A home mid-transition, which is exactly the position bridging finance is built to fund.

BUY BEFORE YOU SELL

Bridging Loans

Finance that covers the gap between buying the next home and selling the current one. Useful, time-limited, and unforgiving if the sale runs slow.

Work out my bridging position 1300 015 267

Purpose
Cover the gap between two events
Term
Short and defined
Interest
Often capitalised, not paid monthly
Lender panel
40+

Is this you?

If any of these are true, we can help.

Talk it through

Owners who found the next home before the current one sold.
Downsizers who want to move once rather than twice.
Buyers whose settlement dates do not line up by a few weeks.
Owners building a new home while living in the existing one.
Anyone weighing bridging against selling first and renting in between.

How it works

Three moves, in plain words.

Model peak and end debt
Before you bid. We use a conservative sale figure and net proceeds after costs, so the end debt is a number you can live with rather than a hopeful one.
Choose closed or open
If the departing property is under contract, the file is far simpler. If not, we lodge with lenders who genuinely write open bridging.
Valuations on both properties
The lender orders and relies on its own. The departing valuation is the one that decides the plan.

Peak debt, end debt and a conservative sale figure, worked out properly.

Send us the numbers 1300 015 267

What bridging finance does

Bridging finance lets you own two properties at once for a defined period. The lender funds the new purchase while the existing mortgage stays in place, then the sale proceeds of the old property repay most of the combined debt and what remains becomes an ordinary home loan.

It solves a timing problem, not an affordability problem. If the numbers only work on the assumption that the existing property sells quickly and at the top of its range, bridging is the wrong instrument and selling first is the right one.

The detail

Peak debt and end debt

Two terms do all the work in a bridging assessment, and understanding them makes the rest of the product straightforward.

The two numbers that matter
Term	What it is	Why it matters
Peak debt	The existing mortgage, plus the new purchase price, plus duty, costs and capitalised interest	The lender tests peak debt against the combined value of both properties. This sets the LVR ceiling
End debt	Peak debt less the net sale proceeds of the departing property	This is the loan you are left with. Servicing is usually assessed on end debt, not on peak debt
Bridging period	The time allowed to sell, commonly up to six months for an existing property and up to twelve where you are building	Interest accrues across it, and extensions are not automatic
Net sale proceeds	Sale price less agent commission, marketing, legal costs and any adjustments	Always lower than the sale price. Estimate conservatively

What peak debt is actually made of

New purchase price$1,400,000
Existing mortgage$300,000
Duty and costs$77,000
Capitalised interest$23,000

Only the first slice is the property you are buying. The rest is what you already owe plus the cost of transacting, and the last slice is the one that keeps growing for every month the departing home stays on the market.

Illustrative figures only. Not a quote and not an offer of credit.

View as a table

Component	Amount	Share
New purchase price	$1,400,000	78%
Existing mortgage	$300,000	17%
Duty and costs	$77,000	4%
Capitalised interest	$23,000	1%
Total	$1,800,000	100%

Because servicing is generally assessed on end debt, bridging can work for households whose income would never support both mortgages at once. That is the genuine advantage of the structure, and it is also why lenders look so hard at whether the departing property will actually sell.

Worked example · illustrative

Peak debt and end debt, worked through

The situation: A couple own a home valued at around $1.2 million with roughly $300,000 still owing, and buy the next one for about $1.4 million before the current one is on the market.
The move: Peak debt is built from the existing mortgage, the purchase price, duty and costs, and the interest expected to capitalise across the bridging period. It comes to roughly $1.8 million, tested against the combined value of both properties. Servicing is then assessed on the end debt rather than on that figure.
Where it lands: Assuming a conservative sale and net proceeds of about $1.15 million after agent, marketing and legal costs, the end debt lands near $650,000. That is the loan the household carries for the next twenty years, and it is the number the decision should be made on. Every month the sale runs late adds to it.

A composite example, not a specific client. Any figures are indicative and outcomes depend entirely on individual circumstances and lender assessment.

Closed and open bridging

The two forms
	Closed bridging	Open bridging
Position	The existing property is already under an unconditional contract with a settlement date	The property is not yet sold
Lender appetite	Widely available and comparatively straightforward	Narrower. Fewer lenders, tighter LVR, more evidence
Evidence required	The contract of sale	A market appraisal, marketing plan, and often a lower assumed sale figure
Risk to you	Low, provided the buyer settles	Real. If the property does not sell in the period, the debt keeps growing
Typical cost	Lower	Higher, reflecting the uncertainty

Where a sale has fallen over and settlement on the new property is days away, the answer is sometimes not bridging at all. Short-term private funding secured against the departing property can settle faster, at a higher cost, and be repaid on sale. Our private lending and bridging finance pages cover that route.

