What Is A Bridging Loan Australia

Frequently Asked Questions (FAQ)

Is a bridging loan different from a regular home loan in Australia?

A common search query among homeowners looking to upgrade, downgrade, or move away from a currently mortgaged home is ‘What is bridging loan?’

It’s reasonable to feel intimidated by the topic of bridging loans; it can seem overwhelming at first glance. The good news, though, is that using a bridging loan for home purchase is a fairly common lending experience for many in Australia.

But first, how different are bridging loans to warrant the question, ‘What is a bridging loan Australia residents can trust?’

A bridging loan is a short-term financing option for homeowners with ongoing home loans or mortgages who are looking to purchase another property, typically a new residence, by selling their existing property.

If approved, a bridging loan goes towards purchasing the borrower’s new home while their current one is either still on the market or in the process of finalising its sale.

When looking up your options for bridging loan lenders, note that there are two types of bridging loans: open bridging loans (which have a general loan term of six months) and closed bridging loans (which have a pre-agreed settlement date, typically with a buyer already committed to the property being sold).

Bridging finance costs in Australia can be higher compared to regular home loans, and additional bridging loan rates or fees may be charged if your property has not been sold after the agreed-upon period.

With Bridgit by your side, however, the online search for terms like ‘what is a bridging loan Australia’ can come to an end. This way, we can help you confidently achieve your dream home through an empowering means of financing.

Do I need to provide proof of my income for a bridging loan in Australia?

As with any loan product, there are requirements for the bridging loan application process. Among the common bridging loan eligibility criteria are proof of continuous employment (for those with PAYG income), tax returns or accountant declarations (for self-employed individuals), and pension and super income (for pensioners, if applicable).

Income is only assessed and verified for end debt loan purposes.

What is an end debt, you ask? End debt, or ongoing balance, is the remaining loan value you will potentially owe after the sale of your property settles your loan peak debt. In turn, peak debt is the remaining balance on your mortgage (if any) plus the amount needed to purchase your new home.

There are also other eligibility factors that come into play, such as whether or not you’ve settled your first mortgage, how much equity you have on your property, and your property’s overall market value or ongoing market conditions. Whether you’re upgrading or downsizing can factor in as well.

When it comes to discussing topics like ‘What is a bridging loan Australia residents can trust?’ it’s important to assess your potential costs. You could use a bridge loan calculator to estimate your potential loan terms. If you choose us at Bridgit, we aim to guide you through every step, so you can confidently make an informed decision.

Is a bridging loan different from a regular home loan in Australia?

Bridging loans have gained popularity in Australia, and it’s easy to see why.

A regular home loan, also known as a mortgage, is a type of loan used to purchase a home or investment property. Loans of this type are usually repaid over a long period of time, usually 25–30 years, and the property itself serves as collateral or security on the loan.

In contrast, a bridging loan is a short-term financing solution used to cover or ‘bridge’ the gap between two financial transactions – in this instance, the gap between selling a house and purchasing a new one. Specifically, bridging loans are used to purchase a new home before the current one is sold, making them particularly useful for homeowners looking to buy a new home before they have sold their old one.

Bridging loans also have a much shorter loan term, typically no more than six months. Borrowers are also generally not required to make immediate repayments on a bridging loan, but this may depend on the type of bridging loan you’ve been approved for.

In Australia, bridging loan requirements vary depending on your unique loan scenario. For example, applicants with PAYG income may be asked to provide, at the very least, proof of two months’ pay and six months of continuous employment.

Wondering about bridging loan interest rates? At Bridgit, we offer both downsizer and upsizer bridging loans with no monthly repayments or early exit fees either. Add in our excellent customer support and streamlined application and review processes, and you’ve got the foundation of a wonderful lending experience.

Waiting can mean losing out on your dream property, especially when you have no other choice, but with Bridgit on your side, you don’t have to wait for very long. We give you choices. So what are you waiting for?

Bridgit: Leading the Charge in Australia’s Bridging Loan Revolution

Empowerment sits at the heart of Bridgit, your bridge financing specialist in Australia. Founded in 2021, Bridgit was the response to a unique gap in the lending market for Australian homeowners looking for alternatives to traditional banking and lending options for purchasing a new home.

We believe in granting Australians like you the freedom to tap into the equity of your property and transition to the next chapter of your story, even while your current home is on the market. By refining the bridging loan meaning to its simplest form, a bridging loan acts as your financial bridge to your dream home and other opportunities that could help you achieve your goals.

With Bridgit, you don’t have to endlessly wonder about questions like ‘How does a bridge loan work?’ or ‘What is a bridging loan Australia residents can trust?’ anymore. As a rising specialist on the topic of ‘bridging loan Australia’, we’re not just facilitating loans; we’re transforming the future for every Australian homeowner.

Buy your next property on your own terms and apply for a Bridgit loan today.