Buy your next home before you sell
Found your next home before selling your current one? A bridging loan may help you make the move. Start with the simple explanation below, then explore the numbers, repayments, timing and costs.
Talk through your move with Liran
In a 20-minute chat, we can talk about your plans, timing and next steps. You do not need to have everything worked out.
What is a bridging loan?
Temporary finance that may help you buy your next home before your current home sells.
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Own both homes
Current home andNew home Peak debt
The highest expected total owed while bridging, including interest and costs added to the loans where applicable.
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Sell your current home
Sale completed Money from the sale
MinusSelling costs
and other payments dueEqualsMoney left from the sale
ThenPay down your home loans
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Keep your new home
New home End debt
The amount still owed after sale money pays down your home loans.
Any remaining approved home loan continues.
The lender confirms the loan structure, repayments, interest and sale deadline. Approval is subject to assessment.
Estimate your peak debt
Add up what you need to borrow, including any interest added to the loans.
Include each cost only once. This is a planning estimate. Your lender will confirm its calculation and any interest allowance.
How the interest may be handled
Some lenders require monthly interest payments. Others allow interest to be added to your loan balance, called capitalised interest. Your debt then grows and you may pay interest on that interest.
What to ask about interest and timing
The lender may allow for estimated interest within your borrowing limit. Ask how interest is charged and what changes if your property settles earlier. An unused interest allowance is not a guaranteed cash refund. Repayment arrangements and available terms vary by lender.
Why people consider bridging finance
A bridge can make a move more practical, but convenience should be weighed against the cost and risk of holding two properties.
Buy when the right home appears
You may not need to wait for your current property to settle first.
Reduce settlement pressure
You may have more flexibility when preparing and selling the existing property.
Make the move easier
Access to the next home first can provide time for moving or minor work.
Interest can accumulate
Capitalised interest increases the balance while the property remains unsold.
The sale price matters
A lower sale price leaves less money to repay the bridging debt. You may need extra cash or lender approval for a revised loan. Do not assume the shortfall can automatically be added to your ongoing mortgage.
The timeframe matters
Your sale needs to settle within the approved timeframe. An extension is not guaranteed. Missing the deadline may lead to extra costs or further action under your loan terms.
Test the plan before you commit
I can help estimate your peak debt, costs and end debt, then compare bridging with alternatives such as selling first or arranging a longer settlement.
We can also check what happens if the sale takes longer or the price is lower than expected.
Choose an appointment timeCalendar opens through Mortgage Matrix.
Bridging loan questions
Do I pay the bridging interest upfront?
It depends on the lender and structure. Some lenders calculate an interest allowance for the approved period and capitalise or retain it within the facility. Others require repayments. In every case, the interest remains a cost of borrowing.
What happens if I sell earlier?
Interest is generally based on how long the bridging balance is actually outstanding. If an allowance was included for a longer period, the unused amount may not be required and may reduce the final balance or funds used. The loan terms determine exactly how this is handled.
How long can a bridging loan last?
The maximum term depends on the lender and your approved loan. A longer term is not automatically better because interest may continue to accumulate while the peak debt remains outstanding.
General information only. This page does not take into account your objectives, financial situation or needs. Bridging loan availability, approved terms, interest treatment, fees, valuations, sale requirements and lending criteria vary between lenders. Approval is subject to lender assessment, acceptable security and supporting documents.