Pros and Cons of Bridging Loans
Better Loan Solutions in Mornington Peninsula • Learning Centre • Insights
Better Loan Solutions in Mornington Peninsula • Learning Centre • Insights
Anyone who has sold a property with the intention of upgrading understands the frustration of not knowing whether to sell or buy first.
While there’s no right or wrong answer, there are ways to help mitigate the stress of buying and selling through the use of a bridging loan.
A bridging loan allows you to acquire your next property before selling your current one, streamlining the transition between homes.
However, bridging loans come with their own set of advantages and disadvantages.
Bridging loans typically come with higher interest rates than traditional home loans. Since they are short-term loans, the higher interest rates can significantly impact your overall costs, especially if your existing property doesn't sell quickly.
The short-term nature of bridging loans means that if your current property does not sell within the agreed-upon loan term, you may incur substantial interest charges, putting a financial strain on your budget.
Bridging loans often involve capitalised interest, which can add up quickly, increasing the total debt you'll need to repay upon selling your current property.
Borrowers should be aware of potential fees associated with bridging loans. These may include application fees, valuation fees, and other associated costs.
What you need to consider.
Before taking on a bridging loan, it's vital to think about these different factors:
It’s important to know your chances of success before applying which is where a finance broker can really
help.
Lunch & Learn Workshop // 4 September, 2026 - 12:00 - 1:30pm
$35pp includes lunch
Many business owners believe growth comes from more sales. But in reality, the strongest and most profitable
businesses grow by improving how the business works, not just by selling more. This session is designed to change that. The
5-Critical Financial Metrics
is a practical workshop that shows you where small, targeted changes can create disproportionately big improvements in profit, cashflow and
sustainability.
MP SHIRE SMALL BUSINESS FESTIVAL / LIVE WORKSHOP
Friday 31 August, 4:00pm-6:00pm
Join our practical,
educational workshop designed to help business owners understand the lending process and in preparation for funding conversations, learn how lending decisions are really made and what banks actually look for.
MP SHIRE SMALL BUSINESS FESTIVAL / LIVE WORKSHOP
Tuesday 25 August, 10:00am-12:00pm
This practical, confidence-building session is designed to give business owners control. Know Your Numbers is a hands-on workshop created specifically for non-financial business owners who want clarity and confidence in their decision-making.