D-01
Home loans
Buying your next home or an investment property in Melbourne. We compare lenders and structure the loan around your plans.
Find out more : Home loansD-09
Bridging loans
Bridging Loans
Plain English. Properly structured.
Found the right home before selling your current one? A bridging loan can let you buy now and sell after, without a rushed sale or a missed opportunity. It's a useful tool with real risks. We help clients across Australia understand both. We're based in Oakleigh, Victoria.
01 — What it is
Bridging loans, in plain English.
A bridging loan is short-term finance that covers the gap between buying a new property and selling your existing one. The lender looks at both properties together. Your combined debt during the bridging period, called the peak debt, is your current loan plus the cost of the new property and purchase costs. Once your existing home sells, the sale proceeds pay down the peak debt, leaving what is called the end debt on the new home.
Bridging periods are usually limited, often to a matter of months for an established home and longer if you are building. During that time, many lenders let interest accrue or capitalise instead of requiring full repayments on the combined debt, which eases cash flow while you are carrying two properties.
The main risk is time and price. If your current home takes longer to sell, or sells for less than expected, the end debt could be higher than planned and interest keeps building. That's why lenders assess the bridging loan conservatively and why we test a few scenarios before you commit.
Bridging is not the only option. Sometimes selling first with a longer settlement, or negotiating a longer settlement on the purchase, does the job. We talk through each so you can pick the one that fits.
02 — Who it suits
Is this the right fit?
- [A]Homeowners who have found their next home before selling
- [B]Families building a new home while living in their current one
- [C]Downsizers who want to move once, not twice
- [D]Buyers with substantial equity in their current property
- [E]People who want to avoid a rushed sale
- [F]Clients anywhere in Australia, with a home base in Oakleigh, Victoria
03 — How it works with us
From first chat to settlement.
- 01Stage 1 of 4Map the numbers
Map the numbers
We work out peak debt, end debt and the realistic sale price of your current home, and test what happens if the sale takes longer.
- 02Stage 2 of 4Compare the alternatives
Compare the alternatives
Bridging, selling first, longer settlements, or using equity for a deposit. We lay them out side by side.
- 03Stage 3 of 4Approve the bridge
Approve the bridge
If bridging is right, we arrange approval with a lender whose bridging terms match your timeline.
- 04Stage 4 of 4Sell and settle down
Sell and settle down
Once your home sells, proceeds go to the lender and the loan reverts to a standard home loan on the new property.
04 — What lenders look at
What you'll need.
| Ref | Item | Why it matters |
|---|---|---|
| M-01 | Current loan statements | For your existing home. |
| M-02 | Sale appraisal | A realistic agent appraisal for your current property. |
| M-03 | Purchase contract | Or building contract if building the new home. |
| M-04 | Income evidence | To show you can service the end debt. |
| M-05 | Selling plan | When you plan to list and how long you expect it to take. |
| M-06 | Savings | A buffer for costs during the bridging period. |
05 — Common mistakes
What to avoid.
Check 01
Overestimating the sale price
Check 02
Waiting too long to list
Check 03
Forgetting accrued interest
Check 04
Not considering alternatives
Q-01How long can a bridging loan last?
It depends on the lender, and is usually longer if you are building rather than buying an established home. We will confirm the limits for your situation.
Q-02Do I have to make repayments on both loans?
Not always. Many lenders let interest on the bridging portion capitalise until your current home sells. You still pay for it in the end.
Q-03What happens if my house does not sell in time?
The lender may extend, require repayments, or in some cases require a sale. That is why we test longer timeframes before you commit.
Q-04Is a bridging loan expensive?
Rates can be higher than standard loans, and interest accrues on a larger debt. Weigh that against the cost of a rushed sale or moving twice.
Q-05Can I use a bridging loan to build?
Yes, some lenders offer bridging during construction. It works differently to a standard bridge, with progress payments on the build.
Q-06Do you arrange bridging loans outside Victoria?
Yes, Australia-wide. Our office is in Oakleigh.
07 — Related
Related loans.
D-02
Construction loans
Building a new home, a knock-down rebuild or a major renovation. Loans that pay your builder in stages as the work goes up.
Find out more : Construction loansD-06
Refinancing
Switching lenders, releasing equity or restructuring your loans. We check whether a move actually leaves you better off.
Find out more : RefinancingFrom the blog
Construction5 min read
Knock-Down Rebuild Finance: What You Need to Know Before You Start
Planning to demolish and rebuild on your block? Here's how knock-down rebuild finance works, what lenders look for, and how to budget for the costs people often miss.
Buying & Selling5 min read
Bridging Loans: Buying Your Next Home Before Selling the Current One
Found your next home but haven't sold yet? Here's how bridging loans work, what they cost, the risks to plan for, and the alternatives worth considering.
08 — Enquire
Tell us what you're planning.
No cost and no obligation. We'll help you understand your options and what the next step looks like.
Prefer email? Write to help@ridgefinance.au.