Upgrading is more complex than most people expect. Bridging finance, equity, stamp duty and settlement timing all need to line up. Here is the straightforward guide to getting it right.
Most bridging loans require your existing property to sell within 6–12 months. If it takes longer, you face ongoing interest on two loans simultaneously — which can be very expensive. Having a realistic appraisal and a clear selling strategy before committing to a purchase is essential.
It depends on your risk tolerance and market conditions. Selling first gives you certainty on price and equity. Buying first gives you continuity but requires bridging finance. In a rising market, buying first can make financial sense. In a flat or falling market, selling first is safer. A specialist can model both.
A bridging loan is a short-term loan (usually 6–12 months) that covers the gap between buying your new property and selling your old one. You temporarily have two properties as security. Once your existing home sells, the bridging loan is repaid from the proceeds.
You need enough equity to cover the deposit on your new property (typically 10–20%), plus stamp duty, conveyancing and agent fees on your sale. Get a current market appraisal and subtract your outstanding loan balance and selling costs to find your real available equity.
Yes — but sellers and agents do not always accept this, particularly in competitive markets. Bridging finance removes the need for a subject-to-sale clause entirely, which can make your offer more attractive.
This is the bridging finance scenario. Your lender holds both properties as security and advances funds to complete your new purchase. Once the old home sells, the bridging loan reduces to just the new loan balance.
Everything above is general information. When you’re ready to act on your situation, a vetted home loan specialist comparing 30–60 lenders will model your exact numbers — free to you, no cost and no obligation.
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