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What is a bridging loan?
A bridging loan is a short term loan designed to cover the gap between buying a new property and selling your existing one. It gives you the ability to buy before you sell, so you are not forced into rushed decisions, awkward timing, or the stress of having to sell first just to fund your next purchase. Think of it as temporary finance that holds everything together while the pieces fall into place.
At Zella Money, we work with clients across Australia who want to upgrade their home, secure a property at auction, or simply avoid the chaos of trying to synchronise two settlements perfectly. A bridging loan could be the tool that makes a seamless property upgrade genuinely possible.
How does bridging finance work?
During the bridging period, your existing mortgage and your new loan are typically combined into a single bridging loan amount. Interest is often capitalised, meaning it accumulates during the bridging loan term rather than requiring you to make repayments on both loans simultaneously. Once your existing property sells, the proceeds reduce the debt and you are left with a standard home loan on your new property.
The bridging loan term is usually between six and twelve months. A 6 month bridging arrangement suits most situations, but 12 month bridging options are available depending on your circumstances and the lender. The bridging loan LVR, which is the loan to value ratio of your combined debt against your properties, is a key factor lenders assess when reviewing a bridging finance application.
At Zella Money, we access loan options from banks and lenders across Australia, which means we can compare bridging loan interest rates, structures, and bridging loan fees across a wide range of lenders rather than locking you into a single option.
Who is a bridging loan for?
Bridging loans are most commonly used by people who want to buy before they sell. If you have found your dream home and do not want to lose it while waiting for your current property to settle, bridging finance could give you the breathing room to act. It is also used by buyers who have exchanged contracts on a new purchase but have not yet received proceeds from a sale, or by those who want to avoid selling first and renting in between.
Auction finance is another common use case. When you buy at auction, settlement timelines are fixed and non-negotiable. A bridging loan can provide the urgent finance needed to meet those deadlines without panic.
If you are considering upgrading your home or expanding your property portfolio, it is worth understanding whether a bridging loan fits your situation before assuming you need to sell first.
What are the costs involved?
Bridging finance costs are generally higher than a standard home loan. The bridging loan interest rate tends to be a variable interest rate and sits above typical home loan rates, which reflects the short term nature of the product and the additional risk lenders take on. Bridging loan fees can include application fees, valuation fees, and in some cases exit fees, so it is important to understand the full picture before proceeding.
Because interest capitalisation means interest is added to the loan balance rather than paid monthly, the total amount owing can grow during the bridging period. This is not a problem if your exit strategy is clear and your property is likely to sell within the expected timeframe. However, it is one of the bridging loan risks worth understanding before you commit.
At Zella Money, we take the time to walk through bridging finance costs with you in plain language, so you understand exactly what you are signing up for. No surprises, no fine print left unexplained.
What is an exit strategy and why does it matter?
Every bridging loan approval hinges on a credible exit strategy. Lenders want to know how and when the loan will be repaid. In most cases, the exit strategy is the sale of your existing property. The cleaner and more realistic your plan to sell property and exit the bridging loan, the stronger your application is likely to be.
If your existing property is already on the market or under contract, that works in your favour. If it has not yet been listed, lenders will still assess the situation but will look closely at the property value, location, and realistic sale timeline.
A bridging loan is not a long term solution, and it should not be treated as one. It is a purposeful, time-limited tool. Used well, it removes the pressure of having to sell first and gives you the confidence to act on the right property at the right time.
Is a bridging loan right for you?
Not every situation calls for a bridging loan. There are bridging loan alternatives worth considering depending on your equity position, income, and timeline. Equity release from your existing property, for example, could be another way to access funds for a deposit without needing a full bridging structure. Home loan refinancing is another option some clients explore before deciding a bridging loan is the right fit.
The right answer depends entirely on your circumstances, and that is exactly the kind of conversation Zella Money is here to have with you. We do not push products. We look at your situation, explain your options honestly, and help you make a decision that actually makes sense for where you are headed.
Getting a home loan can feel overwhelming. It doesn't have to be. At Zella Money, we've built a process that keeps you informed, supported, and confident at every step. Here's how we work together.
Let's Have a Chat: Everything starts with a conversation. We take the time to understand where you are right now, where you want to go, and what matters most to you. No pressure, no jargon. Just an honest discussion about your situation and your goals.
We Dig Into the Detail: Once we know what you're working towards, we take a closer look at your finances. Income, expenses, savings, existing debts. We look at the full picture so we can give you advice that's actually relevant to your life, not just a generic answer.
