Bridging Loans – Secure Funds Fast When Banks Say No

For many Australians, the process of buying a new home while still owning another can be daunting. You’ve found your dream home, but it’s a race against time to sell your existing property. This is where bridging loans come into play. But are bridging loans hard to get in today’s market? Let’s explore how these loans work and the steps you can take to improve your chances of approval.

Understanding Bridging Loans

Bridging loans are short-term loans designed to bridge the financial gap between buying a new property and selling your current one. They can provide much-needed liquidity, allowing you to purchase a new home before selling your existing property. Bridging loans typically cover the purchase price of the new property, along with the remaining mortgage on your current home.

While bridging loans can be a lifeline for those in between property transactions, they are not without risks. Interest rates tend to be higher than standard home loans, and approval can hinge on several factors, including your financial situation and the perceived risk by lenders.

Current Market Rates and Requirements

As of 2026, the Australian property market remains competitive, and bridging loans are a viable option for many homeowners. Interest rates for bridging loans typically range from 6.49% to 12%, depending on the lender and your financial profile.

Lenders will assess several factors when considering your application for a bridging loan. These include:

• Your credit history and credit score
• The equity in your existing property
• Your income and employment stability
• The value and saleability of your current and new property

With access to over 83 lenders, Esteb and Co can help you find a bridging loan that suits your needs and financial situation.

Steps to Secure a Bridging Loan

Securing a bridging loan can be more straightforward if you follow a structured approach:

1. Evaluate Your Financial Position: Understand your current financial situation, including your credit score, income, and existing debt obligations.
2. Consult a Mortgage Broker: Engage with a reputable mortgage broker like Esteb and Co, who can guide you through the process and provide access to a wide range of lenders.
3. Prepare Necessary Documentation: Gather all required documents, such as proof of income, tax returns, and details of your current mortgage and property.
4. Assess Property Values: Obtain an accurate valuation of both your existing and prospective properties.
5. Submit Your Application: With the help of your mortgage broker, submit your application to suitable lenders.
6. Review Offers Carefully: Once you receive loan offers, review the terms and conditions carefully to ensure they align with your financial goals.

Expert Tips and Considerations

Here are some expert tips to improve your chances of securing a bridging loan:

• Maintain a Good Credit Score: A strong credit score can significantly enhance your loan approval chances and may secure you a more favourable interest rate.
• Consider a Contingency Plan: Have a backup plan in case your current property takes longer to sell than anticipated.
• Negotiate Terms: Don’t hesitate to negotiate terms with lenders to find the most favourable conditions.
• Understand the Costs: Be aware of all costs involved, including fees and higher interest rates, and how they impact your financial situation.
• Plan for Repayments: Ensure you can manage the interest payments during the bridging period, especially if there are delays in selling your property.

Frequently Asked Questions

1. What is the typical duration of a bridging loan? Bridging loans usually last between 6 to 12 months, depending on the terms set by the lender.
2. Can I get a bridging loan with bad credit? While it may be more challenging, it’s not impossible. Working with a broker can help you find lenders who are more flexible with credit requirements.
3. Are bridging loans more expensive than regular home loans? Yes, they generally come with higher interest rates due to their short-term nature and the risk involved for lenders.
4. What happens if I can't sell my home before the bridging period ends? You may need to negotiate an extension with your lender or consider alternative financing options.
5. Do all lenders offer bridging loans? No, not all lenders offer bridging loans, but with access to over 83+ lenders, Esteb and Co can help you find those that do.
6. What is the maximum amount I can borrow with a bridging loan? This will depend on your financial situation, the equity in your current property, and the value of the new property.
7. Are there any tax implications with bridging loans? It’s advisable to consult with a tax professional to understand any potential tax implications of taking out a bridging loan.