Bridging Loan Guides
Guides to how bridging finance works in Australia, organised by subject rather than by date. If you are researching a specific decision, the sections below will get you there faster than the article feed.
These are explanatory guides. The pages they link to are where each subject is covered in full, and a conversation with a broker is where your own numbers get worked out.
Start here
Three pages cover most of what a first-time bridging borrower needs, in order.
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What a bridging loan is, and when one is the right tool
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How bridging loans work, including peak debt, end debt and how a lender assesses an exit
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The glossary, if a term in any of these guides is unfamiliar
To put numbers to your own position before reading further, the bridging loan calculator takes about two minutes.
The four decisions, in the order they come up
Most of these guides answer one question each. It is easier to find the right one if you know where you are in the sequence, because bridging decisions arrive in a fairly reliable order.
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Is bridging finance the right tool at all? It solves a timing problem. It does not solve an affordability problem, and it is an expensive way to find that out. The comparison guides below are the ones to read first.
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What repays it, and when? A sale, a refinance, a settlement. This is the question a lender cares about most, and it determines whether you are looking at open or closed bridging and what rate you are offered.
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How much can you borrow? A function of what your security is worth, what is already secured against it, and the lender's maximum loan to value ratio. Not a function of your income, which is the main way bridging assessment differs from bank lending.
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What does the whole facility cost? Not the rate. The rate, plus establishment and legal fees, plus valuation, plus any minimum interest period, plus what happens if the exit runs late.
Borrowers who get an unwelcome surprise have almost always skipped straight to question three.
What bridging finance costs
The most common reason a bridging transaction disappoints someone is that they priced the interest rate and not the facility. Total cost includes establishment and legal fees, valuation, the lender's minimum interest period and, on most facilities, interest capitalised rather than paid monthly.
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Bridging loan costs and fees, the full breakdown
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Bridging loan interest rates and what moves them
Buying before you sell
The most common bridging scenario, and the one with the most ways to structure it.
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Buying before you sell, the main guide
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Buying at auction, where the deposit is due on the fall of the hammer
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Covering a settlement timing gap, including shortfalls
Bridging finance compared with the alternatives
A bridging loan is not always the right answer, and these compare it honestly with what else is available.
Structures and terms
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Second mortgage facilities behind an existing first mortgage
Guides by borrower type
Eligibility differs considerably depending on who you are and what the loan is for. Full criteria are on who we help.
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Developers, including site acquisition and residual stock, plus a detailed guide for property developers
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Business owners borrowing for a business purpose
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Self-employed borrowers without current financials
Guides by location
State property law changes how a bridging transaction runs more than most borrowers expect. Cooling-off periods, auction rules and vendor disclosure obligations all differ, and they determine how much time a facility actually has to work with.
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Sydney and New South Wales, including section 66W certificates
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Melbourne and Victoria, including section 32 statements
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Brisbane and Queensland, including the seller disclosure scheme
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Perth and Western Australia, where there is no statutory cooling-off period
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Adelaide and South Australia, including Form 1
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All locations, including the ACT, Tasmania and the Northern Territory
What these guides cannot tell you
Everything here is general information. It cannot tell you what a lender will actually offer against your property, because that depends on the valuation, the strength of your exit and which lender the scenario suits. Two borrowers with identical properties routinely receive different answers.
What these guides are good for is arriving at that conversation knowing which questions matter, so that the answers mean something.
When reading stops being useful
At some point the general answer runs out and you need a specific one about your property, your timing and your exit. That takes a short conversation rather than another guide.
Get in touch when you reach that point, or work through the frequently asked questions if you would rather keep reading.
