Bridging Loan vs Home Loan
Bridging loans and home loans both use property as security but they're built for very different jobs. Here's the side-by-side comparison so you can pick the right one.
What's the difference between a bridging loan and a home loan?
A home loan is a 25–30 year facility designed for long-term ownership. A bridging loan is a 1–24 month facility designed to fund a property quickly while you sell another or arrange long-term finance. Bridging is faster but more expensive per month; home loans are slower but cheaper over time.
Bridging Loan or Home Loan — Which Wins?
Get a side-by-side comparison from a specialist.
Side-by-Side Comparison
| Feature | Bridging Loan | Home Loan |
|---|---|---|
| Term | 1–24 months | 25–30 years |
| Approval time | 3–10 business days | 2–6 weeks |
| Typical rate | 7–12% p.a. | 5.5–7% p.a. |
| Repayments | Capitalised or monthly | Monthly P&I |
| Exit fees | Usually none after min term | Often none (variable) |
| Best for | Buy-before-sell, auctions | Long-term ownership |
When to Use Each
Use a bridging loan when: you need funds in days not weeks, you have a clear exit (sale or refinance), or you can't qualify for a home loan on both properties simultaneously.
Use a home loan when: you're holding the property for the long term, you don't have a near-term exit, and you can wait the few weeks it takes to settle.
Total Cost Example
On a $500,000 bridge held for 6 months at 9.5% p.a., total interest is roughly $23,750 — well under 5% of the property value. The same $500,000 on a 30-year home loan at 6.5% would cost over $640,000 in interest over the life of the loan. Different products, different jobs.
Common Questions
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