fbpx
1300 416 700
Home Loan Types The Team Calculators Learning Our Difference Get in Touch

Bridging Loans

What is it?

A bridging loan is a loan that serves as a bridge, enabling the purchase of a new property before your existing property is sold.

Our short explainer video will guide you through the process of Bridging Loans.

How does it work?

You continue making repayments as normal on the original loan only, until that property is sold. This means your monthly loan repayments remain the same even though you have two properties.

The bridging loan size is calculated by adding the value of your new home to your existing mortgage then subtracting the likely sale price of your existing home.

This is referred to as your ‘ongoing balance’ and represents the principal of your bridging loan.

Bridging loans are interest-only, so during the bridging period, interest will be compounded monthly on your ongoing balance at the standard variable rate. The interest repayments will then be added to the ongoing balance when you sell your house, and this amount becomes the mortgage on the new property.

What are the risks

  • You may overestimate the likely sale price of your existing property, and it could fall short of the amount required to pay out the bridging loan.
  • You need to pay for application fees.
  • You may not sell within the bridging period, which could result in having to service both property loans.
  • The longer you take to sell your existing home, the higher your interest bill, and hence your new mortgage, will be.

If structured correctly, with realistic time frames and price estimates, a bridging loan can ease the pressure of matching up settlement dates and give you time to sell your existing property whilst securing your new property.

Learning

Be Informed and up-to-date

First Home Buyers
Guides
Investing
Mortgage Basics

How to boost your credit score this year

17 Jan 2022
Guides
Refinancing

Is it time for a home loan health check?

17 Jan 2022
Market Trends
News

Are We Nearing the Peak of the Property Boom?

17 Dec 2021
Market Trends
News

Property Prices Have Grown at the Third-Fastest Rate Since 1880

17 Dec 2021
Purchasing
Refinancing

Intelligent Credit at Shore Private

3 Dec 2021
Investing

Is Now The Right Time To Fix Your Interest Rate?

19 Nov 2021
Investing

Property Rents Are Rising At Their Fastest Annual Rate Since 2008

19 Nov 2021
Guides

Why a Good Loan is About More Than Just it’...

21 Oct 2021
Market Trends

Is a Home Loan Crackdown Coming?

21 Oct 2021
Guides

How to Best Handle Yourself in a Competitive Market

30 Sep 2021
Market Trends
News

Surge in Spring Availabilities Fade

30 Sep 2021
Mortgage Basics

Mortgage Pre-Approval 101: Are You Locked Into One?

13 Aug 2021
News

How the Sydney Lockdown Will Affect the Property Market and ...

13 Aug 2021
Purchasing
Refinancing

Shore Private – Our New White Label Product

31 Jul 2021
Guides
Purchasing

NSW Property Tax Proposal – All you Need to Know

19 Jul 2021

AUSTRALIA'S NUMBER #1 BROKERAGE

Take comfort in the fact that we are number one where it matters most.

#1 Independent Mortgage Brokerage

Being Australia’s #1 independent brokerage, we provide you with the scale, strength, and experience to fight for the best deal and acquire it for you.

#1 ‘Most Likely to Be Recommended’ by Real Estate Agents

Excellence recognises excellence. Master real estate agents who know the industry, need timely finance solutions, and five-star service for their clients all recommend the Shore expertise.

#1 Most Loved Mortgage Brokerage in Sydney

Shore takes pride in having the highest customer feedback scores in the industry, based on real customer data.

Customer Reviews

Hear from our happy customers