Bridging loans: buying before you sell

Last updated 3 November 2026 · Reviewed by 360 MMS Compliance

What is a bridging loan?

A bridging loan is short-term finance for the period when you own two properties: the home you're buying and the home you're selling. Instead of waiting for your sale to settle before you buy, you borrow for a limited time while you own both. When your existing home sells, the sale proceeds repay the bridging debt. Any debt left over can then move to an ordinary home loan.

Bridging isn't your only option. Some people sell first and rent for a while, or agree settlement dates on the sale and purchase that line up. Those options avoid carrying two properties, but they can mean moving twice or missing out on a property you want. A bridging loan gives you more control over timing, in exchange for the cost and risk of owning two properties for a while.

Who can apply?

Our bridging loans are for individual borrowers buying and selling residential property. They aren't available to companies or trusts. Because it's a regulated home loan, responsible lending rules apply in full: your broker will look at your income, expenses and the plan for the sale, and the loan has to suit your needs. The properties need to be in metropolitan or non-metropolitan locations; regional properties aren't accepted as security for bridging. Each application is assessed on its circumstances and lending criteria.

How much can I borrow, and for how long?

• Loan size: minimum and maximum loan amounts apply.
• How much you can borrow: this depends on your circumstances, the security offered and the total debt during the bridging period. Your broker will assess your income and financial situation.
• Term: a limited period while your existing property is sold.
• Offset: an offset account is available.

How are repayments handled during the bridging period?

You can choose between two options:

• Interest only. You pay the interest each month, and the loan balance stays the same until your home sells.
• Capitalised interest. You make no repayments during the bridging period. The interest is added to the loan, so the balance grows over time and is repaid from the sale proceeds.

Capitalised interest can make the bridging period easier on your cash flow, but you pay interest on the interest that's been added, so it costs more overall. The longer the sale takes, the bigger the difference.

What exit strategy do I need?

The exit for a bridging loan is the sale of your existing property. You'll need to document how and when you plan to sell, including the timeframe and the price you expect. A realistic price matters: if the sale brings in less than planned, more debt is left to refinance, and if it takes longer, more interest builds up. Your broker will ask about your plan before applying. If the sale is delayed, talk to your broker early rather than waiting until the term is nearly up.

What happens to the leftover debt after the sale?

If your sale doesn't repay the whole bridging loan, the remaining debt may be able to move to one of our standard home loans. That new loan is assessed in its own right against lending criteria, so your income and expenses need to support the repayments on the ongoing debt. Planning for this from the start helps you see what your repayments are likely to look like once you've moved.

What does a bridging loan cost?

You pay interest on the whole bridging debt until your sale settles, and fees and charges apply. If you choose capitalised interest, the interest added to the loan is paid from your sale proceeds, which reduces what you have left. Your broker can set out the expected cost over the bridging period so you can weigh it against selling first.

FAQs

General information only. It doesn't take into account your objectives, financial situation or needs, and it isn't credit, tax or legal advice. All loans are subject to lending criteria, and fees and charges apply. Kuone Pty Ltd T/As 360 MMS (ABN 81 621 683 672), Australian Credit Licence 504193.