Bridging Finance
How does it work?
Our Process
FAQs
Bridging Finance
You’ve already purchased a home before and now you’re ready to move into another, but now you’re faced with a question: how can I afford to buy (or build) another house, while I still haven’t sold my current property?
This is where Bridging Finance comes in.
A bridging loan is a short-term loan that you can utilise to “bridge” the gap between selling your current home and buying your next one.
When you take out a bridging loan, your chosen lender will usually take over the mortgage of your current property, as well as lending you the funds for the contract purchase price of the new property and any additional purchase costs such as stamp duty, legal fees etc.
The total amount borrowed is called the Peak Debt, your minimum repayments will generally be calculated on an interest-only basis and in many cases can be capitalised (added) to the peak debt, so you don’t need to worry about them while you try and sell your property.
Once you sell your previous property, the proceeds will go towards reducing the Peak Debt, with the amount remaining – the End Debt, which is repaid as a standard mortgage product from this point forward.
70% of Australian mortgages utilise a broker.
Make a Bridging FInance Enquiry
How does it work?
Purchase Process
Sale Process
You now have a debt for $800,000, for which interest will be payable as you wait for the sale of your current property.
If you’ve opted to capitalise your interest, this debt will continue to increase (as your repayments are capitalised into the debt) until you finalise the sale of your property.
To keep the numbers simple, we will assume you have been paying the interest on your peak debt whilst finalising the sale of your previous property.
If the net proceeds on the sale of your previous property, you will be left with an “End Debt” of $400,000, which is payable as a standard mortgage with regular repayments.
Our Process
Choose the home
that is right for you
Purchasing a home is a big task, luckily, as a first home buyer time is not as much of an issue.
Contact Us for best interest rates
Utilising our market knowledge and industry connections, we will endeavour to provide you with the best deals on the market.
Apply for a Loan with
all needed documents
No need to panic, we will help you to assemble all the required documents during the application process.
Congrats! You're a
new home owner
Time to start thinking about a house warming party, or maybe some renovations!
FAQs
Most lenders will offer a bridging loan up to a maximum of 12 months. If you require a bridging loan for a longer period than this, you may require an alternative lending solution, get in touch with us to see what we can do.
You will still be required to pay the lender the peak debt amount, it’s important you don’t borrow beyond your means and account for any unexpected circumstances.