What affects the cost of a bridging loan?

The cost is influenced by the loan amount, interest rate, loan term, fees, loan-to-value ratio and the strength of the proposed exit strategy.

Are bridging loans more expensive than bank loans?

Bridging loans typically have higher interest rates than traditional bank loans because of their short-term nature, faster approval process and more flexible lending criteria.

Bridging Loan Calculator Australia

Q: What is a bridging loan calculator?

A bridging loan calculator estimates the total cost of a short-term property-backed loan based on the loan amount, interest rate and loan term. It helps borrowers understand their likely repayment before applying.

Q: How is bridging loan interest calculated?

Bridging loan interest is typically calculated daily and capitalised, meaning it is added to the loan balance and repaid at the end of the loan term rather than paid monthly.

Q: Do you make monthly repayments on a bridging loan?

In most cases, no. Bridging loans are commonly structured so that interest is capitalised, allowing borrowers to repay the full loan amount and accumulated interest when the loan exits.

Use this bridging loan calculator to estimate what short-term property finance will actually cost you, including the interest, the peak debt while you hold two properties, and the end debt left over after your sale settles.

In short: a bridging loan calculation has three parts. Work out your peak debt, the maximum you owe while holding both properties. Apply the interest over your expected term. Then subtract your net sale proceeds to find the end debt you carry afterwards. Every formula is set out below so you can check the numbers yourself.

Bridging loan calculator

Enter your loan amount, interest rate and term to estimate your total interest, total repayment and cost over the term.

The calculator gives an interest estimate. For a full picture including fees, use the formulas and worked examples below, then check the figures against our bridging loan costs and fees guide and current bridging loan interest rates.

How to calculate a bridging loan

Five formulas cover almost every bridging scenario in Australia.

1. Simple interest

Used where interest is charged on the original balance and settled at exit.

Interest = Loan amount × Annual rate × (Months ÷ 12)

On $1,000,000 at 9% p.a. over 6 months: $1,000,000 × 0.09 × 0.5 = $45,000, or $7,500 a month.

2. Capitalised interest, compounding monthly

Used where interest is added to the balance each month and then itself accrues interest. Many bridging facilities work this way, so check which method your lender applies.

Balance at exit = Loan amount × (1 + Annual rate ÷ 12) ^ Number of months

Same facility: $1,000,000 × (1 + 0.0075) ^ 6 = $1,045,852, so interest of $45,852 rather than $45,000. The gap is small over six months and grows materially over twelve or on larger balances.

3. Peak debt

The maximum you owe while you hold both properties. This is the figure lenders assess.

Peak debt = Existing mortgage + Purchase price + Purchase costs + Capitalised interest and fees − Cash contribution

4. Peak loan-to-value ratio

Peak LVR = Peak debt ÷ Combined value of both properties

Most bridging facilities are structured up to 65% to 75% peak LVR. If your calculation lands above that, you need a larger cash contribution or a smaller purchase.

5. End debt

What remains after your existing property sells and the proceeds are applied.

Net sale proceeds = Sale price − Agent, legal and discharge costs End debt = Peak debt + Capitalised interest and fees − Net sale proceeds

The end debt is the loan you actually live with afterwards, so lenders assess whether you can service or refinance it. See peak debt explained and how bridging loans work.

Worked example: interest only

A borrower needs a $1,000,000 bridging facility for six months while their existing property is marketed. The rate is 9% p.a. with interest capitalised.

Loan amount: $1,000,000
Interest rate: 9% p.a.
Term: 6 months
Interest, simple: $45,000, or $7,500 a month
Interest, capitalised monthly: $45,852
Estimated repayment at exit: $1,045,000 to $1,045,852 depending on method

Establishment, legal and valuation fees are additional and are not included in this figure.

Worked example: peak debt and end debt

This is the calculation most buy-before-sell borrowers actually need, and the one a simple interest calculator does not answer.

A homeowner is buying before selling.

Existing property value: $1,500,000
Existing mortgage: $450,000
New purchase price: $1,250,000
Stamp duty and purchase costs: $70,000
Cash contribution: $100,000
Peak debt: $450,000 + $1,250,000 + $70,000 − $100,000 = $1,670,000
Combined security: $1,500,000 + $1,250,000 = $2,750,000, giving a peak LVR of 60.7%, comfortably inside the usual range.
Interest: six months at 8.5% p.a. capitalised, approximately $70,975. Balance at sale about $1,740,975.
Net sale proceeds: the existing property sells for $1,500,000, less about $37,500 in agent and legal costs, leaving $1,462,500.
End debt: $1,740,975 − $1,462,500 = approximately $278,475, which becomes an ongoing loan against the new $1,250,000 property at about 22.3% LVR.

Actual lender calculations may apply a conservative assessed sale value, include additional fees, and treat interest differently. Costs, rates and LVR limits are subject to lender assessment and approval.