We Research the Market: With a clear picture of your situation, we search across a wide panel of lenders to find options that genuinely suit you. We're not tied to one bank or one product. Our job is to find the right fit, not the easiest one.
We Walk You Through Your Options: We present a shortlist of suitable loan options and explain each one in plain language. Rates, fees, features, flexibility. We cover it all so you can make a decision you feel good about. No hard sell, ever.
We Handle the Application: Once you've chosen the loan that works for you, we take care of the paperwork. We prepare and lodge your application, liaise with the lender, and keep things moving. You don't need to chase anyone.
We Keep You in the Loop: From application through to approval, we stay in regular contact. You'll always know where things stand. If the lender needs anything extra, we handle it quickly and let you know what's happening and why.
Settlement and Beyond: Approved and settled? We're still here. We check in after settlement to make sure everything's running smoothly, and we stay available as your circumstances change. One loan is just the beginning.
Ready to talk to the team? We're excited to meet you! Shoot though an enquiry and we'll get back to you ASAP!
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We used Jaclyn the Senior Finance Broker to buy our first home and she was amazing! She is so knowledgeable, made us feel valued and turned our dream into a reality. Can not recommend her enough! Shout out to Sal as well the Settlements Manager who helped make settlement nice and simple.
Chris Fallon
I cannot recommend Zella highly enough! Charlotte and the wider Zella team were with us every step of the way! They truly had our backs in securing the best home loan for our family. Prompt, informative and easy to deal with! Thank you so much for all your hard work!! xx
Olivia Jolliffe
I had a great experience with Zella from start to finish. The team was friendly and made our refinance super easy. Highly recommend!
Casey Sharrock
Huge thanks to Tara and her team! Highly recommend !
Maddie B
Bought my first home through Zella and so so glad I did! Georgia was extremely helpful from the start and patient with answering all of my stupid questions. Thank you again for everything!
Christine Untario
I really appreciated working with the team. They were really efficient, no question went unanswered and they were lovely to work with. I felt in good hands!
Jane Eldershaw
Tell us a little about where you're at, and we'll take it from there.
Let's chat
For most standard lending appointments, no. We're paid by the lender once your loan settles. In rare cases where applications are highly complex, a fee may apply, but we'll always discuss and disclose this with you upfront.
Yes. We use bank-grade security systems and are fully compliant with Australian privacy regulations. Your information is treated with the highest level of care and confidentiality.
Absolutely. We assist clients across Australia and have a thorough understanding of different state and territory regulations, grants and incentives.
We keep communication clear and simple. Your broker will be available via email and phone, and we manage documentation securely through our electronic portal. Your initial meeting can be held over the phone or by video call, depending on your preference. We're always just a message away if you need support.
To get started, we'll need documents such as identification, proof of income (like payslips or tax returns), details of your assets and liabilities, and statements for any existing loans or credit facilities. Your broker will give you a personalised checklist so you always know what's needed.
Your borrowing capacity depends on factors like your income, expenses, existing debts, credit history and the policies of individual lenders. We'll work with you to assess your position and give you a clear understanding of what's achievable.
Yes. Our brokers stay across all available incentives, including first home buyer grants, stamp duty concessions and guarantee schemes. If you're eligible, we'll help you understand how to apply and make the most of these opportunities.
Absolutely. We specialise in guiding first-home buyers through the process with tailored advice, clear communication and plenty of support along the way.
Banks offer their own products. We offer you options. As your broker, we take the time to understand your goals and financial circumstances before searching across a broad panel of lenders to find solutions that genuinely suit you. We also stay across the latest policies, grants and niche lender options that could make a real difference to your outcome.
We conduct a credit check early in the process to help us best assist you. Your score is safe with us. If you have any concerns about your credit history, please speak with your broker — we're here to support you.
Pre-approvals generally last between three and six months, depending on the lender. We'll guide you through the timeline and help you refresh your approval if your property search takes a little longer than expected.
Once your loan is formally approved, we'll guide you through the settlement process. We work closely with your solicitor or conveyancer to ensure all requirements are met and everything runs smoothly right through to settlement day.
Definitely. We understand the nuances of self-employed income and have extensive experience presenting applications for business owners in a way that resonates with lenders.
No. In addition to home loans, we also assist with commercial lending, investment loans, refinancing and asset finance. Whatever your finance goals, we're ready to support you.
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