Considering a bridging loan while you buy or sell? Here are clear answers to the bridging loan questions sellers ask us most, covering what bridging finance is, how it works, how long it takes, what it costs, and who it’s for.
Bridging finance is a short-term funding solution designed to cover the gap between two property transactions. It lets you access the equity tied up in your current home before it sells, so you can fund a new purchase, cover pre-sale costs, or manage transition expenses without waiting for settlement.
The term gets used loosely. In the traditional sense, a bridging loan is a bank product: a secured short-term debt facility that helps buyers purchase a new property before their existing one sells. The bank essentially lends against both properties during the gap period. These products typically come with interest charged during the loan term, stricter serviceability requirements, and a relatively rigid approval process.
The core principle is the same regardless of the product: your property equity does the work now, and repayment happens when you sell.
The process varies by lender, but the core mechanics follow the same logic. You apply before or during your sale campaign. The lender assesses the value of your property and how far along you are in the selling process. Funds are released to cover approved costs, and everything is repaid from your sale proceeds at settlement.
At Property Credit, the process works like this:
Bridging finance is generally faster to arrange than a standard home loan, because the approval is focused on the short-term exit (your property sale) rather than long-term serviceability. That said, “fast” means different things at different lenders.
Property Credit offers fast approvals across Australia and New Zealand, with funding available promptly once approved. The application process is straightforward, and because we’re assessing equity rather than running a traditional loan assessment, the back-and-forth is minimal.
Property Credit facilities have no minimum term and a maximum term of six months. That window gives most sellers more than enough time to complete their campaign, regardless of market conditions.
Costs vary significantly depending on the lender, the structure of the facility, the loan term, and your individual circumstances. Traditional bank bridging loans typically charge interest on the outstanding balance during the loan term, which can add up quickly if your property takes longer to sell than expected.
Property Credit’s approach is structured differently. There’s nothing to pay until your property settles. Rather than accruing interest during the campaign, your total cost is based on the funds accessed and confirmed before you approve the facility. Use our bridging loan calculator for a figure specific to your situation.
The most common use case for bridging finance is buying before you sell: using equity from your current home to secure a new property before your existing one settles. But there’s a broader set of property-related uses that don’t get as much attention.
For sellers preparing to go to market, bridging finance can cover:
Your property’s equity determines your available facility, and the stage of your sale process determines how much you can access.
Additional questions sellers ask us regularly.
Deposit requirements for bridging loans vary depending on the lender and type of facility. Traditional bank products often require equity in the new property or other collateral.
Property Credit doesn’t require a cash deposit. Eligibility is based on an equity-based assessment of the property you’re selling, with access to funds determined by your equity and the stage of your sale process. No upfront cash required.
Bridging loan terms vary significantly. Bank products often have set minimum and maximum terms, with interest accruing throughout. Some require evidence of a purchase contract on the new property before approval.
Property Credit offers flexible terms with no minimum duration and a maximum of six months. If your property sells in four weeks, you repay in four weeks. If it takes five months, you have that time available. There’s no pressure to sell faster than the market supports.
Eligibility for bridging loans varies by lender. Most traditional bank products require proof of serviceability, i.e., that you can service both mortgages if the sale takes longer than expected.
At Property Credit, eligibility is based on your property equity and your stage in the selling process. Equity-based assessment means income and employment are not the primary factors — and if you’ve had credit issues in the past, that isn’t the starting point either. The equity in your property is.
For sellers who need to fund pre-sale work or secure their next property before settlement, the answer is usually yes. The alternative is waiting, and waiting has its own costs: delayed campaigns, softer seasonal conditions, lost momentum.
It’s worth running the numbers rather than guessing. Use our bridging loan calculator for a figure specific to your situation.
Once your property sells and settlement takes place, your bridging loan facility is repaid directly from the sale proceeds. You don’t need to arrange a separate payment or transfer funds yourself. Nothing remains after settlement.
This is the structure that makes it practical for asset-rich sellers: all the benefit of accessing equity now, with a single clean repayment at the moment you actually have the cash to cover it.
Nothing to pay until settlement. Fast approvals and funding, based on an equity-based assessment.
Visit property.credit for more information on our services or you can contact us on 1300 829 536 (au) or 03 668 2144 (nz).
This article is for general information purposes only and is not intended as financial product advice. Consider seeking independent financial advice that relates to your individual circumstances.
*All loans are subject to responsible lending inquiries, affordability tests apply, terms, conditions and credit criteria apply
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