Want the real numbers rather than an estimate? Send us your property values, existing mortgage balance, purchase price and expected timeframe. We will return an indicative peak debt, combined LVR, end debt and total cost including every fee. Request a calculation.

What a bridging loan calculator does not tell you

An online calculator handles the arithmetic. It cannot assess the things that actually decide your approval and your rate:

Whether the LVR is acceptable for your specific security, location and property type.
Whether your exit is credible. A contracted sale prices very differently from an unlisted property.
What the lender will value the property at, which is frequently below the owner's expectation and changes every figure above.
The fees, which on short terms often exceed the difference between a good rate and a poor one.
Whether the end debt is serviceable, which is what lenders assess before approving anything.

Treat the output as a starting estimate for budgeting, not as an approval or a quote.

What affects your bridging loan cost?

Loan-to-value ratio. The single largest driver of pricing.
Security type. Prime residential prices best. Commercial, land and development sites price wider.
Exit strength. Contracted beats expected.
Loan size and term. Larger facilities can attract sharper pricing. Shorter terms cost less in dollars but often more as an effective rate, because fixed fees do not shrink.
Mortgage position. A first mortgage prices better than a second mortgage.
Loan purpose. Consumer and commercial facilities are assessed and priced differently.

Fees to include in your calculation

Interest is only part of it. Add:

Establishment fee, typically 1% to 2.5% of the loan
Legal fees, typically $1,000 to $5,000 or more
Valuation, typically $500 to $3,000 or more
Line or ongoing fees where they apply, typically 0.1% to 0.5% per month
Exit or discharge fees, where charged
Default interest if the facility runs past term, typically an additional 2% to 4% p.a.

Full detail in our bridging loan costs and fees guide. On a six month facility these fixed costs can add roughly a third again to your interest figure.

How bridging calculations differ from a standard home loan

A home loan calculator amortises a balance over decades and gives you a monthly repayment. A bridging calculation does something different: it works out a maximum exposure across two properties, applies interest that usually is not paid monthly at all, and then tells you what is left when one property sells.

That is why peak debt and end debt matter here and never appear on a standard mortgage calculator, and why bridging is assessed on the security and the exit rather than on monthly serviceability. See bridging loans in Australia for the full comparison.

Who uses these calculations

Homeowners buying before selling, downsizers, buyers at auction, property investors, developers and business owners. See the full range of bridging loan use cases or who we help.

Frequently asked questions

What is a bridging loan calculator?

A tool that estimates the cost of short-term property finance from the loan amount, interest rate and term. A complete bridging calculation also needs peak debt, combined LVR and end debt, which most simple calculators do not cover.

How do you calculate a bridging loan?

Peak debt equals your existing mortgage plus the purchase price plus purchase costs plus capitalised interest and fees, less any cash contribution. Interest is the loan amount multiplied by the annual rate multiplied by months divided by twelve. End debt is peak debt plus capitalised interest and fees, less your net sale proceeds.

How is bridging loan interest calculated?

Usually daily on the drawn balance and added to the loan monthly. Where interest capitalises and compounds, use the loan amount multiplied by one plus the monthly rate, raised to the number of months. Confirm which method your lender applies, because simple and compounding interest give different totals.

What is peak debt?

The maximum owed while you hold both properties, including the existing mortgage, the new purchase, purchase costs and any capitalised interest and fees, less any cash contribution.

What is end debt?

The balance remaining after your existing property sells and the net proceeds are applied. It generally becomes an ongoing loan or is refinanced, and lenders assess whether you can carry it.

Do you make monthly repayments on a bridging loan?

Often not. Most facilities capitalise interest so nothing is paid during the term and the full amount is repaid at exit. Some lenders require monthly servicing instead.

What LVR should I use in the calculation?

Most bridging facilities are structured up to 65% to 75% of the combined property value. If your peak LVR calculates above that, expect to need a larger cash contribution, a lower purchase price or a lender with wider appetite.

Does the calculator include fees?

The interest calculation does not. Add establishment, legal, valuation and any ongoing or exit fees separately. On short terms these can add roughly a third again to the interest figure.

Are bridging loans more expensive than bank home loans?

Per year, yes, because they are short-term, asset-based lending against an exit that has not happened yet. Over the actual term the dollar cost is often modest relative to the transaction it makes possible.

Is a calculator estimate the same as an approval?

No. It is a budgeting estimate only. Actual figures depend on the lender's valuation, its assessment of your exit, the LVR it will accept and its fee structure.

Run your scenario with a specialist

A calculator gives you an estimate. A broker gives you the number a lender will actually agree to.

Bridging Loans Australia compares bridging options across Australia from a panel of bank, non-bank and specialist lenders. Send us your scenario and we will return the peak debt, LVR, end debt and all-in cost. Contact our team, or read more about our brokerage.

Bridging Loans Australia.