Bridging Loans Australia
Bridging loans are short-term loans secured against property that cover a temporary funding gap between two financial events. They are commonly used to buy a new property before selling an existing one, complete an urgent settlement, refinance maturing debt or access available property equity. Repayment generally comes from a property sale, refinance or another clearly defined exit strategy.
Bridging Loans Australia is a specialist Australian mortgage brokerage. We assess your proposed transaction and compare potentially suitable bridging finance options from our panel of bank, non-bank and specialist lenders.
Bridging finance in Australia can be provided by banks, non-bank lenders and specialist private lenders, with the appropriate option depending on the loan purpose, timeframe, property security and borrower's financial position.
Get an Indicative Bridging Loan Assessment | Use the Bridging Loan Calculator
Bridging loans at a glance
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Loan purpose: buying before selling, urgent settlement, refinance, investment or short-term property funding. See the full range of bridging loan use cases.
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Security: residential, investment, commercial or other acceptable Australian property
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Loan term: commonly between 1 and 12 months, depending on the lender and transaction
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Repayment: property sale, refinance or another clearly identified exit
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Interest: may be paid monthly or capitalised into the loan balance
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Loan-to-value ratio: commonly assessed against the combined property value and total debt; lender limits vary
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Approval focus: property security, financial position, loan purpose, exit strategy and applicable lending requirements
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Availability: residential consumer and eligible commercial or investment-purpose scenarios. See who we help.
All loan amounts, rates, terms and LVRs are subject to lender assessment and approval.
What is a bridging loan?
A bridging loan is temporary property finance used until a planned financial event takes place. The most common example is purchasing a new home before the existing home has been sold.
Instead of making the new purchase conditional on the sale of the existing property, an approved bridging facility can provide the funds required to settle first. When the existing property is sold, the sale proceeds are applied to the bridging debt. Any amount that remains after the sale is known as the end debt and may need to be refinanced into longer-term finance.
Bridging loans can also be used outside traditional home-moving scenarios. Property investors, developers and business owners may use short-term property finance while waiting for a sale, refinance, approval, construction facility or another defined source of repayment. Learn more in our guide explaining how bridging loans work in Australia.
How do bridging loans work in Australia?
Although every transaction is different, most bridging loans follow five broad stages.
1. The funding gap is identified
The borrower needs to complete a property transaction before sale proceeds or longer-term finance are available. This may involve buying before selling, covering a delayed settlement or refinancing a facility that is approaching maturity.
2. The lender assesses the complete position
The assessment may consider:
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The value and location of the security property
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The amount of existing debt
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The new loan amount required
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The combined loan-to-value ratio
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The borrower's financial position
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The purpose of the funding
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The proposed loan term
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The intended exit strategy
Consumer-purpose lending is also subject to responsible lending and suitability requirements. Our guide to bridging loan eligibility covers what lenders typically look for.
3. Peak debt is calculated
Peak debt is the highest total debt during the bridging period. It may include the existing mortgage, the new property purchase, capitalised interest and approved fees or transaction costs.
The lender compares the peak debt with the value of the property or properties being offered as security. See our detailed explanation of peak debt in bridging loans.
4. The bridging facility settles
Once the application, valuation, legal documentation and lender conditions are complete, the facility can settle. Timing varies according to the lender, property, documentation and complexity of the transaction.
5. The agreed exit occurs
The loan is repaid through the agreed exit strategy, such as:
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Sale of the existing property
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Refinance into commercial or construction finance
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Sale of an investment property or development stock
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Another verified source of repayment acceptable to the lender
Exit strategy is the single biggest factor in both approval and pricing. Read more on bridging loan exit strategies.
Bridging loan example: peak debt and end debt
The following simplified example shows how a buy-before-selling facility may be calculated.
