Compare bridging products from multiple lenders
- Help you develop a realistic sale timeline
- Explore alternatives if bridging isn't ideal
- Manage the process from application to settlement
Example bridging scenario
Need bridging finance?
Let's discuss if bridging is right for you
Book a free consultation and we'll assess your situation and options.