Bridging finance can let you secure your next home without waiting for your current one to sell. Sometimes it’s hard to get settlement dates to align, so we go through this option with you.
A short-term loan that is available between selling and buying.
Bridging finance is a short-term home loan used when you buy your next property before money from your current property sale is available.
For that overlap, you carry your current mortgage and the lending needed to buy the new home. The sale proceeds then repay the initial mortgage and reduce the total lending to the amount you’ll keep on your new property.
The calculation has two stages: peak debt and end debt.
Peak debt is the highest amount owing while you own both properties. It usually includes your current mortgage, the lending needed for the new purchase and any approved costs added to the loan.
The lender tests if you can make repayments on this amount during the bridging period.
End debt is the mortgage expected to remain after the initial home sells.
Net proceeds is the expected sale price minus the existing mortgage, agent commission, legal fees and other sale costs. A lender may use a lower figure for the sale price than the appraisal to leave room for a potential lower sale price.
Want a quick assessment?Call Sarah on 022 305 5696 or send your details through. We'll calculate the peak debt and end debt before you make an offer.
The answer depends on the sale of your current home.
Closed bridging applies when your current home has an unconditional sale and your next purchase is also unconditional, but the settlement dates do not match. The lender knows when the sale money will arrive and how much is due. That certainty usually makes closed bridging easier to assess. The bridge may last a few days or weeks, although lender terms can run longer if the settlement gap requires it.
Open bridging applies when you want to settle the next home before your current property has an unconditional buyer. The sale date and final sale price remain unknown. The lender carries greater risk, so may require a larger amount of savings showing you can afford to service both mortgages for a longer period of time.
The lender looks at both properties, the temporary loan amount you need and the ending loan amount you will be left with. They may ask for:
The repayment method depends on the lender and the way your existing mortgage is arranged.
Common options include:
Interest-only lowers the payment during the overlap because no principal is repaid. It does not lower the interest charged.
A small delay can be manageable. Several unsold months can become expensive.
The interest bill depends on the amount borrowed, the bridging rate and the number of days before your property settles. Costs may include:
The lender may quote interest daily, then charge it monthly or add it to the debt. Ask for the dollar cost at several sale dates as well as the annual rate.
Price the bridge properly.Call Sarah on 022 305 5696 or send your details through. We'll price the bridge at your expected sale date and again at a later one.
Only with closed bridging finance. Open bridging cannot be used to bid at auction.
A winning auction bid is unconditional, so the lender needs certainty about the sale of your current home. Bridging finance can support an auction purchase only as closed bridging, where your current home already has an unconditional sale and it is just the settlement dates that differ. The lender will still need to approve the property you are bidding on, along with current figures for your home, your mortgage and the expected sale costs.
Your lawyer should check the auction agreement and title. Arrange the building inspection and any other property checks before auction day.
Set your bid limit from the lender-approved purchase amount. A higher bid increases the peak debt dollar for dollar and can put the end mortgage outside the amount already assessed.
Sometimes. A security swap may let you move an existing loan to the new property.
A security swap, also called a substitution of security, may let you move an existing loan from your current property to the new one. This can keep a fixed rate and avoid an early repayment cost. The timing needs to line up, and the lender must approve the new property and total lending.
A security swap is not automatic. A lender may require same-day settlements or a short bridge, and legal instructions need to be exact.
Before breaking any fixed loan, we ask the bank for a written break-cost quote. We then compare that cost with keeping the loan, transferring it or moving all lending to another lender.
Bridging finance is one way to fix settlement timing. It is not the only one.
You could:
A sale condition gives you protection, but the seller may prefer a cleaner offer. A same-day settlement avoids bridging interest, though the lawyer and lender need both transactions timed carefully.
Keeping the current home is a different decision. The lender treats it as an investment property and assesses rental income, investor equity and the cost of both loans. We go through investment property loans with you before assuming rent makes the numbers work.
We talk people out of bridging finance often. If selling first gives you a safer and cheaper move, we'll say so.
Open bridging may be the wrong fit if the current home is not ready to list, the appraisal rests on an optimistic price or the end debt only works after a top-dollar sale. It can also be too risky when:
Closed bridging is lower risk because the sale price and date are known. It can still fail if the buyer's settlement falls over, so your lawyer should explain the contract position.
Does bridging work for you?Call Sarah on 022 305 5696 or send your details through. We'll tell you if bridging works, needs a wider buffer or should be taken off the table.
We confirm your current mortgage, next purchase budget, sale costs and expected sale proceeds. You see the peak debt and end debt before an application starts.
We test your numbers using a lower sale price and a longer selling period, so you know the end mortgage still works if your home takes longer to sell or sells for less than expected.
We check bank and non-bank criteria for open or closed bridging, interest-only terms, capitalised interest and acceptable equity.