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Existing property value: $1,500,000
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Existing mortgage: $500,000
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New property purchase: $1,200,000
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Combined property value: $2,700,000
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Simplified peak debt: $1,700,000
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Peak LVR before costs and interest: 62.96%
The borrower uses bridging finance to refinance the existing $500,000 mortgage and complete the $1,200,000 purchase. The simplified peak debt is therefore $1,700,000.
If the existing property later sells for $1,500,000, and sale proceeds are applied to the bridging facility, the simplified end debt would be approximately $200,000 before interest, fees, stamp duty, legal costs and selling expenses.
This is an illustrative example only. Actual lender calculations may use a lower assessed sale value, allow for selling costs and include capitalised interest and fees. Use our bridging loan calculator to model a more detailed scenario.
Types of bridging loans
Bridging finance is not one standard product. The appropriate structure depends on the borrower, loan purpose, property security and exit.
Residential bridging loans
Residential bridging loans are commonly used by homeowners who want to buy before selling, upgrade, downsize or avoid moving into temporary accommodation between settlements.
Where credit is predominantly for personal, domestic or household purposes, consumer-credit laws and responsible lending obligations may apply. The borrower's requirements, objectives and financial position must be assessed, even where the proposed exit is the sale of a property.
Commercial bridging loans
Commercial bridging loans may be used for eligible business, investment or development purposes. Common examples include acquiring an investment property, refinancing business debt, holding a development site or bridging into construction finance.
Commercial facilities can be more flexible than consumer lending, but the lender will still assess the property security, purpose of funds, exit strategy and overall transaction risk.
First-mortgage bridging loans
A first-mortgage bridging lender holds the first-ranking registered mortgage over the security property. This may involve refinancing the existing lender and advancing the additional funds required for the transaction.
First-mortgage facilities generally present less enforcement risk to the lender than a second mortgage and may therefore attract more competitive pricing, subject to the complete application.
Second-mortgage bridging loans
A second mortgage allows an existing first mortgage to remain in place while another lender registers behind it. The total exposure of both lenders is assessed against the property value.
Second mortgages carry additional risk and normally have higher rates and fees. Through our panel, second-mortgage options are generally available only for eligible business or investment purposes rather than personal consumer purposes. See our guide to second mortgages and equity release for the applicable criteria, and our comparison of bridging loans versus second mortgages.
When can a bridging loan be used?
The scenarios below are the most common. Each has a dedicated guide within our bridging loan use cases section.
Buying before selling
A homeowner may find the right property before their existing home is sold. Bridging finance can provide time to complete the purchase and then market the existing property without making the new contract dependent on a simultaneous sale. See buying a house before selling yours.
Buying at auction
Auction purchases are generally unconditional and have fixed settlement deadlines. An approved auction bridging loan may assist where a buyer has sufficient equity but cannot complete conventional finance within the available timeframe.
Covering a settlement timing gap
Sale and purchase settlements do not always align. Settlement-gap finance can cover a short period between the outgoing and incoming transactions.
Renovating before selling
Some borrowers use short-term finance to complete targeted improvements before listing a property. The purpose is to improve presentation, marketability or value before sale. Any proposed uplift should be assessed conservatively and should not be the only basis for the exit.
Learn more about renovating before selling.
Downsizing
Downsizers are frequently equity-rich and income-light, which is the profile standard serviceability tests handle least well. Short-term finance can allow the smaller property to be secured first and the family home sold without a deadline forcing the price. See downsizing in Australia.
Refinancing a maturing facility
A property owner may need temporary finance when an existing loan is approaching maturity but a sale or long-term refinance is not yet ready. The new lender will want to understand why the current facility cannot be repaid and how the replacement bridging loan will exit. If a bank has already declined the request, see declined by lenders.
Accessing equity before a sale
Available equity may sometimes be used before the property is sold, subject to the purpose of the funds, the proposed mortgage position and the lender's criteria. See accessing equity before selling.
How much can you borrow with a bridging loan?
