Bridging Finance can help buyers manage gaps in cash flow that can occur between the purchase of one asset and the sale of another.

Bridging finance can typically be organised within 2- 3 days and is very useful for buyers who have found another property, but haven’t yet found buyers for their previous property.

Bridging loans can help manage the fees and charges associated with purchasing and selling property and the terms are no longer than 12 months.

The two different types of bridging loans are known as Closed and Open Bridge.

Closed Bridging Finance is available to buyers who have exchanged on the sale of their existing property.

Open Bridge loans are taken out by buyers who have found their property but haven’t put their existing property on the market.

The lender will want proof that your current property is being actively marketed and that you have a substantial amount of equity, in your current property and an exit strategy, in case the sale doesn’t eventuate. 12 months is also the standard limit for an Open Bridge.

Because of the higher risk, bridging loans can attract a higher interest rate than regular home loans.

The main benefit of a bridging finance loan is that you will only have to pay the interest portion of the repayments, so that you avoid having to pay off two loans at the one time.

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