If you would like to buy or build a new home before selling your old one, bridging finance could provide the funds you need to secure your new home. Bridging finance allows you to use the equity in your existing home to finance your new one.
- Purchase or build a new home even if you haven’t settled on your existing property
- No need to rent – you can stay in your existing home until your new home is ready to move in to
- Choose between principle and interest or interest only repayments
- Use the proceeds from the sale of your home to reduce the balance of your bridging loan following settlement
- Bridging loans typically don’t have the same features or flexibility as other variable rate loans
- Taking out another debt in addition to an existing mortgage means you will have additional interest repayments costs
- You may overestimate the likely sale price of your existing property and therefore fall short of the amount required to pay down the bridging loan
- The main risk is that your existing property doesn’t sell with the bridging period which may result in an increase to the interest charges on your loans.
Download our ‘Which Home Loan’ brochure (pdf) for more tips and general information.