Bridging Loan Questions, Answered
The questions below are the ones that are hardest to find a straight answer to, grouped by where they come up. If you are still working out what a bridging loan is or how one works, start with what a bridging loan is and how bridging loans work instead, which cover those properly.
Deciding whether to use one
Is a bridging loan a good idea?
It depends on whether your problem is timing or affordability. A bridging loan is a good idea when you can afford the end position and only need to get from here to there, and a poor idea when the purchase is a stretch even after the sale. It is expensive money, so it is worth it when it buys you a transaction you would otherwise lose, and not worth it when it just postpones a decision.
The clearest test is this: write down what you will owe, against what, after your existing property sells. If that end position is comfortable, the bridge is doing its job. If it is not, the bridge is not the problem.
Is it worth getting a bridging loan?
Usually yes if the alternative is losing a property you want, selling under pressure, or paying to move twice. Usually no if you have not listed yet, have no agent appointed, and are working from an optimistic estimate of what your place is worth.
The cost is easier to judge once you have modelled it. The bridging loan calculator will give you a figure in a couple of minutes, and costs and fees sets out everything that goes into it.
What are the risks of a bridging loan?
Four, in the order they tend to bite.
-
Your property sells for less than you expected. The loan does not shrink to match. You settle the difference in cash or refinance the shortfall.
-
It sells later than you expected. Interest keeps accruing, usually capitalising, so the balance grows while you wait. An extension is often possible but is not guaranteed and is not free.
-
The facility ends before your exit does. This is the serious one. A short-term loan that cannot be repaid on time sits against a property you own, at a short-term rate.
-
The total cost is more than the rate suggested. Establishment and legal fees, valuation, and any minimum interest period all sit on top.
None of these are arguments against bridging finance. They are arguments for a dated, evidenced exit rather than an intended one.
Am I eligible for a bridging loan?
The three things that decide it are equity in a property, a purpose a lender will fund, and an exit that repays the loan. Income matters far less than it does for a bank loan, which is why self-employed borrowers and people between financials are often straightforward here. Full criteria, including the situations that do not qualify, are on who we help.
Can I get a bridging loan with bad credit?
Often yes, because assessment is weighted towards the security and the exit rather than your credit file. Defaults, arrears and a previous decline are not automatic disqualifiers. What matters is whether the reason behind them is understood and whether it affects the exit.
Expect a more conservative loan to value ratio and a higher rate than a clean file would attract. Borrowers declined elsewhere covers what appears on a credit file, for how long, and what can be done about it.
How much you can borrow
How much can I borrow with a bridging loan?
Start from what the security is worth, apply the lender's maximum loan to value ratio, and subtract what is already secured against it. What is left is your capacity.
Most bridging facilities are written between 65% and 75% LVR, with 75% the practical maximum and the lower end applying where the security is unusual, regional or slower to sell. On a $1,500,000 property with $700,000 owing, 75% gives capacity of $1,125,000 and therefore $425,000 of headroom. At 65% the same property gives $975,000 and $275,000. The gap between those two numbers is $150,000, which is why the LVR question is worth asking early.
Where two properties are involved the calculation runs against the combined position rather than either one alone. That is the difference between peak debt and end debt, both defined in the glossary.
Do you still need a deposit with a bridging loan?
Usually not a cash deposit, because the equity in your existing property does the same job. That is the main reason people use bridging finance rather than saving for a second deposit.
Two qualifications. You will still need cash for the transaction costs that are not lent against, which means stamp duty, legal fees, the valuation and the lender's establishment fee. And at auction you need the deposit available on the day the hammer falls, which is usually before a bridging facility has settled, so that timing has to be arranged in advance. Buying at auction covers how that is handled.
Can a bridging loan be used for a house deposit?
Yes, and it is a common structure. Where you have equity but not liquidity, a facility secured against your existing property can release the funds for a deposit on the next one, repaid when the first property sells. Releasing equity before selling sets out how it is structured.
Timing
How long can you have a bridging loan for?
Typically 1 to 12 months, with most facilities written for 3 to 6. The term is set by the exit, not by preference: a lender is agreeing to a date by which it expects to be repaid, so a longer term generally requires a reason rather than a request.
Extensions are often possible where the exit is still viable and the loan to value ratio still works. They are not automatic, and they usually carry a fee.