Borrowing capacity depends on more than the property's headline value. The lender usually considers:
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Current property value
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New property purchase price
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Existing mortgage balances
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Stamp duty and transaction costs
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Interest retained for the proposed term
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Establishment, valuation and legal fees
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Expected net sale proceeds
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Maximum peak debt and end debt
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The lender's permitted LVR
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The borrower's ability to manage any remaining end debt
Many specialist bridging scenarios are considered within a total LVR range of approximately 65% to 75%, although lower or higher limits may apply depending on the lender, property, purpose and risk profile. Some residential bank products may use different limits and assessment methods.
An advertised maximum is not an entitlement or approval. The amount available can be reduced by capitalised interest, fees, a conservative sale-price allowance or the requirement to maintain an acceptable end position. Model your position with the bridging loan calculator.
Bridging loan interest rates and fees
There is no single bridging loan rate across the Australian market. Bank, non-bank, private, residential and commercial facilities can be priced differently.
The offered rate may be affected by:
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Consumer or commercial loan purpose
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First or second mortgage position
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Loan-to-value ratio
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Property type and location
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Open or closed exit
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Loan size and term
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Borrower and credit profile
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Complexity and required settlement speed
In addition to interest, costs may include:
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Establishment or application fee
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Brokerage fee
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Property valuation
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Lender and borrower legal fees
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Title searches and disbursements
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Settlement or account fees
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Extension or default costs where applicable
Review our current bridging loan interest-rates guide and bridging loan costs and fees. All advertised rates are indicative starting points only and should be confirmed for the specific transaction.
Do you make monthly repayments on a bridging loan?
It depends on the loan structure. With capitalised interest, the borrower does not pay the bridging interest monthly. Instead, interest is added to the loan balance and repaid when the loan exits. This can reduce cash-flow pressure during the bridging period, but it increases the balance that must ultimately be repaid.
Other facilities require interest to be serviced monthly. Paying interest rather than capitalising it may reduce the amount added to the loan balance, but the borrower must demonstrate that the repayments are manageable. The lender will determine which structure is available and appropriate after considering the loan purpose, financial position, LVR and exit.
Who may qualify for bridging finance?
A borrower may be eligible where there is sufficient acceptable property security, a realistic funding requirement and a clearly supported exit strategy. Approval is never based on property equity alone. See who we help for how different borrower types are assessed.
Consumer-purpose applications
For consumer-purpose bridging finance, the broker and lender may need to make reasonable inquiries about the applicant's requirements, objectives and financial situation, verify relevant information and assess whether the proposed credit is unsuitable.
Information may include income, expenses, liabilities, credit history, anticipated sale proceeds, future housing plans and the ability to manage any remaining end debt.
Business and investment-purpose applications
For eligible commercial applications, the lender may place greater emphasis on the security, business purpose and exit strategy. Requirements vary considerably between lenders, and supporting information may still be needed to demonstrate that the purpose and repayment strategy are credible. This commonly applies to business owners, property investors and self-employed borrowers.
What documents may be required?
The exact requirements depend on whether the loan is consumer or commercial and on the complexity of the transaction. Common documents include:
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Identification for applicants, directors and guarantors
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Current mortgage statements or payout figures
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Council rates notice for each security property
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Contract of purchase, if available
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Contract of sale, if the existing property has sold
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Evidence of the expected property value
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Details of assets and liabilities
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Evidence of income and living expenses for consumer applications
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Business entity and ABN or ACN details for commercial applications
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Explanation of the purpose of funds
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Written exit strategy and supporting evidence
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Solicitor or conveyancer details
Having the information ready can reduce delays, but valuation, legal and lender timeframes will still apply.
Open vs closed bridging loans
The difference is whether your exit is already contracted. A closed bridging loan applies where the existing property has generally sold or exchanged. The exit timing is known or clearly defined, lender risk is generally lower, pricing and conditions may be more favourable, and the lender will want the signed sale contract and settlement date.
