If you’d like to buy a new home before you sell your existing one, a bridging loan can provide the money you need to secure your new home. It’s suitable for existing customers who have bought a new home and need to settle, but have not received the money from the sale of their existing home. In other words, a bridging loan covers the gap between settling on your new home and receiving money from the sale of your existing home .
You’ll still need to arrange a deposit and cover any additional costs for buying your new home.
During the bridging period, you’ll make repayments on both your bridging loan and your existing home loan. Once you sell your existing home, the proceeds will pay out your original mortgage, and any additional money will go towards reducing the mortgage on your new home.
Benefits of a bridging loan
- Search for a new home with confidence, even if you haven’t settled your existing home yet
- Flexibility of payment types - choose between principal and interest repayments, or interest only payments
- Make unlimited lump sum payments, depending on the terms of your loan.