How long does it take to get a bridging loan?
These are two different questions and it is worth separating them.
-
An initial view on whether the scenario works: usually the same business day, once you have given the property value, what is owing and what you need.
-
Settlement: commonly 3 to 7 business days once valuation and documentation are complete. The valuation is the step most likely to move that date.
How do I get a bridging loan?
Five steps, and the first one takes about ten minutes.
-
Establish the numbers. Property value, existing debt, amount required, and the date it is needed by.
-
State the exit. What repays the loan and when. Specific and dated, not intended.
-
Initial assessment. A view on whether it is workable and roughly what it costs, usually same day.
-
Valuation and documentation. The step that determines the timetable.
-
Settlement. Commonly 3 to 7 business days from a complete file.
Bridging finance is not usually applied for directly with a lender the way a home loan is, because the panel that writes it is largely non-bank and specialist. Tell us the scenario and we will tell you whether it is workable before you spend anything on it.
What it costs
What interest is charged on a bridging loan?
As at Jan 2026, rates on our panel start from approximately 7.49% p.a. for consumer bridging and approximately 8.5% p.a. for business-purpose and commercial facilities. Where a facility actually prices depends on the loan to value ratio, the property type, the location and how strong the exit is.
Interest is normally capitalised rather than paid monthly, meaning it is added to the balance and settled when the loan is repaid. That preserves cash flow during the term, and it also means the balance grows if the exit runs late. Interest rates covers what moves them.
What is a minimum interest period, and why does it matter?
Some lenders charge a minimum number of months of interest regardless of when you repay. If a facility carries a six month minimum and you repay in three, you pay six. On a short bridge that single term can matter more than the headline rate, and it is one of the least asked questions in the whole product.
Ask for it in writing before you commit. For consumer bridging, interest is more commonly calculated daily with no penalty for early repayment, but this varies by lender.
Repaying it
How do you pay back a bridging loan?
In a single repayment at the end, not in instalments. The balance, including any capitalised interest and fees, is settled from whatever your exit is: the sale proceeds of the outgoing property, a refinance into longer-term finance, or the completion of a project.
This is the structural difference between a bridging loan and a mortgage. A mortgage is repaid gradually out of income. A bridge is repaid all at once out of an event.
What happens if my property does not sell in time?
The options, in the order they are usually considered, are extending the term, refinancing the balance into a longer facility, adjusting the price expectation, or selling a different asset. Which of those is available depends on your loan to value ratio at that point, because a lender's willingness to extend is mostly a function of how much equity is left.
This is why the loan to value ratio you start at matters beyond the amount you can borrow. Starting at 65% leaves room to absorb a lower sale price and a longer timeline. Starting at 75% leaves considerably less.
Can I repay a bridging loan early?
Yes. Whether it saves you anything depends on the minimum interest period described above. On a daily-interest facility with no minimum, repaying early stops the interest. On a facility with a six month minimum, it does not.
Security and structure
What can be used as security?
Residential property, investment property, commercial property and development sites are all standard. Vacant land is possible but tends to attract a lower loan to value ratio, because it is slower to sell and harder to value against comparable sales.
Location matters as much as type. Metropolitan and major regional security is straightforward. The further a property is from a market with regular comparable sales, the more conservative a lender becomes, and some will not take genuinely remote security at all. Locations covers how this varies by state.
Can more than one property be used as security?
Yes, and in a buy-before-you-sell transaction it is usually how it works: both the outgoing and incoming properties secure the facility until the first one sells. Additional security can also lift borrowing capacity where a single property does not support the amount required, and a second mortgage behind an existing first is another way to reach the same result.
The thing to ask about is partial discharge: what has to happen for a lender to release one property while continuing to hold the other. Get that in writing before settlement rather than at the point you need it.
Is a bridging loan regulated?
It depends on the purpose, not on the product. Loans for personal, domestic or household purposes fall under the National Consumer Credit Protection Act and carry responsible lending obligations. Loans for business or investment purposes are generally NCCP-exempt, which means fewer statutory protections and, in practice, more flexibility on structure.
A borrower should know which category their loan sits in before they sign, because it changes what protections apply.
A question that is not here
Most of what people actually need to know is specific to their property, their timing and their exit, which is not something a page can answer. Ask us directly, or work through the glossary and worked examples first.