A bridging loan is a short-term home loan that allows you to buy a new property before selling your current one.
Moving home is already a big deal, and the last thing you want is to feel rushed into selling, or to miss out on the right property because your timing doesn’t line up. A bridging loan gives you the breathing room to buy when you’re ready, move on your own terms, and sell your existing home without the pressure of a ticking clock.
At Ingram Financial, we help clients across Australia structure bridging loans the right way. With access to dozens of lenders, we’ll find the right fit for your situation and guide you through the process from start to finish.
What Is a Bridging Loan?
A bridging loan helps you “bridge the gap” between buying a new home and selling your existing one.
Instead of selling first, you can:
- Purchase your new property
- Move when you’re ready
- Sell your current home in your own time
This can reduce stress and give you more flexibility in a competitive property market.
How Does a Bridging Loan Work?
Lenders structure bridging loans in two stages, around peak debt and end debt.
Peak debt is the maximum total debt owing during the bridging period before you sell your existing property, while end debt is the loan balance that remains after the lender applies your sale proceeds.
1. Purchase your new property
Your lender provides funds to complete your purchase.
2. Temporary “peak debt” period
This is the combined value of your existing home loan and your new property purchase.
3. Sell your existing property
Once you sell your current home, the proceeds reduce your loan.
4. Final loan (“end debt”)
Your loan settles into a standard home loan based on the remaining balance.
Key Features of Bridging Loans
- Short-term loan (typically 6–12 months, though it can be as long as 24 months with some lenders)
- Interest may be capitalised (added to the loan temporarily)
- Based on the equity in your current property
- Available for owner-occupiers and some investors
- Flexible repayment options during the bridging period
Benefits of a Bridging Loan
- Buy your next home before selling
- Avoid temporary accommodation or renting
- Take your time to sell for the right price
- Move on your timeline, not the market’s
- Reduce pressure during the buying process
Things to Consider
Bridging loans can be powerful. However, you need the right structure.
Things to keep in mind:
- Your existing property needs to sell within the loan term
- Interest costs and application fees may be higher than standard loans
- You may temporarily hold two properties
- Market conditions can affect your sale price
That’s why working with an experienced mortgage broker is critical.
Who Should Consider a Bridging Loan?
Bridging loans are ideal for:
- Homeowners upgrading to a larger property
- Downsizers buying before selling
- Families relocating for work or lifestyle
- Buyers in competitive markets who don’t want to miss out
How Much Can You Borrow?
Your borrowing capacity depends on:
- The value of your current property
- Your existing loan balance
- The purchase price of your new home
- Your income and financial position
Most lenders allow borrowing up to 75–80% of the combined property value, but this varies.
We’ll help you understand your borrowing power and structure your loan safely.
Bridging Loan Calculator: Two Worked Examples
Every lender works out bridging finance a little differently, so a simple calculator can easily mislead. Instead, here is how the numbers come together in two typical upgrades. The key figures are your peak debt (what you owe while you own both homes) and your end debt (what’s left once your current home sells).
| Scenario A: plenty of equity | Scenario B: tighter equity | |
|---|---|---|
| Current home value | $1,300,000 | $1,100,000 |
| Owing on current home | $400,000 | $650,000 |
| New home price | $1,600,000 | $1,500,000 |
| Purchase costs (stamp duty and legals, estimated) | $75,000 | $70,000 |
| Peak debt (owing + price + costs) | $2,075,000 | $2,220,000 |
| Peak debt as a share of both homes’ value | 71.6% | 85.4% |
| Sale price less selling costs (estimated) | $1,270,000 | $1,075,000 |
| End debt (peak debt less net sale proceeds) | $805,000 | $1,145,000 |
| End debt as a share of the new home’s value | 50.3% | 76.3% |
- Scenario A keeps peak debt at 72% of the two homes’ combined value, within the 75 to 80% range many lenders work to. After the sale, the end debt is about half of the new home’s value, so this is a straightforward bridging loan.
- Scenario B pushes peak debt to 85% of the combined value. As a result, it may need a larger contribution, a lower purchase price, a different loan structure or a specialist bridging lender such as Bridgit. We would look at these options with you before you commit.
- Neither example includes interest. Many bridging loans add (capitalise) the interest during the bridging period, so your actual end debt will be higher, and a longer sale period adds more.
To estimate the stamp duty on your next home, try our stamp duty calculator. Then book a free chat and we will run your own figures against each lender’s rules for peak debt, end debt and the bridging period.
These examples are illustrations only, based on assumed values and costs. They are not a quote or an offer of finance, and lending criteria apply.
Bridging Loans in the Sutherland Shire
Many Shire families want to stay in the area as their needs change, and bridging finance can make that move easier. It lets you secure your next home first, then sell your current one without rushing.
