Unlock Your Next Move with Bridging Loans

Whether you're buying your next property before your current one sells, renovating a project, or need quick access to capital, bridging loans can help you stay agile. These short-term loans offer fast, flexible funding when timing is critical - letting you seize opportunities without waiting around for traditional finance. In this guide, we break down how bridging loans work, when to use them, and what to consider before diving in.

What Is a Bridging Loan?

Top Tip: If you're thinking about buying before selling, speak to a broker early. The right bridging strategy starts with planning, not panic.

A bridging loan (also known as bridging finance) is a short-term loan that helps you 'bridge the gap' between needing funds now and accessing them later — often from the sale of a property. It's typically secured against property and can be arranged much faster than a traditional home loan.

Common scenario: You want to buy a new home but haven’t yet sold your existing one. A bridging loan lets you purchase now and repay the loan once your current property sells.

How Do Bridging Loans Work?

Top Tip: Your exit strategy is just as important as your entry point. Make sure your plan to repay is realistic and documented from day one.

Bridging loans are usually secured against real estate. Lenders assess your exit strategy upfront — how you'll repay the loan — and release funds quickly, sometimes within a few days.

• Short terms: 1 to 24 months
• Interest-only repayments or capitalised interest (added to the loan)
• Loan amounts based on property value (up to 70–80% LVR)
• Higher interest rates than standard home loans due to short term and risk

Yes there are costs involved but often the rewards outweigh the costs so it is worth it and bridging loans are quite common as they are very useful. In Australia there are some lenders that are particularly good with it and St George is currently the best bank here in Australia.

Case studies and testimonials

Types of Bridging Loans

Top Tip: Closed bridging loans usually come with better terms. If you can lock in your exit timeline, you'll likely save on costs.

Bridging finance isn't one-size-fits-all. Here are the most common types:

• Closed bridging loans: You’ve exchanged contracts and have a firm settlement date.
• Open bridging loans: You don’t yet have a firm exit - perhaps your property is still on the market.
• First vs second mortgage bridging: First mortgages are secured with no existing debt; second mortgages carry more risk and cost.

Benefits of Bridging Loans

Top Tip: Bridging loans are a tool, not a solution. Pair them with a smart strategy to unlock their full potential - especially when timing is tight.

• Speed: Fast approvals - sometimes within days
• Flexibility: Use for purchases, renovations, business needs, or debt consolidation
• Interest-only options: Manage cash flow more easily
• No disruption: Buy before you sell

Common Uses

Top Tip: If you're eyeing a property at auction, get pre-approval for a bridging loan first. You'll need to settle fast - and confidence is key.

• Buying before selling
• Property auctions
• Funding settlement gaps
• Renovation or development
• Business cash flow
• Debt consolidation

Eligibility Criteria

Top Tip: Even with a weaker credit score, a strong exit strategy and good security can get you approved.

• Clear exit plan (e.g. sale or refinance)
• Property or other asset as security
• Ability to service interest (or capitalise)
• Acceptable credit history

The Application Process

Top Tip: Keep your documents organised. Fast approvals rely on fast responses.

1. Speak with a broker and provide loan details
2. Submit documentation and arrange valuation
3. Lender reviews and approves loan
4. Sign docs - funds are released

‍Why use a Mortgage Broker?

Costs and Fees

Top Tip: Always request a full breakdown of fees before you commit.

• Interest (typically 0.4–2% monthly)
• Establishment fee (1–2%)
• Valuation fee
• Exit fee (sometimes)
• Legal and broker fees

Risks and What to Watch

Top Tip: Always have a backup exit strategy. Be conservative with your timelines.

• High interest and fees if held too long
• Repayment risk if sale/refinance delays
• Secured loan - property may be at risk
• Market conditions can change fast

Case Study: From Lane Cove to Manly

Kirsten came to me with a clear goal: to move closer to the beach and start the next chapter of her life. She owned a beautiful home in Lane Cove and had her sights set on Manly. To ensure a smooth transition, we explored bridging finance and worked closely over three months to secure the right loan and execute the plan.

With Manly’s fast-moving market, timing was everything. She successfully purchased her new home under the hammer at auction. Although her loan increased by $700,000, the outcome was exactly what she hoped for: a dream home in one of Sydney’s most desirable coastal suburbs, on one of the area’s best streets.

10 Essential Tips for Buying a Home on Sydney's Northern Beaches

Watch the Walkthrough

Want to see how it works in real life? Watch our short Loom video walkthrough where I break down a real bridging loan scenario: from purchase, sale, loan structure, repayments, and exit strategies.

Watch: Bridging Loan Example in Action (quick walkthrough)

FAQ: Bridging Loans in Australia

What is a bridging loan in Australia?
A short-term loan secured against property to buy before you sell.

How quickly can I get one?
Usually within 3-5 business days.

What’s the loan term?
Typically 6–12 months.

Do I make repayments?
Most allow interest to be capitalised.

Can investors use them?
Yes – for both personal and business use.

Is a Bridging Loan Right for You?

If you need fast funding and a plan to repay, bridging finance can be a powerful tool.

Get started in two minutes.

Let’s Talk
Visit www.mortgages-plus.com.au or book a call today.