What is Bridging Finance?
Sometimes when you’re buying a new property, you need to settle before your current home sells. That gap between transactions is where bridging finance can help. If approved, it can cover the purchase while you wait for sale proceeds to come through.
Before you commit, I can help you check the highest amount you would owe during the overlap and whether interest is paid regularly or added to the balance. The agreement determines repayments and maturity obligations. Allow for two-property holding costs and a fallback if the sale is delayed or proceeds are lower than expected.
Types of Bridging Finance
Closed bridging finance
Closed bridging generally relies on unconditional sale and purchase agreements with confirmed settlement dates; check the lender’s exact conditions. You buy your new home first, then your sale settles soon after. For the overlap you may own both properties. Agreed dates and prices reduce uncertainty, but settlement can still be delayed and lender approval is still required.
Open bridging finance
This is when you’ve bought a new property but haven’t yet sold your current home. Because there’s no confirmed sale date or price, this option carries more risk. Open bridging may be available from some banks or specialist lenders, subject to their current criteria. Approval depends on the proposed sale, equity, affordability and repayment plan; it is not guaranteed.
Finding the Right Lender
As a mortgage broker in Tauranga, I can help compare available options from the lenders I work with. Whether you’re buying in Pyes Pa or elsewhere in the Bay of Plenty, the comparison needs to include costs, repayment obligations and the risks if your sale is delayed.
Talk to me before you finalise your sale or purchase so we can discuss the funding and timing you need to check. For the wider transaction sequence, see my selling-and-buying guide.
Talk to Best Mortgages
At Best Mortgages, I can help assess the proposed borrowing and coordinate mortgage-related steps with your agent and lawyer. Your lender must confirm the funding, and your lawyer should check the sale and purchase obligations.
Contact me for a no-obligation chat about the proposed sale, purchase and any gap between them. You can also read client reviews or browse my other mortgage guides.
Best Mortgages — Operated by Ewald Biesenbach (FSP 320426) under The Best Limited (FSP 724451 – NZBN 9429043352067). The Best Limited holds a Financial Advice Provider licence issued by the Financial Markets Authority.
How long does bridging finance usually run?
The term depends on the lender and proposed sale and purchase. Check the maturity deadline, interest and fees, and what happens if the sale is delayed; an extension or refinance is not guaranteed.
Is bridging finance interest-only?
Some facilities use interest-only payments or other agreed interest arrangements. Check what must be paid during the bridging period and what is added to the balance. Repayment and the remaining loan after sale depend on the agreement and actual sale proceeds.
What’s the difference between closed and open bridging?
Closed bridging generally involves unconditional sale and purchase agreements with confirmed settlement dates; open bridging involves a property that has not yet sold. Open bridging carries more uncertainty about timing and sale proceeds, and the lender’s specific terms matter.
Can I get bridging finance if my home hasn’t sold yet?
Possibly. Some banks and specialist lenders consider open bridging, subject to criteria. The assessment can include equity, affordability, expected sale proceeds, marketing and the plan if the sale takes longer or achieves less than expected.
What are the main risks with bridging finance?
A delayed sale or lower sale price can increase interest costs and leave more debt than planned. Check peak borrowing, payments during the overlap, fees, maturity deadlines and the fallback if the sale or refinance does not proceed. Discuss the contract and security risks with your solicitor.
