Bridging finance

Buy before you sell, with a costed way out

Bridging finance carries two properties for a defined window. It solves a real problem and it exposes you to two loans at once, so the exit has to be planned before the facility starts.

6–12 Months typical bridging term
0.8% Typical premium over a standard variable rate
80% Maximum peak debt against combined security
14 Lenders on panel writing bridging facilities
Who is this for?

When bridging is the right tool

And when a long settlement or a deposit bond would do the same job for less.

01

You found the right property first

The classic case. Your current home has not sold, the new one will not wait, and the alternative is losing it. Bridging buys you the window.

02

Selling into a slow market

If your property may take months, bridging avoids accepting a low offer under time pressure. The interest cost is often less than the discount you would otherwise take.

03

Downsizing

Common for retirees moving to something smaller. Serviceability can be limited, but peak debt is low relative to the combined value, which many lenders will accept.

04

Building while you still own

Carrying an existing mortgage plus a construction facility. Longer and more complex than a standard bridge, and only a handful of lenders will do it.

Your lending options

How a bridge actually works

Peak debt, end debt and the term are the three numbers that matter. Everything else follows from them.

Structure

Peak debt and end debt

Peak debt is both loans combined during the bridge. End debt is what remains after your sale settles — and end debt is what is actually assessed for serviceability.

Structure

Interest capitalised

Most bridges let interest accrue onto the balance rather than requiring monthly payments, so you are not funding two mortgages from cash flow.

Structure

Closed versus open bridge

A closed bridge has an exchanged contract with a settlement date. An open bridge does not, and is priced and assessed considerably more conservatively.

Term

Six to twelve months

Six months is standard for an exchanged sale, twelve where the property is still on market. Extensions are possible and expensive.

Risk

What if it does not sell

Interest keeps capitalising and the lender can require a price reduction. This is the scenario to plan for before you commit, not during.

Exit

Converting to a standard loan

On settlement of the sale, proceeds clear the bridge and the end debt reverts to an ordinary principal and interest loan.

Rates and costs

What a six-month bridge costs

Buying at $1.2m with an existing property worth $900,000 and a $320,000 mortgage remaining on it.

Item Amount Notes Detail
Peak debt $1,520,000 Both loans New purchase plus existing mortgage
End debt $620,000 After sale What is assessed for serviceability
Bridging interest $52,600 6 months Capitalised at approximately 6.9% on peak debt
Application and legals $1,400 One off Higher than a standard purchase
Selling costs $21,000 On sale Agent commission, marketing and conveyancing

Indicative only, as at March 2026, assuming the existing property sells at $900,000 within six months. If it sells for less or takes longer, both interest and end debt increase. Lending criteria, fees and charges apply.

Why Lending Institute?

The risk worth naming

Bridging is the product where a broker earning a commission has the clearest conflict. We price the downside before the upside.

01

We read the credit policy, not the rate sheet

Specialist lending is decided on policy detail — how a lender treats retained profits, whether a corporate trustee is acceptable, what liquidity an SMSF must retain. We track those rules across the panel and check them before we submit.

02

The file is built for the assessor

A complex file presented well is often approved where the same file, submitted raw, is declined. Financials, structure diagrams and a written explanation go in with the application, not after a query.

03

We tell you early when the answer is no

If your file will not place at a sensible rate, you will hear that in the first conversation rather than after three weeks and a credit enquiry. That honesty costs us applications and keeps our approval rate where it is.

04

Accreditation across the specialist panel

SMSF, commercial, bridging, alt-doc and credit-impaired funders each require separate accreditation and volume to maintain. We hold and use all of them.

What usually gets in the way
  • The existing property sells for less than the valuation assumed
  • The sale takes longer than the term and interest keeps capitalising
  • Peak debt exceeds 80% of combined value and the facility is declined
  • End debt fails serviceability even though peak debt was approved
How we place it
  • End debt tested for serviceability first — it is the number that has to work
  • A conservative sale price used in the model, not the agent appraisal
  • A costed fallback agreed before drawdown, including what a price reduction means
  • Long settlement or deposit bond considered first — they are often cheaper
How it works

Understand → Compare → Apply → Settle

01 Day 0

Tell us the whole story

Including the decline, the credit event or the structure you think is a problem. Nothing is placed until we understand it.

Credit impact — none
02 Days 1–10

Structure and match

Financials reviewed, the entity structure confirmed, and the file matched to funders whose policy it genuinely fits.

Credit impact — soft enquiry only
03 Weeks 2–3

Submit with the argument attached

The application goes in with financials, add-back workings and a written explanation for the assessor.

Credit impact — enquiry recorded
04 Weeks 4–8

Settle

Specialist files run longer. We manage valuations, legal review of trust deeds and the settlement booking.

Credit impact — account reported
Run the numbers

Test the end debt before you commit

Model repayments on the end debt position, check LVR against combined security, and estimate stamp duty on the purchase.

Open the calculators
Common questions

Bridging questions

Ask a broker →

Usually not. Most bridging facilities capitalise interest onto the balance so you are not funding two mortgages out of cash flow. The trade-off is that the debt grows each month, which is why a short, realistic term matters more than the rate.

Interest continues to capitalise and most lenders will require you to reduce the asking price. Extensions are possible but expensive. This is the scenario we model at the outset — if you cannot live with the twelve-month version, the bridge is the wrong tool.

Peak debt is generally capped at eighty per cent of the combined value of both properties, and the end debt must pass normal serviceability on its own. Plenty of applicants clear the peak debt test and fail the end debt test, so we check that one first.

Sometimes. Renting means two moves, storage and the risk of buying back into a rising market. Bridging means interest on peak debt for a few months. On a six-month window the numbers are usually closer than people expect — we run both.

Frequently. A long settlement negotiated with the vendor, a deposit bond, or a simultaneous settlement can achieve the same outcome with no bridging interest at all. We look at those before recommending a bridge, which is not what a lender-paid product sale would do.

Get started

Find out whether you need a bridge at all

Twenty minutes and we will price the bridge, the long settlement and the sell-first option side by side — including the version where your property takes a year to sell.

End debt firstTested before peak debt is even discussed.
Downside costedThe twelve-month scenario, in writing.
Alternatives pricedLong settlement and deposit bond compared.