Bridging loan
A bridging loan funds the purchase of a new home before the existing one is sold, with the combined debt carried for a limited period, typically six to twelve months, until the sale clears it.
Bridging loan, explained.
During the bridge the borrower usually pays interest only on the peak debt, or the interest is capitalised. The lender assesses the end debt, the loan left after the sale, and needs confidence in the sale price and timing.
Bridging suits buyers who have found the right property before selling, or who want to avoid renting between homes. The risks are a sale that takes longer or achieves less than expected, both of which increase the interest carried.
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The Learn section is general information about lending in Australia. It does not take account of your objectives, financial situation or needs, is not credit assistance, and is not tax, legal or financial advice. Lender policies, government schedules and regulations change; check the current position with the relevant body or with us before relying on it.