We prepare the application with your sale appraisal, property documents, income evidence and the plan for repaying the bridge, and send it to the lender once you have approved it.
We work with the lender and your lawyer on loan documents, security releases and the movement of sale proceeds. Your lawyer controls the property transactions.
After the first home sells, we confirm the bridge has been reduced correctly. We then arrange the remaining home loan structure around your repayment plan.
Start with the two figures that decide the loan.Call Sarah on 022 305 5696 or send your details through. We'll start with the two figures that decide the loan.
Sarah is super helpful and easy to work with, she actively communicated and answered all of my silly questions quickly. Highly recommend her for first home buyers and buyers in general. Great to work with and very informed!
Sarah was absolutely amazing in guiding us through the process as first home buyers. She truly went above and beyond, taking the time to answer all of our (sometimes silly!) questions and making sure we felt supported every step of the way. She was always available to help, even on weekends, whether by call or text, which made such a stressful process feel so much easier. We would highly recommend Sarah and couldn’t have asked for a better experience.
Sarah been amazing to deal with! She has helped my partner and I get into our first home. She answered all our thousands of questions! Which really helped us understand the process :) (thanks Sarah!!)
I had the pleasure of working with Sarah as my mortgage advisor for purchasing my first home, and I couldn’t be more grateful for her support throughout the process. From the very beginning, she was extremely helpful and transparent, explaining every detail in a way that made everything clear and easy to understand. I thought it would be a stressful and overwhelming experience but it was smooth and straightforward thanks to her guidance. She made the whole journey feel effortless. I would highly recommend Sarah to anyone looking for a reliable and supportive mortgage advisor.
Sarah has gone above and beyond for us and has been an amazing support while we were buying our first home! She was always available to answer any of our weird and wonderful questions and was super knowledgeable about all aspects of the process. We cannot thank her or recommend her enough! Thanks Sarah :-)
Sarah was awesome to deal with and helped us get into our first home :) She was super flexible with meeting times and uses google meets so that we could take the meeting from anywhere. Sarah is super friendly and no question was a dumb question for her, which made us feel really comfortable. She explained each step of the process really clearly and helped us apply for a home loan with the banks, fix our home loan and will be following us up when its time to re-fix. 10/10!
Open bridging starts before your current property has an unconditional buyer, so the repayment date and sale proceeds remain uncertain. Closed bridging begins after both sales are unconditional and covers a known gap between settlement dates.
It depends. Some banks may approve open bridging for up to six months and closed bridging for up to 12 months. The term is lender-specific, and your approval letter carries the date that counts.
Usually. You may keep paying the current mortgage and pay interest only on the new lending. Some lenders can put a larger portion on interest-only terms or capitalise approved interest, subject to equity and affordability.
It means the lender adds interest to the loan instead of collecting it from you each month. Your debt grows during the bridge, and interest may be charged on the growing balance. The expected sale proceeds must leave enough room for it.
It can be. Bridging commonly uses floating or variable rates, and you are carrying lending over two homes. Valuation, legal, loan and fixed-rate break costs can also apply.
Usually through a real estate appraisal, recent comparable sales and, where required, a registered valuation. The lender may use a lower figure to allow for sale costs, market movement or a quick sale.
Potentially. That is open bridging, and lender rules are tighter because no sale date exists. The lender may require a listing plan, greater equity, a conservative appraisal and proof that you can carry the overlap.
Yes, at Reserve Bank level. Bridging finance is exempt from its LVR and DTI restrictions. Banks still apply their own equity, affordability and credit criteria, so the exemption does not guarantee approval.
Potentially. The lender may release approved funds against your existing equity for the purchase deposit, then provide the remaining money at settlement. Auction deposits and early deposit releases need lender and lawyer approval before you sign.
Potentially. That is no longer a temporary bridge if there is no planned sale. The lender needs to assess permanent lending over both homes, rental income and investor LVR requirements.
It depends. A security swap may move the fixed loan to your new property. If the loan is repaid early instead, a break cost may apply. Ask for a written quote before choosing the structure.
Usually no. In most cases our advice costs you nothing because we're paid by the lender you choose. In a small number of situations a fee applies, and we'll always tell you before any work starts. It's all set out in our Disclosure Statement.
In most cases our advice costs you nothing. We're paid by the lender you choose. In a small number of situations a fee applies, and we'll always tell you before any work starts. We're paid much the same whichever lender you go with, so the recommendation is about the loan, not the commission.
We're available 8am to 8pm, seven days. No obligation, and nothing gets submitted to a lender without your say-so. We'll come back to you the same working day. The first conversation takes 20 minutes, and you'll leave it knowing your number.
This page provides general information only. It isn't personalised financial, legal or property advice. Lending criteria, interest rates and regulations can be updated. Any loan is subject to lender assessment and approval.
