Welcome to the Bridgit Blueprint, your monthly dose of practical tools to help you tap into the power of bridging finance as a broker.
This month, Stephen Doyle, Head of Distribution at Bridgit, tackles some common cost-related misconceptions and highlights the true value of bridging finance, from saving on rental costs to enabling your clients to jump on the best property opportunities.
While many brokers we’ve spoken with see the value in bridging finance, some also believe that bridging loans are ‘expensive’ — but our data says otherwise.
Several factors have fuelled this perception, from growing interest rates in recent years to private lenders charging higher rates to customers in vulnerable positions.
In reality, bridging loans give your clients a viable alternative to the traditional approach of selling first and buying second, meaning homeowners can save on temporary living and storage costs and capitalise on the best opportunities.
Plus, the best bridging lenders offer value-adding benefits like no monthly repayments, competitive interest rates, and no double mortgages — giving clients the unique flexibility of buying and selling on their terms.
Remember, Bridging finance shouldn’t just be compared based on interest rates alone, but on the overall value and outcomes they provide to homeowners.
1. Avoid temporary living costs
Did you know an average of nine weeks pass between selling and buying a new home?
Our research* found 52% of movers needed to fork out for a temporary home while waiting to buy their next property, with 26% needing to move into temporary accommodation twice. Aussie homeowners spent an average of $8,300 on temporary living arrangements, with some costs exceeding $40,000.
With bridging, homeowners can secure and move into their next property and sell on their own terms, without the need to navigate short-term accommodation, double mortgages or the rental market.
2. Capitalise on the best property opportunities
In a competitive property market timing is everything. Bridging finance gives your clients the flexibility to act quickly if they’ve already found their perfect property and want to jump on the opportunity.
On the other hand, our research found that 70% of Australians feel pressured to buy quickly after selling, and 20% felt they didn't find their perfect home. In this instance, Bridging can provide breathing room for clients who want to take their time to find the perfect home without feeling rushed or pressured to compromise.
3. Access equity to maximise a home’s value
Bridging finance allows homeowners to tap into their home’s equity to conduct value-adding renovations and improvements prior to sale, helping to increase their home's value prior to sale.
Plus, being able to sell on their own terms means homeowners can time the market to their advantage and list their property at the right time to attract the best sale price possible.
4. Added flexibility on settlement dates:
Navigating two property transactions at once can pose added complexity and risk, particularly as 11% of settlements in Australia are delayed. This could mean a seller could lose a deposit or face a penalty if their sale unexpectedly falls through at the last minute.
Bridging finance eliminates this pressure, allowing clients to manage one transaction at a time, reducing stress and ensuring a smoother process.
Bridgit’s Head of Distribution, Stephen Doyle, shares how Bridgit’s bridging loan and pricing structure adds value to brokers and clients with a range of competitive advantages, including:
Speed and accessibility
Whether your client is a downsizer, upsizer, retiree or investor, Bridgit’s process is designed for speed and accessibility. With a simple 5-minute online application and 24-hour approvals, your clients can move quickly on property opportunities without the fear of missing settlement dates.
Lower interest rates
Bridgit’s bridging loans are a perfect short-term lending solution, offering a variable intro rate of 8.49% for the first six months of the loan, recently lowered to offer a 1% discount. Our set-up fees are competitive at just 0.79%, and we don’t charge any early exit fees if your customer wants to settle earlier.
No monthly payments and no repayments until maturity
We calculate interest upfront and include it in the total loan, meaning there are no monthly repayments during the loan term. This reduces financial pressure, allowing clients to repay in one lump sum after selling their home. They can also tap into their home’s equity for renovations without worrying about monthly fees.
Increased broker commission
Not only do we allow your clients to buy on their terms with no double mortgages, no missed opportunities and no temporary living costs, but we’ve recently increased our broker commission to 0.35% to reward you for your hard work.
Schedule a call with our team to learn more about Bridging finance today.
*Source: A 2024 research study commissioned by Bridgit of 255 active Australian residential mortgage brokers.
^Source: Bridgit’s Australian Home Loan Customer Report, speaking with 1,011 sellers from June to July 2022.
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