Bridging Loans
Bridging Loans can be an important part of a broader borrowing strategy. At Derwent Finance, we help Australian borrowers understand their options, compare suitable lenders from our panel and structure finance around the outcome they are trying to achieve — not simply around a headline rate.
This page is for people researching bridging loans and related options such as bridging finance, bridging home loan, buy before sell home loan. It explains how this type of finance generally works, who it may suit, the issues that can affect lender approval, common scenarios and the steps involved from initial review through to settlement or funding.
Every application is assessed on its own facts. Property or asset value, income, expenses, existing debts, credit conduct, entity structure and lender policy can all change the outcome. The information below is general and is designed to help you ask better questions before choosing a lender or loan structure.
Who This Is For
- Homeowners upgrading
- Downsizers
- Families relocating interstate
- Borrowers with significant equity
- Buyers who find a new property before selling their current one
Bridging finance connects the purchase and the sale
A bridging loan can allow an eligible homeowner to buy a new property before the current property has sold. During the overlap, the lender calculates the maximum or “peak” debt across the existing property, new purchase and related costs. Once the existing home is sold, the sale proceeds reduce the debt to the planned “end debt”.
The exit strategy is central to approval
The lender needs a credible plan for selling the existing property within its allowed bridging period. Expected sale value, time on market, current mortgage and selling costs can all affect the calculation. A conservative sale estimate can help avoid relying on proceeds that may not eventuate.
Repayments during the bridge differ by lender
Some lenders require ongoing interest payments while others may allow interest to be capitalised for a period, subject to policy. Capitalising interest increases the debt, so borrowers should understand both the peak position and the repayment they expect to hold after the sale.
Our Approach
How We Can Help
We start by understanding the full scenario and what you want the finance to achieve. Depending on the transaction, our work can include:
- Estimate current property value and mortgage
- Review the new purchase price and costs
- Calculate peak debt and expected end debt
- Assess lender servicing requirements
- Compare bridging periods and lender structures
- Discuss capitalised-interest or repayment requirements
- Manage the new purchase and later sale reduction
Real Situations
Common Scenarios
Bridging finance is most often used where the timing of a purchase and sale does not line up. Common situations include:
- Buying the next family home before selling
- Downsizing
- Interstate relocation
- Buying a rare property
- Existing property already listed for sale
Step by Step
How the Process Works
Initial strategy call and fact-find
Review relevant income, expenses, liabilities, assets and supporting documents
Identify the main lending objective and any policy constraints
Compare suitable lenders and structures
Present the recommended option, expected repayments, fees and key conditions
Prepare and lodge the application after you decide to proceed
Manage lender questions, valuation or asset checks and approval conditions
Complete documents and settlement or funding
Review the lending again when your circumstances or lender pricing change
Why Derwent Finance?
A loan approval is only one part of the process. Derwent Finance focuses on understanding the objective, comparing lender policy and helping manage the application from initial strategy through to settlement. We assist borrowers across Australia with home loans, refinancing, investment, construction, self-employed, complex, commercial and business finance scenarios.
Where the best outcome is to keep an existing loan or wait until the borrower’s position changes, the recommendation should reflect that rather than moving a loan simply to create a transaction.
Ready to understand your options? Book a Strategy Call with Derwent Finance. We can review your current position, what you want to achieve and which lending pathways may be available.
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General information only. Credit assistance is subject to individual circumstances and lender criteria. Interest rates, fees, lender policy, government schemes and eligibility can change without notice. This website does not provide legal, taxation or financial advice. Content last reviewed: August 2026.
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