Bridging Loans Australia 2026
Short-term finance to buy your next property before your current one sells. Compare bridging loans from 100+ Australian lenders — closed vs open bridging, peak debt, capitalised interest and ending debt explained.
11 products found
| Type | LVR | Est. Repayment | ||||
|---|---|---|---|---|---|---|
Standard Variable Rate Home Loan Package - Owner Occupied P&I 60% LVR HSBC |
Owner Occ. Variable
|
5.89%p.a. | 6.26%p.a. | ≤60% |
$2,962/moon $500,000, 30yr
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Standard Variable Rate Home Loan Package - Owner Occupied P&I 70% LVR HSBC |
Owner Occ. Variable
|
5.94%p.a. | 6.31%p.a. | 60–70% |
$2,978/moon $500,000, 30yr
|
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Standard Variable Rate Home Loan Package - Owner Occupied P&I 80% LVR HSBC |
Owner Occ. Variable
|
5.99%p.a. | 6.36%p.a. | 70–80% |
$2,995/moon $500,000, 30yr
|
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Standard Variable Rate Home Loan Package - Investor IO <80% LVR HSBC |
Investment Variable
|
6.34%p.a. | 6.44%p.a. | ≤80% |
$3,108/moon $500,000, 30yr
|
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Standard Variable Rate Home Loan Package - Investor P&I 60% LVR HSBC |
Investment Variable
|
6.09%p.a. | 6.46%p.a. | ≤60% |
$3,027/moon $500,000, 30yr
|
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Standard Variable Rate Home Loan Package - Investor P&I 70% LVR HSBC |
Investment Variable
|
6.14%p.a. | 6.51%p.a. | 60–70% |
$3,043/moon $500,000, 30yr
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Standard Variable Rate Home Loan Package - Investor P&I 80% LVR HSBC |
Investment Variable
|
6.19%p.a. | 6.56%p.a. | 70–80% |
$3,059/moon $500,000, 30yr
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Standard Variable Rate Home Loan Package - Owner Occupied P&I >80% LVR HSBC |
Owner Occ. Variable
|
6.29%p.a. | 6.66%p.a. | ≤80% |
$3,092/moon $500,000, 30yr
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Standard Variable Rate Home Loan Package - Investor P&I >80% LVR HSBC |
Investment Variable
|
6.49%p.a. | 6.85%p.a. | ≤80% |
$3,157/moon $500,000, 30yr
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Standard Variable Rate Home Loan Package - Investor IO >80% LVR HSBC |
Investment Variable
|
6.64%p.a. | 6.89%p.a. | ≤80% |
$3,207/moon $500,000, 30yr
|
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Bridging Loan Arab Bank Australia |
Bridging Variable
|
10.4%p.a. | 10.47%p.a. | — |
$4,536/moon $500,000, 30yr
|
Standard Variable Rate Home Loan Package - Owner Occupied P&I 60% LVR
HSBC
Interest Rate
5.89%
Comparison
6.26%
Est. $2,962/mo on $500,000 over 30yr
Standard Variable Rate Home Loan Package - Owner Occupied P&I 70% LVR
HSBC
Interest Rate
5.94%
Comparison
6.31%
Est. $2,978/mo on $500,000 over 30yr
Standard Variable Rate Home Loan Package - Owner Occupied P&I 80% LVR
HSBC
Interest Rate
5.99%
Comparison
6.36%
Est. $2,995/mo on $500,000 over 30yr
Standard Variable Rate Home Loan Package - Investor IO <80% LVR
HSBC
Interest Rate
6.34%
Comparison
6.44%
Est. $3,108/mo on $500,000 over 30yr
Standard Variable Rate Home Loan Package - Investor P&I 60% LVR
HSBC
Interest Rate
6.09%
Comparison
6.46%
Est. $3,027/mo on $500,000 over 30yr
Standard Variable Rate Home Loan Package - Investor P&I 70% LVR
HSBC
Interest Rate
6.14%
Comparison
6.51%
Est. $3,043/mo on $500,000 over 30yr
Standard Variable Rate Home Loan Package - Investor P&I 80% LVR
HSBC
Interest Rate
6.19%
Comparison
6.56%
Est. $3,059/mo on $500,000 over 30yr
Standard Variable Rate Home Loan Package - Owner Occupied P&I >80% LVR
HSBC
Interest Rate
6.29%
Comparison
6.66%
Est. $3,092/mo on $500,000 over 30yr
Standard Variable Rate Home Loan Package - Investor P&I >80% LVR
HSBC
Interest Rate
6.49%
Comparison
6.85%
Est. $3,157/mo on $500,000 over 30yr
Standard Variable Rate Home Loan Package - Investor IO >80% LVR
HSBC
Interest Rate
6.64%
Comparison
6.89%
Est. $3,207/mo on $500,000 over 30yr
Bridging Loan
Arab Bank Australia
Interest Rate
10.4%
Comparison
10.47%
Est. $4,536/mo on $500,000 over 30yr
TL;DR — What You Need to Know
- A bridging loan covers the financial gap between buying a new property and settling the sale of your existing one — you temporarily hold two properties.
