Bridging Loans Australia: How They Work, What They Cost & the Risks (2026)

A bridging loan turns the sale of your old home into a deadline: every extra month adds interest, and any shortfall on the sale price stays on your loan for good. That makes planning the sale of the old home as important as choosing the loan.

What is a bridging loan?

A bridging loan is a short-term home loan that covers the gap between buying your new home and selling your old one. The lender holds both properties as security during the bridging period, and the loan unwinds when the old home sells.

Bridging exists because the property market doesn’t line up with your moving date. You’ve found the new place and don’t want to lose it, but your current home hasn’t sold. The bridging loan lets you buy now and sell over the following months.

How bridging loans work

A bridging loan is usually one approval in two parts:

1. The bridging loan: the part your sale will repay. Depending on the lender, interest on it is either added to the loan (capitalised) and cleared at settlement, or paid monthly as interest only.
2. The end debt: the loan you keep once the sale settles. Most lenders ask for normal repayments on this part from the start, and this is the loan they test your income against.

During the bridging period the lender holds mortgages over both properties. You settle the purchase, move in, and have a set time, up to 12 months at most big banks, to sell the old home and repay the bridging part.

Open and closed bridging

Closed bridging is when your current home has already sold and you know the settlement date; the loan covers a gap of weeks. Open bridging is when it hasn’t sold yet. Open bridging is the riskier of the two, for you and the lender, because the sale could take longer or bring less than planned. Westpac, CBA, NAB, ANZ and the St.George group all publish open bridging; Bendigo Bank covers both.

Peak debt and end debt

Two numbers matter more than any others in a bridging loan:

Peak debt

The most you owe during bridging:

• Outstanding balance on your existing mortgage
• + Purchase price of the new property
• + Stamp duty, conveyancing and loan fees on the new property
• + Interest added during the bridging period
• − Any savings you put in

Peak debt has to fit within the lender’s loan-to-value ratio (LVR) cap. Westpac, NAB and Bendigo Bank cap total lending at 80% of both properties’ combined value. Above that, the bridging loan won’t be approved as it stands.

End debt

What’s left after your old home sells and the proceeds pay the loan down. End debt is peak debt less the net sale proceeds (the sale price less agent commission, marketing and legal costs). The lender assesses your ability to repay the end debt, not the peak, on your normal income.

Worked example

You owe $400,000 on a home you expect to sell for $1,100,000. You’re buying a $1,500,000 home in New South Wales and expect to sell within six months, with the bridging interest added to the loan at 9.3%.

The lender tests your income against the $948,418 end debt, not the $2,018,068 peak. If you can comfortably repay the end debt, the bridging loan is on the table.

Interest and repayments

Lenders charge bridging interest in one of two ways:

• Added to the loan (capitalised). Westpac, St.George, Bank of Melbourne, BankSA and Bendigo Bank add the interest to the loan each month, with no repayments on the bridging part until the sale. That protects your cash flow while you hold two properties, but you pay interest on the interest. Their published rates were 9.28% to 10.29% on 6 October 2026, and Westpac’s rises a point after the first 3 months.
• Paid monthly, interest only. CBA and ANZ charge their standard variable rate and ask for interest-only repayments. CBA wants you to show you can pay interest only on the total debt; ANZ, that you can repay both loans.

Bankwest lets you choose. What a lender capitalises also differs: Westpac charges the interest on the bridging loan alone, Bendigo Bank on the whole loan for the new home. Repayments on the loan you keep after the sale usually start straight away. If you can afford to pay the bridging interest monthly, it costs less overall.

What a bridging loan costs

The interest is charged at the full rate on everything the sale will repay, not just the margin above a normal loan. If you sold first you would never borrow that money, so this is the real cost of buying first.

Interest at 9.3% a year, added monthly. 9.3% is an example rate: each half a percentage point changes the six-month cost on $100,000 by about $260.

On top of the interest:

• Loan fees: Westpac and St.George publish $600 to set up, $100 for documents, $8 a month and $350 to discharge; NAB a $600 application fee and $250 a year
• Valuations on both properties, which CBA requires
• Double holding costs: council rates, insurance and utilities on both properties until the sale settles
• Selling costs on the old home: agent commission, marketing and conveyancing, which you pay whichever route you take

In the worked example, six months of bridging costs about $51,812 in interest and fees on the $1,069,650 the sale repays. Selling first instead means paying rent between homes and moving twice: at $700 a week for six months plus a second move that is about $21,200. The calculator runs the same comparison with your figures.

