Bridging Loans — Buy Before You Sell
Found your dream home but haven't sold your current one yet? A bridging loan lets you secure the new property now and pay it down once your existing home sells. We help Adelaide families navigate the numbers so you can move with confidence.
What Is a Bridging Loan?
A bridging loan is a short-term financing arrangement that lets you purchase a new property before selling your existing one. Instead of waiting for your current home to sell (and potentially missing out on the home you really want), a bridging loan covers the gap.
During the bridging period, the lender combines both loans — your existing mortgage and the new purchase — into what is known as the "peak debt". This is the maximum amount you owe at any one time. Once your current property sells, the sale proceeds pay down a large chunk, leaving you with just the "end debt" — the ongoing mortgage on your new home.
The Buy-First, Sell-Later Approach
Think of it as a temporary overlap. You own both properties for a short window — typically 6 to 12 months — while your current home is on the market. The lender is comfortable with this because they know sale proceeds are coming and will significantly reduce the total debt.
When Do People Use Bridging Finance?
Bridging loans suit specific situations where timing and opportunity align
Found the Perfect Home
You have spotted a property that ticks every box — right suburb, right size, right price — but your current home is not yet on the market. A bridging loan lets you lock it in before someone else does.
Avoiding a Rushed Sale
Selling under pressure usually means accepting a lower price. A bridging loan gives you breathing room to sell your current home at the right price rather than the first offer that comes along.
Growing Families
Your family has outgrown the current home and you need more space now — not in six months when your place finally sells. A bridging loan lets you upgrade on your timeline, not the market's.
One Move, Not Two
Without a bridging loan, you might have to sell first, move into temporary accommodation, then move again into the new place. A bridging loan means you move directly from your old home to the new one — one move, done.
How Bridging Loans Work (In Simple Terms)
Here is how a lender typically assesses and structures a bridging loan
The bank works out your peak debt
This is the total of your existing mortgage balance plus the full purchase price of the new property (including costs). It is the maximum you will owe at the same time.
They estimate your current home's sale value
The lender will use a valuation or market appraisal to estimate what your existing property will sell for. This figure drives the entire calculation.
They check the end loan LVR
Once your current home sells, the remaining loan-to-value ratio (LVR) on the new property needs to be within acceptable limits — usually 80% or less to avoid lenders mortgage insurance.
During the bridging period: interest-only or capitalised
While you own both properties, you typically either make interest-only payments on the bridging portion or the interest is capitalised (added to the loan balance). This keeps your cash flow manageable during the overlap.
When your home sells: proceeds pay down the debt
The sale proceeds from your existing property are applied directly to the loan, eliminating the bridging component. You are left with a standard home loan on the new property at the agreed end-debt amount.
Pros and Cons of Bridging Loans
Like any financial product, bridging loans have clear benefits and considerations
Advantages
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Buy with confidence
Secure the property you love without waiting for your sale to go through.
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Avoid a rushed sale
Sell on your terms and timeline, maximising your sale price.
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Only one move
Move directly from your old home into the new one — no temporary rental or storage.
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Dream home timing
Great properties do not wait. A bridging loan means you do not miss out.
Things to Consider
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Interest buildup risk
If capitalised interest accumulates over many months, it adds to your total cost.
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Realistic sale estimate needed
If your home sells for less than expected, your end debt will be higher than planned.
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Potentially higher rates
Some lenders charge a premium on the bridging portion compared to standard home loan rates.
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Must still qualify
Lenders assess your ability to service the peak debt, so you need sufficient income and equity.
A Simple Example
Your Current Home
Your New Home
Peak Debt (Both Loans Combined)
~$1,240,000
$300k existing + $940k new purchase
End Debt (After Sale)
~$540,000
$1,240k peak - $700k sale proceeds
* Figures are illustrative only. Actual amounts depend on lender policies, valuations, and individual circumstances.
How Jain Home Loans Approaches It
We take a measured, step-by-step approach to every bridging loan enquiry
Start with the Big Picture
We map out your full financial position — equity, income, debts, timeline — before looking at any specific loan product.
Model Different Options
We run the numbers on bridging vs selling first vs subject-to-sale, so you can see the cost and risk of each path side by side.
Choose Lenders Carefully
Not all lenders offer competitive bridging terms. We match you with the right lender based on rate, flexibility, and bridging period length.
Coordinate the Moving Parts
Settlement dates, listing timelines, valuation bookings — we help coordinate everything so the process runs smoothly from start to finish.
Bridging Loan FAQs
Quick answers to the questions we hear most often
Is a Bridging Loan Right for You?
A bridging loan can be a smart move if you have strong equity in your current home, a realistic view of its market value, and a clear plan for selling within the bridging period. It works best when the cost of not acting — missing out on the right property — outweighs the short-term cost of carrying two loans.
If you are not sure whether bridging finance is the right path, that is exactly where we come in. We will look at your numbers, talk through the alternatives, and give you an honest assessment — even if the answer is "bridging is not the best fit right now."
No cost, no obligation. Our initial conversation is free. We will tell you where you stand and what your options are.
Ready to Explore Bridging Finance?
Let us look at your situation and work out if a bridging loan makes sense. No pressure, no jargon — just honest advice.