A bridging loan is a short-term, interest only loan of up to 12 months that helps you buy a new home while giving you time to sell your first one (even if you still have a mortgage on it). Found the perfect new home but need to sell your existing one for the funds? This loan helps bridge the gap between buying that new home and finalising the sale of your old one.
Bridging Loan
Found your new home but haven’t sold your current one yet? You could consider a bridging loan if buying first suits you better.
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Benefits of our bridging loan
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Never miss 'the one'. Snap up that dream property when you find it. Then take time to sell your current one later to help get the price you want. A bridging loan could help you to make timely offers at inspections and auctions.
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Cover stamp duty & fees. You may be able to include upfront costs such as stamp duty and legal fees in your bridging loan (subject to available equity), helping manage your cash flow during the transition.
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Avoid the renting hassle. If you time it well, you could avoid the costs of having to rent a home in the period between the sale of your current property and settlement of your new home.
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| Loan type | Owner Occupier loan, standard variable for Interest Only |
| Total loan term | Up to 12 months |
| Loan size | Minimum $10,000 |
| Repayment frequency | No repayments during the bridging period. The interest charges are capitalised over the term of the loan. |
| Repayment type | Interest Only Capitalised |
| Extra repayments |
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| Redraw extra repayments |
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| Increase loan |
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Interest rate
| Variable rate | Comparison rate[#] |
| 9.42% p.a | 9.24% p.a |
Available for Owner Occupier purposes only for a period of 12 months. After the first 3 months interest rate increases by 1.00%. Not available for investment property purchases, debt consolidation or residential lending originated under family or company trusts.
Fees
| Fee | Cost |
| Lending establishment fee | $600 |
| Document processing fee | $100 |
| Monthly loan account fee | $8 |
| Loan discharge fee | $350 per settlement activity |
Other fees that might apply
| Fee | Cost |
| Missed payment fee | $15 |
Can the 12-month bridging loan term be extended?
Generally, your loan needs to be paid off in 12 months as it’s a short-term loan. You can speak to your lender about options to suit your circumstances if you are unable to sell your property within the 12-month loan term. An extension may be subject to credit criteria.
What’s a bridging loan with an end debt?
It’s when you’re upgrading to a higher value property and you need to borrow extra funds to buy the new property (and have a loan after you sell your current home). In this case we’ll need to set up two loans for you: a bridging loan and an ‘end debt’ loan.
The end debt is repaid under a standard home loan, Westpac offers the following range of home loan options to consider:
- Flexi First: Basic Variable Home Loan
- Rocket Loan: Variable Home Loan with Offset
- Fixed Rate Home Loan
All applicable fees and charges on the end debt will be dependent on the product selected.
What’s a bridging loan without end debt?
It’s when you’re downsizing to a property of lesser value and the funds from the sale of your existing property will be enough to cover the full bridging loan amount. All you’ll need to do is repay the balance of your bridging loan in full (along with any interest and fees) when your current property sells. This means you won’t have any ongoing bridging loan or an end debt.
What are the things to consider when choosing a bridging loan?
Here are some things to keep in mind.
- You’ll need to have a good idea of what your current home could sell for so you can manage the new loan repayments. It may help to get a free property valuation for your home from the local estate agents who are usually familiar with your local property market.
- Since it’s a short term 12-month loan, you need to be confident that your current property will sell within this period. It helps to get a good understanding of the market – since the longer it takes to sell your property, the more interest you’ll have to pay on your loan.
- There’s no redraw available on a bridging loan. If you make payments during the bridging loan period, you won’t be able to access those funds later.
To find out more, contact your lender.
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