Bridging Home Loans

Bridging loans are designed to provide short-term financing to help homebuyers bridge the gap between selling their existing property and buying a new one.

To learn more about bridging loans, read our guide on What is a bridging loan.

Here are some common reasons why home buyers take out a bridging loan in Australia.

• Buying a new property before selling their current one.
• Taking advantage of a favourable property market.
• Completing home renovations before listing.
• Not needing to worry about where to live while looking for a new home.
• Potentially borrowing more as they can use the equity in the home they’re selling to finance the new purchase.

Before taking out a bridging loan, it’s important to understand the concept of ‘peak debt’ and ‘end debt’.

Peak debt refers to the highest level of debt-incurred before the sale of an existing property. It includes the loan amount for the new property as well as any outstanding mortgage on the current property.

End debt is the total amount of debt that remains at the end of the loan term, after the existing property is sold and the bridging loan is repaid.

It depends on the lender. For Brighten, our bridging loan product – Brighten Connect – offers:

• peak debt of up to $2,000,000 for loans up to 80% LVR.
• peak debt of up to $5,000,000 for loans up to 70% LVR.

The maximum amount a customer can borrow depends on various factors, such as their income, liabilities and credit history.

Brighten’s online borrowing calculator offers an estimate based on your current financial situation, helping you understand how much you could potentially borrow.

It depends on the lender. For Brighten, our bridging loan product – Brighten Connect – offers a 6-12 months bridging period, and a total loan term of up to 30 years.

A ‘no end debt’ bridging loan could be a good option if you’re downsizing your home. This type of bridging mortgage has no set repayment date and you’ll pay the interest charges and the loan balance in full when the loan matures. When you sell your property, you can use the money to pay back the loan when it ends.

An ‘end debt’ bridging loan could be a good option if you’re upsizing your home. This type of bridging mortgage is split into two parts: a short-term bridging loan that covers the costs of selling the existing property and a long-term loan for buying a new property. When your property is sold, the money is used to repay the short-term bridging loan component, leaving you with a long-term loan for the new property.

It depends on the lender. For Brighten, our bridging loan product – Brighten Connect – follows an Interest Only repayment structure. During the bridging period, the interest budget is retained, so no repayments are required.

If there’s no end debt required, the borrower will simply pay off the short-term bridging loan once their existing property is sold.

If there’s an end debt involved, then after the existing property is sold and the bridging loan is repaid, the loan will automatically revert to a standard Brighten Full Doc and Alt Doc product with an applicable interest rate — typically at a lower rate.

For bridging finance, we accept houses, apartments and townhouses as security in category 1 (metro areas, capital cities in each state and major regional centres with large populations) and category 2 (medium-sized regional centres) postcodes.

It depends on the lender. For Brighten, if there is no end debt involved, no income documentation is required.

If there is end debt involved, the required documents will depend on the end debt loan. Generally, for Full Doc loans we accept two consecutive payslips. For Alt Doc loans we accept one form of income verification, such as: Brighten template accountant’s letter, 6 months of BAS or 3 months of business bank statements.

Please refer to the Document Checklist section for more details.