Stamp duty on the new home is part of peak debt, because it is due around settlement, before your sale proceeds arrive:

How much equity you need

Peak debt has to stay under the lender’s cap. Westpac, NAB and Bendigo Bank lend up to 80% of both homes’ combined value, so your equity across both homes needs to be at least 20% of their value at the peak; NAB puts it exactly that way. ANZ lends up to 80% of the new home’s value. Most of the equity has to come from the home you’re selling, which is why bridging is hard with a large mortgage.

Lenders also typically want:

• Income that covers the end debt at the lender’s assessment rate, usually 3 percentage points above the actual rate
• A credible sale plan: the old home listed, or about to be, at a realistic price with an agent engaged
• Clean credit history on the borrower and the existing mortgage
• Valuations on both homes, which can come in lower than your own estimate
• Your existing loan with them, at some banks: CBA takes new customers only with at least $250,000 of ongoing debt, and ANZ and Bankwest need the existing loan moved to them

Bridging is harder to get than a standard home loan, and not every lender offers it. A broker who arranges bridging regularly will know which lenders are writing it and on what terms.

Which banks offer bridging loans

What each lender publishes about its bridging loan, read on 6 October 2026. A cell says “not published” where the lender doesn’t say. This is general information, not a recommendation, and rates change: confirm everything with the lender before you apply.

Other conditions worth knowing before you apply:

• Westpac: Owner-occupiers only. $600 establishment, $100 documents, $8 a month, $350 discharge. Westpac: Bridging loan, Westpac: Financing your next home
• Commonwealth Bank: Existing CBA customers, or new customers with at least $250,000 of ongoing debt. Both properties are valued. No early repayment penalty. CommBank: Bridging loan, CommBank: Bridging loan fact sheet
• NAB: $600 application fee and $250 annual fee. NAB: FlexiPlus Mortgage facility, NAB: Home loan interest rates
• ANZ: You must show you can repay both loans and may need savings. Non-ANZ customers refinance to ANZ first. ANZ: Bridging loan, ANZ: Bridging loans guide (PDF)
• St.George, Bank of Melbourne, BankSA: Same fees as Westpac: $600 establishment, $100 documents, $8 a month, $350 discharge. St.George: Relocation loan, Bank of Melbourne: Relocation loan, BankSA: Relocation loan
• Bankwest: Only alongside a Bankwest Simple Home Loan; the existing loan must be with Bankwest or refinanced to it. Bankwest: Home loans, Bankwest: Simple Bridging Home Loan TMD (PDF)
• Bendigo Bank: Covers homes sold but not settled, and homes not yet sold. Individual borrowers, one property sale. Bendigo Bank: Bridging finance fact sheet (PDF), Bendigo Bank: Schedule of lending interest rates (PDF)
• Bridgit (non-bank): Set-up fee from 0.60% of the loan, valuations from $220, discharge $450, document preparation $770. No exit fees. Bridgit: Rates and fees
• Yard (non-bank): Fees not itemised on the product page. Yard: Bridging loan
• Suncorp: Suncorp Bank's fee schedule lists the Bridging Loan as no longer available, and it stops taking home loan applications from 7 Oct 2026. Suncorp Bank: Lending fees and charges (PDF)
• Macquarie, ING: Neither publishes a bridging loan on its site; ask before you apply. Macquarie: Broker credit guidelines (PDF), ING: Next home loan

If your home doesn’t sell in time

Most of the big banks give you up to 12 months; Bendigo Bank and Bankwest about 6 for an established home. The cost rises before the term ends at some lenders: Westpac’s bridging rate goes up a point after the first 3 months. When the term ends and the home hasn’t sold, the lender can:

• Extend the term, if it allows one: ANZ says it generally won’t
• Charge more: CBA says it may apply its default rate or remove your discount after 12 months, and may help with the sale
• Ask you to cut the price or change how you’re selling, for example by going to auction
• Require a sale to recover the loan if nothing else works

If the price falls, the shortfall stays on your loan. A sale $50,000 under the estimate adds $50,000 to the end debt, about $316 a month over 30 years at 6.5%. A large drop can also push the end debt past what the lender approved, which brings a reassessment of your income.

