Sometimes the timing doesn't line up. A bridging loan covers the gap — but it's important to understand the costs and the timeline.
You've found the property you want to buy, but you haven't sold your current home yet. The timing doesn't line up — which is more common than people think. A bridging loan covers the financial gap between buying one property and selling the other.
During the bridging period — usually up to six months — the loan is secured against both properties. Your repayments may be interest-only or capitalised (added to the loan balance). Once your existing property sells, the bridging portion is paid off and you move onto a standard home loan for the remainder.
Bridging finance costs more than a standard loan — the rates are higher and you're effectively carrying two properties at once. Timing matters. If your property takes longer to sell than expected, the costs go up. A broker models the numbers before you commit so you know your position in the best and worst case.
You buy your new property, and the bridging loan covers both until your existing home sells — usually up to six months. Once the sale goes through, the bridging debt is repaid and you're left with a standard home loan on the new property.
Bridging finance carries higher interest rates than a standard home loan — you're effectively carrying two properties at once, and lenders price accordingly. The longer the bridging period, the more it costs. Understanding the full cost upfront is essential before committing.
The bridging loan is repaid when your existing property sells. The exit strategy — realistic sale timeline, expected price, worst-case scenario — should be mapped out before you start. A broker models this so you can make the decision with clear numbers.
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Most bridging loans run for up to six months, though some lenders allow up to twelve. The loan is specifically designed to be short-term — it's repaid when your existing property sells. The term is set based on a realistic estimate of your sale timeline, not just the optimistic one. The longer it runs, the more it costs, so getting that estimate right matters.
This is the main risk of bridging finance. If your property takes longer to sell than expected, you face higher interest costs and may need to renegotiate the bridging period — which not all lenders will do easily. That's why the upfront planning matters: a broker models the worst-case scenario before you commit, so you know exactly what you're taking on if things don't go to plan.
Bridging loans typically carry higher interest rates than standard home loans — often 1–2% more — plus potential fees. Because you're carrying both properties, the total loan balance during the bridging period is larger, which amplifies the cost. For a short period, this can be manageable. For a longer period, it adds up. A broker will give you a full cost breakdown before you commit.
Sometimes. If you can negotiate a simultaneous settlement — selling and buying on the same day — you avoid the bridging period entirely. It requires careful coordination with both transactions and isn't always possible, but it's worth exploring. Some buyers also choose to sell first and rent temporarily while they search, which removes the financial risk but adds logistical complexity. A broker can help you map out which approach makes most sense.
No commitment, no paperwork. Just a conversation about where you're at and what your options look like.