Best Bridging Loans in Australia (2025 Guide): Buy Before You Sell, Rates, LVRs & Cash-Flow Explained
Buying your next home before selling your current one? This 2025 Australian Bridging Loans Guide explains how bridging finance works, how lenders assess peak debt, LVR limits, valuations, cash-flow impact, interest-only periods and settlement timing. Matcheroo compares real bridging loan options based on your equity, income, property value, postcode rules and contract status—so you only see lenders you can actually qualify for. We break down open vs closed bridging, interest capitalisation, pricing, fees and risk so you can move confidently without missing your dream home.
How bridging finance works
Bridging loans cover the gap between buying and selling. Lenders calculate peak debt (existing loan + new purchase + costs) and end debt (what’s left after your sale proceeds are applied). During the bridge you often pay interest-only or capitalise interest onto the balance, then convert to a standard loan after settlement of the sale.
Open vs closed bridging
Closed bridging has an unconditional contract of sale with a known settlement date—usually easier and sharper.
Open bridging has no sale contract yet—policy is tighter, terms are shorter and valuations matter more.
LVR, pricing and cash flow
Maximum LVRs are typically lower for bridging than for standard loans, and can depend on property types and locations. Pricing reflects risk and whether interest is capitalised or serviced. We model repayments (or capitalised interest) so you know the cash-flow impact during the bridge.
Documents & valuations
You’ll usually need purchase and sale contracts (if available), current loan statements, ID, rates notices, and property details for both securities. Lenders may order separate valuations and check marketability to confirm exit.
Timelines and settlement
Allow time for two valuations and any builder or strata checks. If you have a sale contract, we align the bridging term to its settlement. If not, we set realistic terms and contingency options.
Risks and safeguards
Longer sale times, lower-than-expected sale price or rate changes can affect the exit. We plan sensible contingency buffers, avoid unnecessary cross-collateralisation where possible, and outline fall-back options.
Helpful tools: Repayments → /calculators/home-loan-repayments · Borrowing power → /calculators/borrowing-power · Home loan comparison → /home-loan-comparison
FAQs
How is interest charged on a bridging loan?
Usually interest-only on the drawn balance; some lenders allow interest to be capitalised during the bridging term.
Do I need an unconditional sale contract?
Not always. Closed bridging requires one; open bridging doesn’t, but policy and LVR caps are tighter.
What LVR can I borrow to on bridging?
It varies by lender, property and whether the bridge is open or closed. We’ll show realistic LVRs for your securities.
Can I capitalise interest instead of making repayments?
Often yes, within policy and up to the approved limit. We’ll model peak debt to ensure the exit still works.
How long does bridging finance last?
Common terms are up to six months for open and longer for closed, aligned to your sale settlement. Timelines vary by lender.
Will matching affect my credit score?
No. There’s no hard credit check until you choose to apply.