Buying before you sell: how bridging loans work
27 June 2026 · Impact Home Loans
Found the right next home but haven't sold your current one yet? A bridging loan can cover the gap so you don't miss out. Here's how it works — and what to plan for.
What a bridging loan is
Bridging finance is a short-term loan that lets you buy your new property before your existing one sells. It covers the overlap, then reduces to a standard home loan once your old place settles and the sale proceeds come through.
Peak debt and end debt
During the bridging period you effectively hold both loans — your peak debt. Once your current home sells, the proceeds pay down a big chunk, leaving your end debt: the normal mortgage you carry going forward. Lenders assess whether you can comfortably service that end debt.
How repayments work
During the bridge, many lenders charge interest only — and sometimes that interest is added to the loan rather than paid monthly, to ease cash flow while you're holding two properties. The structure varies by lender, so it's worth understanding exactly how yours works.
The risks to plan for
The main risk is timing. If your current home takes longer to sell, or sells for less than expected, your peak debt sits higher for longer. That's why we model the scenario conservatively — stress-testing a lower sale price and a longer timeframe — before recommending it.
Is it right for you?
Bridging can be a great tool when the timing doesn't line up, but it needs careful structuring around your expected sale price and timeframe. As a starting point, our borrowing power calculator gives a rough sense of what you could comfortably carry.
Want to know where you'd stand? Talk to us about bridging finance and we'll model it with you — no cost, no obligation.
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