- Interest is charged on the peak debt (existing loan + new purchase) at rates typically 2.5–3.5% above standard variable.
- Closed bridging (signed contract to sell) is lower risk and easier to get; open bridging (not yet sold) is higher risk and shorter term.
- Interest is often capitalised — added to the loan rather than paid monthly. Six months at 8.19% on $500,000 adds ~$20,475 to your debt.
- If you can't sell the existing property in time, the lender has the right to force the sale. This is not a theoretical risk.
- Alternatives — selling first, subject-to-sale contracts, simultaneous settlement — should be explored before committing.
Bridging Loans Australia: What They Cost and When They're Worth It
A bridging loan is short-term finance that lets you buy your next property before your current one sells. It's one of the more expensive products in the Australian home loan market — from 8.19% p.a. interest-only — and it comes with risks that standard home loans don't. LoanGorilla compares bridging finance from 100+ Australian lenders and non-bank lenders. With the RBA cash rate at 4.35% (effective 6 May 2026) and property markets still active, knowing exactly how bridging works — and what happens if things don't go to plan — is not optional reading.
Compare bridging loan options — free, no credit score impact.
Compare NowWhat Is a Bridging Loan?
When you own an existing property with a mortgage and want to buy a new one before selling, you face a timing problem. Your deposit and the proceeds from the sale are tied up in a property that hasn't sold yet. You don't have the funds for a standard deposit. Your serviceability looks stretched because you're carrying two loans simultaneously.
A bridging loan solves this timing problem. The lender advances funds to purchase the new property while your existing property remains unsold. The two loans are typically consolidated into a single bridging facility, and you pay interest on the combined "peak debt" amount — usually on an interest-only basis — until the existing property sells. At settlement, the sale proceeds are used to pay down the loan, leaving you with a residual "ending debt" on the new property only.
The bridging period
Typically 6–12 months. Most lenders allow a maximum of 12 months. Non-bank lenders sometimes allow up to 24 months for complex situations.
Closed vs Open Bridging: The Key Distinction
Closed bridging loan
You've already exchanged contracts on the sale of your existing property. The sale is unconditional and will settle on a known date. Lower-risk scenario — lenders are more comfortable, rates may be slightly more favourable, and some lenders who refuse open bridging will still offer a closed product.
Open bridging loan
You haven't yet sold your existing property — buying now with intent to sell, no signed contract. Exit date is unknown. Most lenders cap at 6–12 months and require a credible exit strategy: evidence the property is listed, a realistic price supported by comps, and serviceability of the peak debt. More expensive, harder to obtain.
How Bridging Interest Works: The Peak Debt Problem
The interest structure on a bridging loan is fundamentally different from a standard home loan — and more expensive than the headline rate suggests.
Peak debt = your existing loan balance + the purchase price of the new property (less any cash deposit you can contribute).
| Item | Amount |
|---|---|
| Existing property value | $800,000 |
| Existing loan balance | $250,000 |
| New property purchase price | $750,000 |
| Cash deposit available | $0 (equity tied up) |
| Peak debt | $1,000,000 |
| Interest @ 8.19% p.a. (interest-only) | ~$6,825 / month |
Significantly more than the monthly repayment on either loan individually — and it runs until the existing property settles.
The capitalised interest trap
Many bridging loans allow — or require — interest to be capitalised rather than paid monthly. Each month's interest is added to the loan balance and then accrues further interest. On $500,000 peak debt at 8.19% over 6 months, that's ~$20,833 added to your loan with no money paid out of pocket. Always build capitalised interest into your ending debt calculation upfront.
The Ending Debt Calculation
This is the number that matters most: what does your loan look like after the existing property sells?
Ending debt = Purchase price of new property − Net sale proceeds + Capitalised interest + Costs
| Scenario | Sale price | Period | Ending debt |
|---|---|---|---|
| Best case | $800,000 | 6 months | $250,000 (33% LVR) |
| Sale $50k under expectation | $750,000 | 6 months | $300,000 |
| Period extends to 12 months | $800,000 | 12 months | $320,000 |
Ending debt is sensitive to sale price, settlement timing, and the bridging rate. Build best, expected and worst case before committing.
