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Short Term Mortgages

Bridgit’s Expert Guide On Short Term Mortgages

In the property financing landscape, you may have encountered options such as short term mortgages, traditional mortgages, and bridging loans.

This article from Bridgit helps you understand the differences between these types of loans and know which option might be suitable for your unique situation, especially if you’re looking to move to a new property before selling your current home.

Read on below for more information.

Long term vs short term mortgages: what’s the difference?

A mortgage is a type of loan used to finance the purchase of real estate, such as a house.

Traditional long term mortgages generally span fifteen to thirty years.

On the other hand, short term mortgages have a shorter repayment period compared to traditional mortgages. Though the specific duration may vary from lender to lender, the terms are typically around ten or fifteen years.

At Bridgit, we offer you another option. We specialise in bridging loans, a specific form of short term financing that enables homeowners to transition to a new property before selling their current one.

What are bridging loans?

A bridging loan gives you the means to acquire a new house before selling the old one. You pay for the purchase using the loan amount, and once you have sold your old home, you pay off the bridging loan from the proceeds of the sale.

Bridging loans aim to empower you, as a homeowner, to sell your property on your own terms. You won’t have to sell your current property before buying a new one. Instead, you can tap into your current property’s equity to buy the new house, and you can sell the old one afterwards.

At Bridgit, our bridge loans come with no monthly fees, annual fees, or early repayment fees. You also won’t have to worry about paying two mortgages at once since we will refinance your existing mortgage over to us.

Disclaimer: Unless otherwise specified, the opinions expressed in this article are strictly for general informational purposes only and should not be taken as financial advice or recommendations. Any views are subject to change without notice at any time.
Owner-occupied
Investment

Residential Bridging Loan

Buy now, sell later

No monthly repayments
Set-up fee from 0.79%
Min $300K, max $8M

8.24

%
p.a.

Variable rate

We offer an introductory rate for the introductory period of the loan term which includes a 1% discount.
We offer an introductory rate for the introductory period of the loan term which includes a 1% discount.
i

8.33

%
p.a.
Comparison rate
Apply now
Up to 12 month loan term
Up to 80% LVR
Downsizers, upsizers, retirees

Residential Bridging Loan

Buy now, sell later

No monthly repayments
Set-up fee from 0.79%
Min $300K, max $8M

8.74

%
p.a.

Variable rate

We offer an introductory rate for the introductory period of the loan term which includes a 1% discount.
We offer an introductory rate for the introductory period of the loan term which includes a 1% discount.
i

8.84

%
p.a.
Comparison rate
Apply now
Up to 12 month loan term
Up to 80% LVR
Downsizers, upsizers, retirees
The Bridgit Loan Calculator

Buy now, sell later

$
$
$
$
Buy new property
(less contribution)
$800,000
Existing
mortgage
$500,000
Sell existing
property
$2,000,000
Your estimated loan calculation
Estimated principal amount
$1,300,000
Your cash after sale
$700,000
Estimated principal amount
$1,300,000
(LVR 43%)
Based on the information provided your Loan to Value Ratio (LVR) may be too high. To help you we require some additional information; feel free to get a quote or schedule a call with our team.
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Why buy before you sell with Bridgit?

No income verification

We assess loans based on property equity and asset position.

No monthly repayments

No monthly repayments or fees for the duration of the loan term

No double mortages

We’ll pay your existing mortgage, so you don’t have to worry about two mortgages at once.

Save on temporary living

Move into your home sooner and avoid short-term rental, storage and moving costs.

No missed opportunities

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Everyone I dealt with at Bridgit was helpful and responsive. Candice (BDM) checked in with me regularly to make sure everything was going smoothly and Andrew kept me in the loop. I recommend Bridgit highly.
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Get 24 hour approval with Bridgit

01

Submit application

Apply online and receive 24 hour approval. Tell us some details about yourself and see how much you can borrow.

02

Accept the offer

Accept your loan offer by making a small upfront deposit and progress your application to the next stage.

