Services · Buying
Bridging Loans
You've found the next place but haven't sold the current one yet. A bridging loan lets you buy first and sell after, so you don't miss out or get forced into a rushed sale. It's a short-term arrangement with a few moving parts worth understanding.
Peak debt and end debt
For a while you own both properties, so the lender combines your existing mortgage, the new purchase and the interest that builds up into one figure. That's your peak debt. Once your old home sells, the sale proceeds come off the top and what's left becomes your ongoing loan, the end debt. That end debt is the number that really matters, because it's what you'll be repaying for years.
How repayments work during the bridge
Most bridging loans capitalise the interest, meaning it's added to the balance rather than paid in cash each month while you hold both homes. That keeps your cash flow manageable during the crossover. The bridging period usually runs six to twelve months, which is enough time to sell without panic.
Sell with a realistic number
The whole plan leans on your existing home selling for roughly what you expect. I always run the figures on a conservative sale price, so if the market's quiet your end debt is still comfortable. Hope is not a settlement strategy.
Is bridging the right move
- You've bought, or are about to, and selling first isn't practical.
- You have solid equity in your current home.
- You're confident it'll sell within the bridging window.
- You can handle the end debt repayments once the dust settles.
Bridging isn't the only option. Sometimes a longer settlement or using equity through refinancing works better, and occasionally selling first with a rental in between is the cleaner path. I'll lay out the choices honestly.
Caught between buying and selling?
Let's map your peak debt and end debt before you commit to either side.
Frequently asked questions
How long do I have to sell my old home?
Bridging terms typically run six to twelve months. If your home sells faster, great, you cut the interest. I build in a realistic timeframe based on your area, not a best case.
What happens if my old home sells for less than expected?
Your end debt ends up higher than planned, so I always stress-test on a conservative sale price first. If the gap is too big, we look at other options before you commit.
Do I make repayments on both loans at once?
Usually not in cash. Most bridging loans capitalise the interest during the crossover, adding it to the balance, so you're not funding two full repayments at the same time.
Important information
This information is general in nature and does not take your personal objectives, financial situation, or needs into account. It is not credit assistance or a recommendation to enter into any particular credit contract. Consider whether it is right for you and seek advice before acting. Lending is subject to a lender's eligibility and approval criteria. Terms, conditions, fees, and charges apply.
Greenwood Finance · ABN 23 671 049 693 · Credit Representative No. 551942.
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