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Bridging the gap

30 NOV 1999 • By Phillip Tarrant • 3 min read • Hotspots

Bridging finance might just be the solution for your buying and selling cash flow concerns.

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When you’re on the hunt for a new home, chances are the sale of your existing place is unlikely to align perfectly with the purchase of your new home.

That means that most sellers are faced with the daunting prospect of either shouldering the burden of two mortgages should they buy before their home has sold, or a stint in rental property while they find a new home.

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If you can’t face the prospect of weeks or months living out of cardboard boxes in a short term rental or a motel, then a bridging loan may be the solution you’re looking for.

How does it work? In general terms a bridging loan can be used to cover your financing requirements if the sale and purchase settlement dates of properties differ by a short period. It can also offer you a solution for a longer period of up to six or 12 months, if, for instance, you’ve found a new property but are yet to have sold your existing home or perhaps haven’t finished building your new one.

Like any home loan you will accrue interest on the amount borrowed. Your repayment requirements will depend on the lender but in most instances it will be interest only. In some cases no repayments will be required at all, but it is always wise to make repayments to avoid your interest obligations spiralling out of control.

To bridge or not to bridge? While it may sound like an ideal solution, bridging finance requires careful consideration – just like any other financial decision. Be sure to seek professional, sound advice tailored to your individual circumstances and needs. We can help you determine whether bridging finance is your best option, or if perhaps another solution, such as renting between properties, will work out better – so give us a call.

BENEFITS OF BRIDGING • You can buy a new home without worrying about selling your existing home first

• If you’re building a new home you don’t have to worry about renting in between

• There is less pressure to sell your existing home quickly, meaning you won’t be pressured into accepting a lower sales price

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Phillip Tarrant

Phillip Tarrant

AUTHOR

Phillip Tarrant is one of Australia’s leading property commentators, with more than a decade at the forefront of conversations shaping the nation’s property investment market.

As the long-time host of the Smart Property Investment Show and a regular commentator across property, finance and business, Phillip has interviewed thousands of investors, economists, advisers, brokers, agents and industry leaders, giving him a unique perspective on the trends, policies and market forces influencing Australian property.

Beyond property commentary in the media, Phillip is an active property investor himself, with first-hand experience building and managing a diversified property portfolio across multiple markets and cycles. His insights combines this practical investor perspective with deep exposure to the broader property and financial services ecosystem.

Phillip is also CEO and co-founder of Managed, an Australian property payments and technology platform transforming the way property managers, landlords and tenants manage rental payments and property transactions.

Through his writing, podcasts and industry engagements, Phillip focuses on cutting through market noise, challenging conventional thinking and helping investors make more informed, strategic decisions. His commentary regularly explores property markets, lending, taxation, regulation, investment strategy and the changing dynamics of Australia’s housing sector.

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