Open vs Closed Bridging Loans

The single biggest decision when structuring a bridging loan is whether to take it open or closed. The difference comes down to one thing: have you signed a contract of sale on your existing property?

What's the difference between an open and closed bridging loan?

A closed bridging loan has a confirmed exit date (you've signed a contract of sale or refinance offer). An open bridging loan has no fixed exit date — you're still marketing the property. Closed bridging is cheaper and easier to approve; open bridging gives you more flexibility.

Closed bridging is for borrowers who already have a signed, unconditional contract of sale on their existing property. The lender knows exactly when and for how much the loan will be repaid, so they take on minimal risk.

• Lower interest rate (typically 1–2% p.a. cheaper than open)
• Faster approval — usually 48 hours
• Best for settlement-gap scenarios
• Requires a signed, unconditional contract of sale

Open bridging is for borrowers who haven't sold yet — perhaps the property is just being listed, or it's at auction soon. The lender takes on more risk, so the rate is higher, but you get to buy without rushing your sale.

• Slightly higher interest rate
• Term typically 6–12 months to give your sale time
• Best for buy-before-you-sell, auction buyers
• No contract of sale required upfront

If you can hold off until you have a signed sale contract, take closed bridging. If your purchase deadline is sooner than your likely sale date, take open — the slightly higher rate is well worth not losing the property you want to buy.