An open bridging loan applies where the existing property has not yet sold. Exit timing is estimated rather than confirmed, lender risk is generally higher, and the facility may attract tighter criteria or higher pricing. The lender may require an appraisal, a marketing plan and a realistic sale timeframe. An open bridging loan does not mean that no exit is required. The lender still needs a credible plan for marketing, selling or refinancing the property within the loan term.
Bridging loan vs a standard home loan
The two products answer different questions.
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Purpose: a bridging loan covers a temporary funding gap. A standard home loan funds long-term property ownership.
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Term: months rather than decades, against a typical 25 to 30 years.
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Repayment: sale, refinance or a defined exit, against regular principal-and-interest or interest-only repayments.
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Interest: may be serviced or capitalised, against interest usually paid regularly.
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Cost: often higher due to the short term or specialised risk, against generally lower pricing for standard qualifying borrowers.
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Assessment: transaction, security, financial position and exit, against long-term serviceability, credit profile and lender policy.
If there is no genuine timing gap or short-term need, a standard home loan or refinance may be more appropriate and less expensive.
Risks of bridging finance
Bridging loans can solve time-sensitive property problems, but they also carry material risks.
The property may take longer to sell
If the sale takes longer than expected, additional interest may accrue and the borrower may need an extension or refinance. An extension is not guaranteed.
The sale price may be lower than expected
Lower sale proceeds can leave a larger end debt or create a shortfall. A conservative sale estimate and allowance for selling costs are important.
Interest and fees increase the debt
Capitalised interest improves short-term cash flow but increases the amount owing. Borrowers should consider the total dollar cost, not only the advertised interest rate. Our costs and fees guide sets out the components.
The planned refinance may not be available
Future refinancing depends on lender policy, valuation, serviceability, credit position and market conditions at that time. It should not be assumed to be automatic.
The security property is at risk
Bridging finance is secured credit. If the borrower cannot repay the facility, the lender may enforce its mortgage, subject to the applicable law and loan documents.
Before proceeding, borrowers should understand the repayment strategy, downside scenario and total cost if the exit is delayed.
Why use a bridging loan broker?
Bridging lenders differ significantly in their preferred property types, maximum LVRs, servicing requirements, loan purposes, valuation policies, pricing and settlement capabilities.
A specialist broker can:
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Calculate peak debt, end debt and total LVR
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Identify whether the request is consumer or commercial
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Compare potentially suitable options from their lender panel
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Explain indicative rates, fees and repayment structures
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Coordinate the valuation, application and settlement process
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Test the proposed exit before the application is submitted
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Identify likely issues before valuation or legal costs are incurred
Bridging Loans Australia does not represent that its panel includes every lender or product in the market. Our role is to assess your scenario and identify potentially suitable options available through our panel. More about our brokerage.
Bridging loans across Australia
We assist eligible borrowers seeking property-secured bridging finance throughout Australia, including:
Property location can affect valuation, lender appetite and maximum LVR. Metropolitan residential property generally has a broader lender market than specialised, remote, rural or less-liquid security.
Why choose Bridging Loans Australia?
Bridging Loans Australia focuses on short-term, property-secured finance rather than general long-term lending alone.
We provide:
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Assessment of residential and commercial bridging scenarios
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Access to a panel of bank, non-bank and specialist lenders
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Clear peak-debt, LVR and exit-strategy analysis
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Assistance with time-sensitive property transactions
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Support through application, valuation, documentation and settlement
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Australian credit-licensed consumer credit assistance through Brampton Finance Pty Ltd
Every application is subject to lender approval. We cannot guarantee approval, a particular interest rate or a settlement timeframe.
Request an indicative bridging loan assessment
To assess your scenario, we will generally need:
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Property address and estimated value
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Current mortgage balance
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New purchase price or net funds required
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Intended use of funds
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Required settlement date
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Preferred loan term
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Proposed exit strategy
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Whether the purpose is personal, investment or business related
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Alternatively, contact Bridging Loans Australia to discuss the proposed transaction.
