It can be, if your situation genuinely calls for it — most commonly when you’ve found your next property but haven’t sold your current one yet, and you don’t want to rent in between or risk missing out on the purchase. It works best when you have a clear, realistic exit strategy (usually the sale of your existing property) and enough equity to support both properties during the bridging period. It’s not the right fit for every situation, which is why running the numbers with a broker before committing matters.

The main risk is timing — if your existing property takes longer to sell than expected, interest continues accruing (often capitalised onto the loan balance) and your costs grow. If the property eventually sells for less than expected, you could be left with a larger ongoing loan balance than planned. Bridging loans can also require two property valuations, and if your current lender doesn’t offer bridging finance, you may need a fresh application with a new lender altogether.

Bridging loan rates are typically higher than standard home loan rates, reflecting the short-term and higher-risk nature of the lending. Interest is usually charged on the combined “peak debt” (your existing mortgage plus the new purchase) and is often capitalised rather than paid monthly, meaning it’s added to the balance and settled when your existing property sells. The total cost depends heavily on how long the bridging period runs — the faster your existing property sells, the less it costs overall.

Yes — a few common alternatives include: selling first and renting temporarily while you find your next property (avoids bridging costs entirely, but means moving twice), negotiating a longer settlement period on your new purchase to align with your sale, or using a deposit bond instead of cash for the new purchase if you’re confident about your sale timeline. Which alternative makes sense depends on your risk tolerance and how the local property market is moving.

Peak debt is the combined total of your existing mortgage plus the loan needed for your new property, before your existing property sells. Lenders typically allow bridging loans up to 80% of this peak debt in standard cases, occasionally stretching to 90% for well-qualified borrowers, though this usually requires Lenders Mortgage Insurance. Very few lenders will go to 100%, and those that do tend to have strict conditions attached.

Yes — this is one of the more valuable uses of bridging finance. It allows you to stay in your current home while your new one is being built, rather than renting for the duration of construction. Lenders typically require a fixed-price building contract, and because build timelines can run long, brokers often negotiate a longer bridging period (commonly 12 months) to avoid pressure to sell before the new home is ready.