How much you can borrow
As the name implies, a bridging loan ‘bridges the gap.
The loaner you choose takes security over both properties and loans them until both properties are sold and purchased. During a bridging loan, your home loan is usually charged only as an interest loan. Many lenders offer interest rates comparable to or slightly higher than the standard variable rate.
Bridging home loans is an excellent way for buying your first home before your existing home is sold. They are often used to finance purchases of a new property while your current property is sold and finance the construction of a new home while you live.
How does a bridging loan work?
Some lenders can allow you to capitalize on bridging loans to relieve you of the need to repay loans during the bridging period.
Bridging loans – what to consider
Whereas bridging loan funds bridge the above financial gaps, the right loan products for you depend on several
Bridging of the loans – the case study
A model of how a bridging loan forms when a new property is purchased.
It shifts your current loan from your existing property to your new one, thus avoiding many of the installation and ongoing costs related to a new loan.
Capitalized interest loans
With a capitalized interest loan, no repayment for the new loan is required when you sell your existing home. Instead, a new loan is created to buy a new house and pay your existing home loan.