Capitalised interest

On most bridging loans you do not make repayments during the bridging period. Interest is added to the balance instead, which is why peak debt grows every month the departing property remains unsold.

This is a convenience with a sting. The interest is charged on the whole peak debt, and it compounds. A sale that takes two months longer than planned adds to the end debt you carry for the next twenty years. Lenders build a buffer for this into the assessment, and you should build one into your own thinking.

What every extra month on the market adds to the end debt

Nothing is repaid during the bridging period, so the line only travels one way. A sale that runs three months late is not three months of inconvenience. It is a permanent addition to the loan you carry for the next twenty years.

Illustrative projection only, at an assumed constant rate. Not a quote and not an offer of credit.

View as a table

Month	End debt, by the month the sale settles
0	$650,000
3	$659,000
6	$668,000
9	$677,000
12	$687,000

The defined period a bridging loan runs for, which is the constraint the whole structure turns on. — Nothing is repaid during the bridging period, so the balance only moves in one direction. The clock, not the rate, is what makes this product expensive when a sale runs slow.

What lenders require

Substantial equity in the departing property. Bridging is an equity product before it is an income product.
Peak debt within the lender’s LVR limit across both properties combined.
Servicing demonstrated on the end debt, and on peak debt with some lenders.
A credible sale position: an unconditional contract for closed bridging, or a marketing plan and appraisal for open.
A clear end date. Bridging terms are defined and extensions are assessed, not assumed.
Valuations on both properties, which the lender orders and relies on rather than your estimate.

The risk if the sale runs slow

01Price the departing property to sell, not to test the market. The bridging clock is the real constraint.
02Have the property on the market before or at the same time as the purchase, not afterwards.
03Model the numbers at a sale price below the appraisal, then check whether the end debt is still serviceable.
04Agree with the lender what happens if an extension is needed, before you need one.
05Keep a cash buffer. Two mortgages, duty and moving costs land in the same quarter.

The alternatives worth comparing

Other ways to solve the same problem
Option	When it is better
Sell first, then buy	When the market is slow or your equity position is tight. Renting between is inconvenient and low risk
A long settlement on the purchase	When the seller will accept it. Free, and it removes the need for bridging entirely
A deposit bond or guarantee	When the issue is only the deposit, not the full purchase price
Equity release against the existing property	When you have substantial equity and want the funds in place before you bid
Short-term private funding	When speed is the binding constraint and the cost is worth the certainty
Simultaneous settlement	When both contracts can be aligned to the same day. Cleanest of all, and not always possible

Bridge, and buy first

You move once, and you do not lose the property you want while you wait.
Interest capitalises across the period, so the cost rises with every week the sale takes.
You are selling under a deadline, which is the weakest position to negotiate a price from.
It needs substantial equity. Bridging is an equity product before it is an income product.

Sell first, then buy

You know your exact proceeds before you bid, so the budget is a fact rather than an estimate.
No capitalised interest, no bridging period, and a much simpler application.
A move into rented accommodation, storage, and a second move afterwards.
You carry the risk of the market moving while you are out of it.

How a bridging file runs

01
Model peak and end debt
Before you bid. We use a conservative sale figure and net proceeds after costs, so the end debt is a number you can live with rather than a hopeful one.
02
Choose closed or open
If the departing property is under contract, the file is far simpler. If not, we lodge with lenders who genuinely write open bridging.
03
Valuations on both properties
The lender orders and relies on its own. The departing valuation is the one that decides the plan.
04
Approval and documents
Approval covers peak debt, the bridging period and the end debt structure. Read the end date carefully.
05
Purchase settles
You own both properties. Interest capitalises. The departing property is on the market.
06
Sale settles
Net proceeds repay peak debt down to the end debt, which converts to an ordinary home loan on principal and interest.

Run the numbers

See it with your own figures.

Indicative only. Change anything — the defaults are starting points, not quotes.

Monthly · indicative$4,280.90$891,124 interest over 30 years

The loan

Loan amount

The amount you are borrowing, after any deposit and before fees. The slider covers the common range — type a larger figure straight into the box.

Interest rate

A starting assumption for you to change, not a rate we are quoting and not a lender product. What you are offered depends on the security, the lender and a full credit assessment.

Loan term

Principal and interest across the whole term, with no interest-only period.

Repayment frequency

Worked out on the real period rate and the real number of repayments, so a fortnightly figure is not simply half a monthly one.