Frequently asked questions
What is a bridging loan?
A bridging loan is short-term finance secured against property and used until a defined financial event occurs. The most common example is buying a new property before an existing property is sold, with the loan repaid or reduced when the sale settles.
How long does a bridging loan last?
Terms vary between lenders and scenarios. Many bridging facilities run for between 1 and 12 months, while some commercial or specialist transactions may have different terms. The proposed term must provide a realistic period for the intended sale, refinance or other exit.
Can I buy a property before selling my current home?
Yes, subject to lender approval. A bridging loan may fund the new purchase while the existing property is being marketed or waiting to settle. The lender will assess the peak debt, expected sale proceeds, financial position and remaining end debt. See buying a house before selling yours.
Do I need a signed contract of sale?
Not always. A closed bridging loan usually has a signed sale contract and known settlement date. An open bridging loan may be considered before the existing property is sold, but the lender may use more conservative assumptions or apply different pricing and conditions.
Do I make repayments during the bridging period?
Some facilities allow interest to be capitalised and repaid when the loan exits. Others require monthly interest payments. Availability depends on the lender, LVR, loan purpose and the borrower's financial position.
What is peak debt?
Peak debt is the highest total debt during the bridging period. It can include the existing mortgage, new purchase funding, capitalised interest and approved costs or fees.
What is end debt?
End debt is the amount remaining after the existing property is sold and the net sale proceeds are applied to the bridging facility. Any end debt generally needs to be repaid or refinanced into an appropriate longer-term loan.
What LVR is available for bridging loans?
LVR limits vary. Many specialist scenarios are considered within approximately 65% to 75% total LVR, while some bank products or low-risk scenarios may use different limits. The final LVR depends on the property, loan purpose, exit and lender policy.
How quickly can a bridging loan settle?
Some specialist transactions can settle within several business days after all valuation, legal, identification and lender requirements are satisfied. More complex or consumer-purpose applications can take longer. No timeframe should be treated as guaranteed until the lender and solicitors confirm readiness.
Can bridging finance be used for business purposes?
Yes. Eligible businesses, investors and developers may use commercial bridging finance for acquisitions, refinances, working capital or other acceptable business purposes secured by property. The lender will require a clear business purpose and exit strategy.
Can I get a second mortgage bridging loan?
Second-mortgage facilities may be available for eligible business or investment purposes where the existing first lender can remain in place and the total LVR is acceptable. They generally carry higher rates and fees and may require first-mortgagee consent or a priority arrangement. Consumer-purpose second mortgages are not offered through our current panel.
What happens if my property does not sell?
You should contact the lender or broker before the maturity date. Possible options may include an approved extension, refinance or revised sale strategy, but none is guaranteed. Additional interest, fees or default consequences may apply under the loan documents. For more information, visit our complete bridging loan FAQs or browse the bridging loan resources hub.
Author, review and important information
Prepared by: Bridging Loans Australia
Reviewed by: Brampton Finance Pty Ltd, Australian Credit Licence 385 602
Last reviewed: 5 August 2026
Bridging Loans Australia is a trading name of Brampton Finance Pty Ltd (ABN 60 650 253 455), Australian Credit Licence 385 602. We are a mortgage brokerage and not the lender for every facility discussed on this website.
The information on this page is general information only and does not take into account your objectives, financial situation or needs. Loan availability, amounts, LVRs, interest rates, fees, terms and timeframes vary and are subject to lender assessment and approval. Before proceeding, review the lender's final terms and consider obtaining independent legal, financial and tax advice where appropriate.
For consumer-purpose credit, Australian credit licensees must comply with responsible lending obligations, including making reasonable inquiries and assessing whether a proposed credit contract is unsuitable. More information is available from ASIC.