What Is a Bridging Loan?

A bridging loan is short-term property finance that gives you access to funds now and is repaid when your existing property sells or you refinance — usually within 1 to 24 months.

What is a bridging loan in one sentence?

A bridging loan is a short-term, property-secured loan that 'bridges' the gap between buying a new property and selling an existing one — typically funded in days, repaid in months, and secured by the equity in your existing or new property.

A bridging loan (also called bridging finance, a bridge loan or a swing loan) is a short-term mortgage taken out for a few weeks to a couple of years. The lender uses your property — either the one you're buying, the one you're selling, or both — as security and advances you the funds you need to complete a purchase before your existing property has settled.

In Australia, bridging loans are most commonly used by homeowners moving from one property to another, by buyers at auction, and by investors and developers who need to act faster than a traditional mortgage allows.

• You've found your next home but haven't sold the current one.
• You bought at auction and need unconditional funds in 30 days.
• Your sale and purchase settlements don't line up.
• You need short-term funds for renovations before refinancing.
• You're a developer covering site acquisition while arranging long-term finance.

A standard home loan is a 25–30 year facility focused on affordability. A bridging loan is a 1–24 month facility focused on speed and the strength of your exit (typically the sale of an existing property). Interest is usually higher per month, but the total cost is small because the loan term is short.