An ongoing home loan remains.
The sale reduces the debt but does not clear it all. The remaining balance is repaid under the agreed home-loan terms. Those repayments need to work for your life after the move.
See the end-debt example ↓BUY FIRST, THEN SELL · BRIDGING FINANCE
Your next home.
Before this one sells.
The right home does not always arrive at the right time. Bridging finance may help you buy before you sell, with a clear plan for the overlap, the costs and what happens next.
Phone, video or office appointment. You can start with questions.
Trusted advice since 2011.Fees and commissions →Client experiences →
A TIMING TOOL, WITH A COST
What is bridging finance?
Bridging finance is short-term lending that covers the gap between buying your next property and receiving the money from selling your current one. Depending on the structure, lending may be secured against both properties.
It can give you a way to move when sale and purchase dates do not line up. It may also help avoid a temporary rental or a second move. The trade-off is carrying more debt and property costs during the overlap, with a deadline for the sale to settle.
FRF starts with your sale estimate, equity, cash, income and commitments. We then look at the proposed bridge and any home loan that would remain. Bridging needs to suit the whole move, not just get you to the next purchase.
FOLLOW THE MOVE
How the bridge connects.
One purchase, a period of overlap, then a sale. The amount left after that sale is the key difference.
Buy your next home
Approved finance funds the purchase. Your existing lending and the new purchase funding are part of the overall plan.
Hold both homes
You carry a larger temporary debt position, often called peak debt. Interest and costs can increase the balance if they are added to the lending.
Your current home sale settles
Sale funds are applied to the lending under the agreed arrangement, after allowing for selling costs and amounts that must be paid.
After the sale, there are two possible outcomes:
The sale clears the relevant lending.
Available sale funds cover all relevant loan balances, accrued interest and costs. Any surplus is released after settlement adjustments. No ongoing home loan remains from this arrangement.
See the no-end-debt example ↓THE PART TO TAKE SERIOUSLY
Convenient timing can come
with a substantial interest bill.
Some bridging products have higher interest rates or different fees than a standard home loan. Others use standard-variable pricing. The rate alone does not tell you the full cost.
The rate and fees
Check the proposed rate, any changes over time, establishment charges, valuations, legal costs and discharge fees. Compare the whole arrangement and the options available to you.
The balance being charged
You may have interest running on existing and new borrowing at the same time. A larger temporary balance can mean a larger interest bill, even if the rate looks familiar.
Time until sale settlement
A signed sale contract does not put the money in your account immediately. Allow for the time to sell and settle, plus insurance, rates, maintenance and other costs of holding both homes.
When interest is added to the loan
This is called capitalised interest. It increases the amount owed and can mean paying interest on earlier interest. Other arrangements require interest payments during the bridge. Repayments on existing or ongoing loans may still be required.
Ask exactly which payments are due, which interest is added, and how the balance changes if your sale takes longer.
A simple timing check: if interest costs $1,000 a month, three more months adds $3,000 before extra fees or interest on that interest. This is arithmetic to explain the effect of time, not a lender quote.
ROUND FIGURES. CLEARER DIFFERENCE.
Two examples.
Two different finishes.
In both examples, assume the existing loan is included in the combined debt, all interest and finance costs are added, and no repayments are made during the bridge.
Read the assumptions first.
The $30,000 for interest and finance costs is a chosen allowance to show the mechanics, not a calculated charge, cost estimate or quote for either example. Buying and selling costs are also assumed. These figures do not test whether a lender would approve either application.
On a small screen, scroll the table sideways to compare both examples.
| The moving pieces | With end debt | No end debt |
|---|---|---|
| Existing home loan | $300,000 | $100,000 |
| Next home purchase | $950,000 | $700,000 |
| Buying-cost allowance | $50,000 | $40,000 |
| Less cash contributed | −$100,000 | −$100,000 |
| Combined debt at purchase | $1,200,000 | $740,000 |
| Added interest and finance costs — assumed | $30,000 | $30,000 |
| Balance before applying sale funds | $1,230,000 | $770,000 |
| Current home sale price | $900,000 | $1,000,000 |
| Less selling costs | −$25,000 | −$25,000 |
| Sale funds available to repay lending | $875,000 | $975,000 |
| Home loan remaining after the sale | $355,000 | $0 |
| Surplus after repaying the lending | $0 | $205,000 |
Here, sale funds are after selling costs but before repaying loans. The existing mortgage is already in combined debt above; it is not subtracted a second time. Actual loan structures, interest calculations, repayments, settlement adjustments and costs will change the result.
With end debt: the $355,000 remains as a home loan under the agreed arrangements. You still need an assessment of affordability and the ongoing repayments.
No end debt: the sale clears the $770,000 and leaves $205,000 in this example. The move still included interest and fees; it was not cost-free.
BEFORE YOU COMMIT
Plan for the sale you can support.
A realistic sale price and a fallback plan belong in the conversation before you buy.
What if it sells later?
Interest and property costs can keep building. You must work within the agreed loan term; an extension or refinance is not assured. Speak with the lender or broker early if the sale is not progressing.
What if it sells for less?
You may need more cash or be left with more debt than planned. In the end-debt example, a sale price $50,000 lower would leave $405,000 owing if everything else stayed the same. A no-end-debt plan can also leave a shortfall; you cannot assume it will simply become a standard home loan.
What if the exit plan does not work?
Understand the lender’s requirements and options before signing. If secured lending cannot be repaid, the properties used as security can be at risk.
What else could work?
Selling first, agreeing different settlement dates or negotiating appropriate contract conditions may be worth discussing. Get legal advice on the contracts and compare the practical cost of each route.
Explore the timing alternatives →BRING THE PICTURE TOGETHER
A useful first conversation.
You do not need perfect answers. Start with what you know, and we can identify what still needs checking.
What to expect at your appointment →- Your existing loan balance and available payout information.
- A realistic sale range and expected selling costs.
- The next property’s price, buying costs and settlement timing.
- Cash you can contribute and the buffer you want to keep.
- Your income, regular spending and other commitments.
- A plan for a slower sale or a lower result.
Do all bridging loans have a higher interest rate?
No. Pricing varies by lender and product. Some charge a higher rate or different fees; others use standard-variable pricing. Compare the total cost, including the balance, time held and any interest added to debt.
Do I make repayments during the bridge?
It depends on the agreed structure. Some facilities require interest payments; others add interest to the balance. Existing or ongoing loans may still have repayments. Confirm each payment obligation before committing.
Does no end debt mean there is no assessment?
No. The lender still considers eligibility, the properties, equity, sale assumptions and its credit requirements. A no-end-debt outcome is not an approval or a promise that income information will not be needed.
How long do I have to sell?
There is no single term across every lender and product. Confirm the approved deadline for both sale and settlement, what happens if it is missed, and whether an extension would require a new assessment.
Can I assume the sale will clear everything?
No. Use a realistic sale estimate and include selling costs, loan payouts, accrued interest and other settlement amounts. The actual sale result and timing determine whether an amount remains owing.
LET’S TALK THROUGH THE WHOLE MOVE
Found the next place?
Start with the plan.
Bring your current home, the next property and the timing you have in mind. We can explore whether bridging is worth considering alongside the alternatives.
Ringwood / Melbourne · Geelong · Phone & video
General lending information only. The examples are illustrative, not a product quote, approval or recommendation. Lending criteria, valuation, income, equity, terms, fees and charges need assessment. Seek appropriate legal, tax and financial advice for your decisions.
Sources and information checked · 14 November 2026
Published by Foster Ramsay Finance. Lender sources explain different features; they are not product recommendations or terms that apply across every lender.