How Do Bridging Loans Work

Frequently Asked Questions (FAQ)

How much can I borrow with a bridging loan?
Here are some common factors that generally determine the amount you can borrow so you don’t have to keep wondering, ‘How does a bridge loan work?’ or ‘How does a bridging loan work?’:

• The equity in your current home. Equity is the difference between your property’s value and what you owe on any mortgage or loan. The more equity you have, the higher the amount you could potentially borrow.
• End debt or peak debt. Your end debt is the total amount of debt you will have at the end of the bridging period, calculated by adding your existing mortgage balance to your new property's value plus any other accrued interest or fees.
• Serviceability. Some lenders may provide special conditions or restrictions depending on your property, its current state, or where it’s located. These special conditions may reflect the borrower’s individual circumstances as well. It’s best to consult with your lender if your circumstances require special considerations before submitting your loan application.

Online lenders can also be more flexible with their pricing with a bridging loan, meaning you could access more favourable solutions, such as no monthly repayments or waived early exit fees. For instance, Bridgit offers a no monthly repayments with no early exit fees (set-up costs are separate).

Investing in real estate can take some time to get used to, especially when faced with questions like, ‘How to apply for a bridging loan?’ or ‘How do bridging loans work?’ for the first time. At Bridgit, we will show you the benefits of bridge financing, making your journey to a new home simpler.

How do bridging loans differ from regular mortgages?
Generally speaking, bridging loans can be used for a variety of property types. As part of the answer to ‘How do bridging loans work?’, there is a difference between a commercial bridging loan and a residential bridging loan, each with a separate set of requirements.

That being said, how do bridging loans work for residential properties? Residential properties are the most common use for bridging loans, as they can help cover the financial gap between selling your current home and purchasing a new one, thus minimising the hassle and additional cost of signing a lease on a rental and multiple moving fees when selling first.

It’s always best to consult with a financial advisor or a specialist like Bridgit regarding what your loan terms mean for your financial future. Whether you’re a retiree seeking a change in lifestyle or a growing family seeking a larger home, we’re here to simplify real estate financing for you.

Bridgit: The Future of Bridging Loans in Australia
Among the vast landscape of Australian finance, Bridgit stands out among the many options available for people looking to move into a new home for various reasons. Established in 2021, Bridgit came to be in response to a lack of options regarding the topic of ‘bridging loans Australia’.

Since our launch, we have been providing a solution tailored for today’s homeowners looking to answer questions like, ‘How do bridging loans work?’ or ‘What is a bridging loan Australia?’ Our goal is to empower Australians like you to unlock the value of your property and purchase your dream home while waiting for your current property to sell.

Bridgit’s technology-oriented approach also aims to provide you with modern lending experiences by eliminating the tedium and long waits associated with traditional lending. As a result, homeowners no longer need to put their dreams on hold and can instead confidently take the next step in their property journey.

From favourable bridging loan interest rates to the opportunity of converting your property’s existing equity into liquid funds, Bridgit is here to help you move forward with your dream home even while it’s still on the market.

Don’t miss the opportunity to claim your dream home by waiting too long. The answer to ‘How do bridging loans work?’ is right here at Bridgit; apply for a bridging loan with us today!