A bridging loan lets you purchase a new property before selling your existing one. During the bridging period, you effectively hold two properties and owe on both - your existing mortgage continues while a new loan covers the purchase. The combined total is called your peak debt, and it is the main driver of your bridging cost.
The cost of a bridging loan comes down to three things: the size of your peak debt, the interest rate, and how long the bridge lasts. Most lenders capitalise the interest during the bridging period, meaning you do not make repayments - the interest accrues and is settled when your existing property sells. This simplifies your cash flow but means the total cost grows with every month on bridge.
Modelling the numbers before you commit is essential. A six-month bridge at 7.5% on a $1.5M peak debt costs around $56,000 in interest alone. If the bridge extends to nine months, that climbs to $84,000. Lendology runs these scenarios with you before you make an offer, so you know exactly what you are signing up for and can plan accordingly.
Enter your current property value, existing mortgage balance, the price of the home you want to buy, how long you expect the bridge to last, and the interest rate. The calculator shows your peak debt, the monthly and total interest cost, and your estimated equity position after the sale. Actual costs depend on the lender, loan structure and any fees - this gives you a solid starting point for planning.
Want to know the exact cost for your situation? Book a chat and we will model your bridging scenario across multiple lenders, compare rates, and give you a clear picture of costs before you commit to anything.
Bridging loan costs depend on the interest rate and how long you hold both properties. On a peak debt of $1.5M at 7.5%, monthly interest is around $9,375. Over a 6-month bridge, total interest cost is approximately $56,000. Lendology models the exact cost for your situation before you commit.
Most lenders allow bridging periods of 6 to 12 months, though some extend to 24 months in special circumstances. The shorter the bridge, the lower the cost. Lendology helps you plan realistic timelines based on your local market.
Most bridging loans capitalise interest during the bridging period, meaning you do not make separate repayments. The interest accrues and is paid when your existing property sells. Some lenders offer the option to make interest-only payments during the bridge to reduce the total cost.
If your property has not sold by the end of the bridging period, some lenders allow extensions. Others may require you to list with a new agent or reduce the price. Lendology selects lenders with flexible bridging policies and realistic timeframes to minimise this risk.