When Bridging Is Justified vs When It's a Red Flag
Bridging makes sense when…
- You have a signed contract to sell — the exit is defined
- Existing property is in a liquid, high-demand market
- Bridging period is short (under 6 months)
- Worst-case ending debt is comfortably serviceable
- The new property opportunity is genuine, not panic buying
- You have buffer cash for capitalised interest if delayed
Bridging is a red flag when…
- You're buying speculatively in a soft market
- Existing property is slow to sell or in a thin market
- Income only barely services the peak debt
- Expected sale price is aggressive (top-of-market)
- You haven't modelled the worst case
- You're already financially stretched
The peak debt risk: what happens if things go wrong
- No indefinite extensions: after the maximum term (typically 12 months), the lender can demand refinance or sale of security.
- Forced sale: the lender can apply for a court order to sell either property. Forced sales rarely achieve market price — often 10–20% below.
- Credit damage: a default leaves a serious mark on your credit file for years.
- Double exposure: both properties sit in the lender's security pool — a problem with one affects both.
Exit Strategies
Before a lender approves a bridging loan, they want to see an exit strategy. You should want one too.
- Primary exit — sell the existing property. Sale proceeds retire the bridging facility, leaving only the ending debt on the new property.
- Secondary exit — refinance into a long-term loan. If unsold by the bridging term but you can demonstrate serviceability on peak debt, some lenders will refinance into a standard loan. Not ideal — you're carrying two mortgages long-term — but better than a forced sale.
- Worst case — forced sale. If you can't sell or refinance, the lender may force the sale of the existing property, or in extreme cases one or both properties may be sold mortgagee-in-possession.
Alternatives to Bridging Loans
Before going to a bridging loan, explore these options:
Sell first, then buy
The simplest approach. You know your sale proceeds exactly and rent temporarily. Feels riskier in fast markets, but the financial risk is considerably lower than an open bridge.
Negotiate simultaneous settlement
With skilled conveyancers and cooperative parties, settling sale and purchase the same day can eliminate the need for bridging entirely.
Subject-to-sale contracts
Offer on the new property conditional on the sale of yours. Vendors in strong markets may refuse, but in balanced markets they can work — usually time-limited (30–90 days).
Family loan or deposit bond
A short-term family loan (documented properly) can cover the deposit gap. A deposit bond is a guarantee from an insurer that substitutes for cash at exchange — typically 1–1.5% of the deposit amount.
Lender Appetite for Bridging Loans
Not every lender offers bridging finance. Of those that do, appetite varies significantly:
| Lender type | Appetite | Indicative rate |
|---|---|---|
| Major banks | ANZ, CBA, NAB, Westpac — primarily closed bridging. Conservative criteria, strong income, clear exit, short period. | From ~8.19% p.a. |
| Non-bank lenders | More flexible criteria for open bridging, higher LVRs and unusual property types. Higher rates and shorter terms in some cases. | 8.50%–10%+ p.a. |
| Specialist bridging | Short-term and mezzanine finance — typically commercial-scale or where mainstream lenders have declined. | 12%+ p.a. |
LoanGorilla identifies lenders with appetite for your specific bridging scenario before you apply, avoiding unnecessary credit enquiries with lenders who will decline.
Model your ending debt scenario
Use our Refinance Calculator to model what your loan looks like after the bridging period — compare different sale price scenarios and capitalised interest assumptions.
Open Refinance CalculatorYou Might Also Compare
FAQs — Bridging Loans
Ready to Explore Bridging Finance?
Bridging loans are the right tool for specific situations — and the wrong tool for others. LoanGorilla compares lenders with genuine appetite for bridging finance and helps you understand your ending debt before you commit.
Credit information: LoanGorilla is a credit assistance provider. Information on this page is general in nature and does not constitute financial or credit advice. Consider whether any home loan product is appropriate for your circumstances. We recommend seeking independent financial and legal advice before making borrowing decisions.
Comparison rate warning: Comparison rates are based on a secured loan of $150,000 over 25 years. WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different loan amounts, loan terms or fees may result in a different comparison rate. Rates are subject to change without notice.
Reviewed by LoanGorilla editorial team | Last updated: May 2026
Rates shown are subject to change. Comparison rates are based on a secured loan of $150,000 over 25 years. WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different loan amounts, terms or fees may result in a different comparison rate. Rates are subject to change without notice.