How to protect yourself:

• Get an appraisal from an agent who sells in your street and plan on the lower end of it
• List the old home before you settle on the new one
• Set a date by which you’ll accept a lower offer, well inside the bridging term
• Check how long homes take to sell in your suburb before you commit
• Keep a cash buffer for repayments on the end debt and the double holding costs

Alternatives to bridging

Bridging is usually the most expensive way to move home. When your timing allows, these cost less:

Our guide to the alternatives to a bridging loan compares each in detail, and the deposit bond guide explains how a bond works on a contract. A “relocation loan” at St.George, Bank of Melbourne or BankSA is their bridging loan, so it is in the table above. For the decision itself, read Sell first or buy first?

Situations people ask about

You decide to keep the old home as a rental

The bridging loan was approved on the basis that the sale repays it. To keep the old home you would refinance the whole debt into ordinary loans, and the lender would test your income against all of it, with the expected rent counted in.

Tax works on what the money was used for, not which property secures it. The ATO’s own example is a couple who borrowed $400,000 against their old home to buy a new one, then rented the old home out: the interest on that $400,000 is not deductible, even though the loan is secured on the rental. Only the debt that bought the old home, whatever was still owing on it, can be deductible. Speak to an accountant before you restructure.

Renting out the old home while it’s for sale

The ATO lets you treat both homes as your main residence for up to 6 months when you buy before you sell, so the old home stays free of capital gains tax. One condition is that the old home wasn’t used to earn income, such as rent, in the 12 months before the sale while it wasn’t your home. Renting it out can cost you that exemption.

A tenant also affects the sale. A buyer who wants vacant possession means notice to the tenant, and a fixed-term lease can’t be ended early because of a sale. In New South Wales the notice is 30 days once a contract requiring vacant possession is signed. In Victoria it is 90 days. In Queensland it is 2 months after the contract is signed, on a periodic agreement.

Downsizers and retirees

When the next home is cheaper than the one you’re selling, the end debt can be small or nil, which makes bridging easier to justify. Lenders still need to be satisfied you can meet the repayments during the bridging period, which can be harder without a salary.

If you’re 55 or older and have owned the home for 10 years or more, you may be able to put up to $300,000 of the sale proceeds into super as a downsizer contribution, each, within 90 days of settlement. Our downsizer’s guide covers the move as a whole.

Building while you live in the old home

Westpac and the St.George group cover buying land and building with a builder within their 12-month term, and Bendigo Bank allows 12 months for land or construction against 6 for an established home. ANZ won’t make the construction loan the bridging part. A build is paid in stages, and delays push out the date you move and sell, so leave room in the term.

Buying at auction

An auction purchase is unconditional, so get bridging pre-approval before the day. The deposit, often 10%, is due when you sign, before your sale proceeds arrive; a deposit bond can stand in for it if the contract allows.

Putting it together

When bridging is the right call

Bridging usually wins on the numbers when:

• The market is moving fast and the new property won’t wait for a subject-to-sale offer
• You have plenty of equity in the existing home and can comfortably repay the end debt
• Rent and a second move would cost close to the bridging interest anyway
• The cost of losing the new home would be high
• You’re confident your old home will sell within the term: a good agent, a realistic price, a prepared property

Bridging tends to be the wrong call when:

• Your equity is thin and peak debt would go past the lender’s cap
• The market is soft and comparable homes are taking 4 months or more to sell
• You don’t have a credible sale plan or a strong selling agent
• Repaying the end debt would be a stretch

The bridging loan process

1. Get an appraisal on your existing home from a local agent who sells in the area. It is the basis of the peak and end debt figures. Request a free appraisal.
2. Run the numbers in the bridging loan calculator, then talk to a lender or a broker who arranges bridging regularly.
3. Get pre-approval for the bridging loan before you sign a contract on the new home, especially at auction.
4. Engage your selling agent and prepare the old home so it is on the market by settlement of the new one, or soon after.
5. Settle the new property using the bridging loan and move in.
6. Sell the old home within the bridging term.
7. Settle the sale. The proceeds repay the bridging part and you’re left with the end debt you were assessed for.