Bridging Loans
Short-term finance when buying before selling or managing overlapping settlements.
Short-term finance when buying before selling or managing overlapping settlements.
Aspect Financial Solutions helps you understand the lender requirements, documentation, structure and approval pathway before lodging an application.
Bridging loans
A bridging loan can help you purchase a new property while allowing time to sell your existing one. It bridges the gap between two transactions so you do not have to perfectly align both settlements.
When bridging may help
- Upgrading or downsizing your home.
- Buying before your current property sells.
- Avoiding temporary accommodation.
- Buying at auction while preparing your existing property for sale.
- Managing an investment or owner-occupied transition.
Key concepts
| Concept | Meaning |
|---|---|
| Peak debt | The total debt while both properties are held. |
| End debt | The remaining debt after the existing property is sold. |
| Capitalised interest | Some lenders may allow interest to be added to the loan during the bridging period. |
| Exit strategy | The plan to repay the bridging debt, usually through sale proceeds. |
Risks to manage
The main risks are not selling in time, selling for less than expected, or being left with a higher ongoing debt. A realistic sale strategy is essential.
Need lending guidance?
Start with a clear conversation about your borrowing position, lender options and next steps.