When Locals Use Bridging Finance
- Upsizing to a family home. Moving from a unit or townhouse to a house in areas like Menai, Engadine, Kareela or Jannali.
- Downsizing. Buying a low-maintenance apartment in Cronulla or Miranda before selling the family home.
- Buying at auction. Auctions are common in the Shire and purchases are unconditional, so bridging can let you bid with confidence before you’ve sold your current home.
Bridging loans work on your “peak debt”: your current loan plus the new purchase. Lenders then look at your “end debt” once you’ve sold your existing home. Getting realistic about your likely sale price and timeframe is the most important part. We’ll help you stress-test the numbers before you commit.
Moving within the Shire? See how we help Sutherland Shire buyers, or book a free chat.
Why Use Ingram Financial for a Bridging Loan?
- Access to dozens of lenders across Australia
- Expert structuring of peak and end debt
- Clear, straightforward advice
- Support from pre-approval through to settlement
- Australia-wide service
We make complex lending simple and ensure your bridging loan is set up correctly from day one.
Free Guide: Bridging Finance in Australia
Our free ebook explains how bridging finance works in Australia and what to consider before applying for a bridging loan. Learn how to buy before you sell and avoid common mistakes that can cost borrowers thousands over the life of a loan.
Download your free copy below.
Frequently Asked Questions
How Bridging Loans Work
Most bridging loans run for 6 to 12 months, depending on the lender, and some allow longer (up to around 24 months), usually when you’re building your next home. The term has to give you enough time to sell, so we look at how long similar homes are taking to sell and your own plans before choosing a lender.
Often you can reduce them. Many lenders let you capitalise the interest on the bridging debt, which means it’s added to the loan rather than paid monthly, so you aren’t stretched by two full repayments while you sell. Some lenders still expect you to keep paying your existing loan as normal. Capitalised interest increases your end debt, so the sooner your property sells, the less the bridging period costs. We’ll explain how each lender handles it.
Your existing mortgage stays in place during the bridging period and forms part of your peak debt alongside the new loan.
Depending on the lender, you may be able to defer repayments on one or both loans during this time, with interest capitalised.
Once your existing property sells, the proceeds pay down the peak debt and your loan settles into a standard home loan on the remaining balance.
Costs and Suitability
Bridging loans typically carry a higher interest rate than a standard home loan, and interest is often capitalised during the bridging period, meaning it’s added to your loan balance rather than paid monthly.
There may also be application and valuation fees. The total cost depends on how long the bridging period runs and the size of your peak debt, so the sooner your existing property sells, the lower your overall cost.
We’ll give you a clear picture of the numbers before you proceed.
It depends on your situation, but for many people it’s a great option, especially in a competitive market where waiting to sell first could mean missing out on the right home.
The key is making sure it’s structured correctly for your circumstances, with a realistic plan for selling your existing property within the loan term. We’ll help you work through whether it makes sense for you before you commit to anything.
Buying and Selling
Lenders will usually review your situation at the end of the bridging term. Depending on the lender and your circumstances, options can include a short extension, adjusting your asking price to achieve a sale, or converting the remaining debt into a standard loan if you can afford the repayments. If none of those work, the lender may require the property to be sold. That’s why we plan a realistic sale price and timeframe from the start and check each lender’s end-of-term policy before you commit.
Yes, and this is actually one of the most common reasons people use bridging finance.
Buying at auction means exchanging contracts on the spot with no cooling-off period, so having your finance sorted beforehand is essential.
We can help you get pre-approval for a bridging loan so you can bid with confidence knowing your finance is ready to go.
Yes, although many downsizers sell first because their new home costs less. Bridging finance can still help if you want to secure the right apartment or smaller home before selling, especially at auction. We’ll compare the costs of buying first with selling first.
Applying
Yes. We can help you secure pre-approval so you can buy with confidence. It works much like a standard pre-approval, but the lender also looks at the estimated value of your current home and your expected end debt once it sells. Pre-approvals typically last around three months, and some lenders can extend them.
Yes, it’s possible, though the assessment process can be more involved than for a standard PAYG applicant.
Lenders will want to see evidence of your income, typically through tax returns and financial statements.
Some lenders on our panel are more flexible with self-employed borrowers than others, so having a broker find the right fit matters.
Get in touch and we can talk through your options.
Once we have your documents, we can usually submit your application within a day. Lender turnaround then varies, from the same day with some lenders to over a week with others.
Formal approval and settlement typically follow a similar timeline to a standard home loan.
If you’re working to a tight deadline (such as an upcoming auction or settlement date), let us know early and we’ll prioritise getting things moving.
Ready to Buy Before You Sell?
Speak with Ingram Financial today and get expert guidance on your bridging loan options.
The information on this page is general in nature and does not take into account your objectives, financial situation or needs. Lending criteria, fees and charges apply. Consider whether it is appropriate for you and speak to us for advice specific to your situation.
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