Paying it down faster

Extra repayment each month

Optional. Leave it at zero to see the plain schedule. Anything above zero shortens the term and cuts the interest. The slider covers the common range — type a larger figure straight into the box.

Other debts to roll in

Add the cards, loans or tax debt you would fold into this loan and the repayment covers all of it.

Add a debt

Pick the closest type. It only sets the name — you fill in the numbers.

Monthly repayment

$4,280.90

$650,000 over 30 years at 6.90%, principal and interest.

Total repaid

$1,541,124

Of that, interest

$891,124

Where the money goes

Amount borrowed$650,000

Interest over the full term$891,124

A repayment figure is the easy part. Whether a lender will lend it, on what security and at what cost, is the part we handle. Bring the number you have landed on and we will tell you what is realistic.

Talk it through with a broker

The detail behind that number

Number of repayments: 360 monthly repayments
Total repaid: $1,541,124
Total interest: $891,124
Interest as a share of the amount borrowed: 137.1%

Assumptions

The interest rate is a figure you typed. It is not a current rate, a comparison rate, or a lender product we are offering.
The rate is assumed to stay the same for the whole term. Variable rates move, and a single change resets every figure on this page.
Repayments are principal and interest, equal in size, made on time, with no interest-only period, no repayment holiday and no redraw.
Weekly and fortnightly figures are calculated on the true period rate — the annual rate divided by 12 — and on 360 repayments. They are not a monthly figure divided down.
Interest is calculated per repayment period. A lender accruing daily and charging monthly will land on a slightly different number.
Extra repayments are assumed to start with the first repayment and continue every period, and to reduce the balance immediately with no fee and no break cost.
Other debts you add are added to the amount borrowed and repaid at this loan's rate over this loan's term. No fees for closing them out or rolling them in are included, and a debt that is not reducing today is not modelled beyond its balance.
No fees are included: no establishment, valuation, legal, settlement, discharge or ongoing fees, no lender's mortgage insurance and no broker fee.

Open the full calculator

FAQ

Questions people actually ask

If yours is not here, ask it. We would rather answer the awkward one early than have you find out later.

1300 015 267

How long does a bridging loan last?

Commonly up to six months where you are selling an existing property, and up to twelve months where you are building. The period is set at approval and extensions are assessed rather than automatic. Interest capitalises across the whole term.

Do I make repayments during the bridging period?

On most bridging structures, no. Interest is capitalised onto the loan and the balance grows until the departing property sells. Some lenders require interest to be serviced on the end debt portion during the period, so check which structure you are being offered.

What is peak debt?

Your existing mortgage plus the new purchase price plus duty, costs and the interest expected to capitalise. The lender tests it against the combined value of both properties, and it sets the LVR ceiling for the deal.

Can I get bridging finance if my home is not yet sold?

Yes, and it is called open bridging. Fewer lenders write it, the LVR is tighter, and they will want a market appraisal and a marketing plan. Expect the assessment to use a conservative sale figure rather than the number you hope for.

What happens if my property does not sell in time?

Interest continues to capitalise, and the lender can require the property to be sold or the loan repaid. Some will grant an extension where marketing has been genuine and the price is realistic. This is the core risk of the product and it should be planned for before settlement, not after.

Is bridging finance expensive?

It generally prices above a standard home loan, because it is short-term, higher-risk lending. The larger cost is usually the capitalised interest across the period rather than the margin itself. We do not quote rates, and the actual pricing depends on the lender and your circumstances.

Is it better to sell first and rent?

In a slow market, or where your equity is tight, selling first is usually the lower-risk choice. It costs you a move and some rent, and it removes the pressure that makes people accept a lower sale price. Bridging buys convenience, and convenience has a price.

How much equity do I need for bridging?

Bridging is an equity product, so the more you have, the more comfortably it works. Lenders assess peak debt against the combined value of both properties, and the ceilings are conservative. If the departing property has a large mortgage against it, bridging often will not run.

Can I use bridging finance to build a new home?

Yes. Where you are living in the current property while building, lenders commonly allow a longer bridging period, often up to about twelve months, and the construction draws sit inside the structure. It is more complex than a standard bridge and needs the builder documentation a construction loan requires.

Credentials

Credit Representative 554029
ABN 20 672 801 651
FBAA member
AFCA external dispute resolution

Other ways we can help

Reading

Worth understanding first

All of home loans

Where we work

Model the numbers before you bid

Peak debt, end debt and a conservative sale figure, worked out properly. If bridging is the wrong instrument for your position, we will say so.

Or call us

1300 015 267

Monday – Friday, 09:00 to 17:30

Head Broker

Speak to Dave Pham

Call 1300 015 267 Info@WeLnd.com.au