Bridge Loans – Unlock Funds Fast When Banks Say No

Are you in the midst of selling your current home and buying a new one, but worried about the financial gap between the two transactions? Bridge loans might be the solution you're looking for. With the ever-changing landscape of the housing market, understanding whether bridge loans still exist and how they can benefit you is crucial. Let’s delve into this topic to help you navigate your options.

Understanding Bridge Loans

Bridge loans are short-term financing options designed to 'bridge' the financial gap when you're transitioning from one property to another. These loans provide you with the funds needed to purchase a new home before selling your existing property. Typically, bridge loans are secured against your current property and are meant to be paid off quickly – often within 6 to 12 months.

In Australia, bridge loans are particularly useful in a competitive real estate market where timing is key. They allow homeowners to act swiftly when an opportunity arises. However, they come with their own set of terms and conditions, which must be thoroughly understood before proceeding.

Current Bridge Loan Market in 2026

As of 2026, bridge loans are still very much a viable option for Australians, with several lenders offering competitive rates and flexible terms. The interest rates for bridge loans typically range from 6.49% to 12%, depending on the lender and your financial situation. At Esteb and Co, we have access to 83+ lenders, ensuring we can find a solution tailored to your needs.

Eligibility criteria for obtaining a bridge loan generally include having significant equity in your existing property, a sound credit history, and a feasible exit strategy (such as the imminent sale of your current home). Lenders will also assess your ability to service the loan during the bridging period.

Steps to Secure a Bridge Loan

Securing a bridge loan involves several key steps, which can be navigated with the right guidance:

1. Assess Your Financial Situation: Begin by evaluating your financial health, including your equity, credit score, and current loan obligations.
2. Consult with a Mortgage Broker: Engaging with a mortgage broker like Esteb and Co can provide you with access to a wide range of lenders and options.
3. Prepare Documentation: Gather necessary documents, including proof of income, details of your current mortgage, and a clear exit strategy.
4. Submit Your Application: Work with your broker to submit an application that meets the lender’s requirements.
5. Receive Approval and Terms: Once approved, review the terms carefully to ensure they align with your financial goals.
6. Utilise the Loan: Use the funds to secure your new property, keeping in mind the repayment period and terms.

Tips and Considerations

Before committing to a bridge loan, consider the following expert advice:

• Have a Clear Exit Strategy: Ensure you have a concrete plan to sell your existing property within the loan period to avoid financial strain.
• Understand the Costs: Be aware of additional costs such as valuation fees, setup fees, and higher interest rates during the bridging period.
• Stay Informed: Regularly consult with your mortgage broker to stay updated on market trends and potential changes in interest rates.
• Plan for Contingencies: Have a backup plan in case your property sale takes longer than expected.

Frequently Asked Questions

• What is the typical duration of a bridge loan? Bridge loans usually last between 6 to 12 months, depending on the lender and your agreement.
• Are there risks associated with bridge loans? Yes, risks include the potential for higher interest rates and the possibility that your existing property may not sell within the loan period.
• Can I get a bridge loan with a low credit score? While a good credit score improves your chances, some lenders may consider your application if you have significant equity and a solid exit strategy.
• Do I need to make repayments during the bridging period? Some lenders might require interest-only payments during this period, while others may capitalise the interest.
• How does a bridge loan impact my borrowing capacity? A bridge loan can temporarily increase your debt level, potentially affecting your borrowing capacity for other loans.
• Is a bridge loan the same as a home equity loan? No, a home equity loan is a long-term financing option secured by the equity in your home, whereas a bridge loan is short-term and used specifically for property transitions.
• Can Esteb and Co help me find a suitable bridge loan? Absolutely, with access to 83+ lenders, Esteb and Co can help tailor a bridging solution to fit your unique circumstances.