Bridging loans in Australia: buy before you sell with confidence

In Australia’s fast-moving property market, the right home doesn’t always wait for your current one to sell. For high-income professionals and families ready to upgrade or relocate, timing can be a major challenge. That’s where a bridging loan becomes a powerful solution.

What is a bridging loan?

A bridging loan (or bridging finance) is a short-term loan that helps you buy a new property before selling your current one. It’s designed to “bridge” the financial gap, giving you access to funds for your next purchase without rushing your sale or moving into temporary accommodation.

These loans are typically interest-only and are repaid once your current property is sold. Many lenders across Australia offer bridging loans as part of their mortgage suite, though terms and eligibility vary.

How does a bridging loan work?

When applying for a bridging loan in Australia, lenders assess your total financial position—including:

• Your existing mortgage balance
• The purchase price of your new property
• Selling price estimate of your current home
• Associated costs (e.g. stamp duty, legal fees)

This is used to calculate your peak debt, which is the total amount you owe during the bridging period. Once your existing home sells, the loan is reduced and converted to a standard home loan (or paid off entirely, if you’re downsizing).

Two types of bridging loans

1. Closed bridging loan – You have a confirmed sale date for your current property. This option usually offers more favourable terms.
2. Open bridging loan – Your property is yet to sell, which carries more risk and may result in higher interest rates or stricter lending criteria.

Understanding which one suits your situation is key to ensuring your property bridging loan works for—not against—you.

When bridging finance makes sense

Bridging loans can be ideal if you:

• Want to buy before you sell to secure your dream home
• Need fast settlement (e.g. after winning at auction)
• Prefer to avoid renting or moving twice
• Are a professional family upgrading or relocating
• Have strong equity and stable income

For time-poor professionals or families with significant assets, short-term property finance solutions like bridging loans offer freedom and flexibility.

Pros and Cons of bridging loans

Pros:

• Buy your next home without selling first
• Avoid rushed decisions or poorly timed sales
• Present your current home properly for maximum value
• Stay in control of your timeline and lifestyle

Cons:

• You carry two debts temporarily
• Interest rates may be slightly higher than standard mortgages
• More complex structure than traditional loans
• Valuations and lender conditions can be stricter

Are bridging loans right for high-income buyers?

For buyers in a strong financial position—particularly those with significant equity—bridging loans can be an efficient way to move forward without disruption.

If you’re a busy professional or a family planning your next move, we can help assess whether a bridging loan mortgage suits your situation. With access to a wide panel of lenders across Australia, we’ll tailor a solution that aligns with your goals.

Speak to a Bridging Loan Specialist

We provide expert mortgage advice for professionals and families Australia-wide. Whether you’re financing a new home before selling or just exploring your options, we’re here to help with personalised guidance and clarity.

Book a consultation today and get peace of mind knowing your next move is financially sound.