A bridging loan is a short-term loan that covers the time between buying a new property and selling your current one.
Helps avoid rushing into a quick sale or moving into temporary housing.
You’re buying a new home but haven’t sold your current one.
You want to secure a new property quickly in a competitive market.
You’re building a new home and still living in your existing one.
You get a temporary loan based on the combined value of both properties.
Usually interest-only, and repaid once your existing home is sold.
There are two types:
Closed bridging loan: You already have a contract to sell.
Open bridging loan: You haven’t sold your home yet.
Pros:
No need to sell in a hurry.
Avoid moving twice or paying rent.
Can buy your ideal home when it becomes available.
Cons:
Higher interest rates or fees.
Risk if your current home takes longer to sell.
You’ll need to show serviceability for both loans.
Equity in your current home
Your ability to repay both loans temporarily
A realistic sale price and timeframe for your existing home
You buy a new home for $900,000 while your current home is on the market for $700,000. The lender gives you a bridging loan covering the purchase, with the expectation you’ll repay it once the $700,000 is received.
Bridging loans can provide peace of mind during a property transition — but they need to be structured carefully. A mortgage broker can help you compare options, assess costs, and ensure you’re not taking on unnecessary risk.
Learn more about bridging loan from NAB.
Book a free chat with Anitha Varghese at Kanova Loans to see if a bridging loan suits your plans »
Disclaimer: This blog is for general information only and doesn’t constitute personal financial advice. Speak to a licensed advisor or broker for guidance specific to your situation.