03

Purchase your property

Apply online and receive 24 hour approval. Tell us some details about yourself and see how much you can borrow.

*Subject to the loan scenario and outgoing lender processes onrefinance (if applicable).

04

Sell

Sell your existing property and pay down your Bridgit loan. No rush, you have up to 12 months.

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Frequently Asked Questions

What are the benefits of choosing a short term mortgage?

As you consider various short term property loans, make sure that you study the options and weigh the pros and cons, especially when it comes to short term mortgages.

One of the benefits of a short term mortgage is potentially helping speed up the process of building your home equity. Equity pertains to the difference between the market value of your house and the remaining mortgage balance. This will grow faster since you’ll be allocating a larger portion of your monthly payment to the principal loan instead of the interest.

This accelerated equity growth can be beneficial if you have plans to sell your home in the future. It will also help if you have a sudden need to tap into your home equity to finance needs, including education expenses or home improvements.

Another benefit of this mortgage option is that you will own your home outright in a shorter period of time. This could be especially appealing to people who have laid out their long term financial goals and those who are nearing retirement.

However, you must also consider the disadvantages of short term mortgages before getting one. Despite the benefits, it also means that since you will be paying for the loan for a shorter time, your monthly short term mortgage repayment plans could be higher.

Moreover, even the best short term mortgage lenders will often have stringent requirements on who will qualify for these home loans. You can’t expect a short approval process in this instance, as lenders will have to thoroughly consider your ability to pay for the mortgage financing and abide by the loan terms.

Are interest rates lower for short term mortgages?

Rates can differ among short term private lenders. However, some short term lenders offer an initial interest-free period for bridging loans. This means that if you pay off the loan within the provided period, you won’t have to pay any interest.

Nonetheless, as the borrower, you must consider your overall financial situation when choosing your loan option, not just the potential interest rates. Are you up for short term home loans, or is it best to find alternative home loan lenders?

What is the maximum loan amount for a short term mortgage?

The maximum loan amount you can get approved for short term mortgages can vary significantly based on the specific mortgage product you’re applying for, your financial situation, and the lender’s policies. They can have more variable limits, unlike their long term counterparts.

Lenders will evaluate your capacity to pay the monthly dues in the probable span of years you would need to pay the loan. You will know more about these qualifications for borrowers set by different lenders when you search for ‘short term home loans Australia’.

Bridgit offers an alternative to reverse mortgage option and short term mortgages via our bridging loan product. This is most suited for those who intend to sell their homes, as bridging loans allow them to buy a new house before selling their current one.

You can opt for this loan option whether you are downsizing or upsizing. In both cases, we will offer you no monthly repayments. This means you’ll have enough time to consider your options for selling your old house.

Bridgit: making it easier to acquire your dream home

Bridgit offers innovative solutions in property financing. Our mission is to empower Australians with the ability to transition into their dream homes without the immediate need to sell their current properties.

We don’t just offer loans; we offer progress. Our bridging loans are designed for today’s dynamic real estate market, providing flexibility and agility in property transactions.

We adapt to the unique financial situations of each homeowner, whether it’s a family expanding or someone looking for a more manageable home. We offer bridging loans that fit different situations for many Australian homeowners.

We invite you to explore our innovative financial solutions at Bridgit and join the multitude of satisfied homeowners who’ve found their path to progress with us. There’s no need to look up terms like ‘short term mortgages’ or ‘loan for short term rental property’. Submit an application with Bridgit today!

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Disclaimer
‍
Eligibility and approval is subject to standard credit assessment and not all amounts, term lengths or rates will be available to all applicants. Fees, terms and conditions apply.
‍
^Comparison rate is calculated on a $150,000 secured loan over a 25-year term. WARNING: Comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in different comparison rates. Comparison rates for interest only loans will not reduce your loan balance. This may mean you pay more interest over the life of the loan. Bridging Loan set up fee is from 0.79% and government charges apply.