7 Reasons Why Bridging Finance Is a Smart Move When Buying and Selling

Buying your next home while selling your current one can feel like walking a tightrope. The timing doesn’t always line up, and the stress of this can be high. Where will you live, what about the kids, will you need to rent, where will you store your household goods?

This pressure can lead to rushed decisions and cost you unnecessary expenses in the long run. This is where bridging finance can be incredibly valuable.

But, when a client approaches me and is stressed about the window of selling and buying, and I suggest bridging finance which may cost a few thousand dollars, the first response is always “no way, I won’t pay that for bridging finance!”. Although this is an understandable response, it’s better to consider the outcomes you want and your longer term goal.

Let’s look at some facts about bridging finance. Firstly, it’s a short-term loan designed to help you buy a new property before your existing one is sold. Used correctly, it can give you time, flexibility, and control.

Industry-wide data shows that:

• Most bridging loans are taken for 3 to 6 months
• Over 80 percent are repaid within 6 months
• Less than 5 percent extend beyond 12 months

This tells us that bridging finance is usually a temporary solution, not a long-term debt strategy.

Below I’ve outlined seven reasons why bridging finance can be a smart option for some clients. I only recommend bridging finance if it’s the right financial decision and supports your desired outcomes.

1. It buys you precious time in the small buying and selling window

One of the biggest advantages of bridging finance is time. Instead of racing to sell your home before committing to a new purchase, you can move forward with much more confidence. Time allows you to make better decisions, avoid panic selling, and plan your move properly rather than reacting under pressure.

2. You can stay in your home while you sell

Bridging finance often allows you to remain in your current home while it’s on the market. This is especially valuable for families, people working from home, or anyone who wants stability during the selling process. You avoid short-term rentals, moving twice, or putting your life on hold while waiting for a sale to settle.

3. You’re not forced to accept the first offer

When sellers are under time pressure, they often accept lower offers just to get the deal done. Bridging finance removes that urgency. You can wait for the right buyer and the right price, rather than settling for less because the clock is ticking.

4. It helps you secure the home you really want

The best properties don’t always wait. Bridging finance can give you the ability to act quickly when the right home comes up, without having to make your purchase conditional on selling first. This can be a major advantage in competitive markets where clean, confident offers stand out.

5. Look at the bigger picture, not just the cost of finance

A common hesitation around bridging finance is cost. While the interest rates are often higher than standard home loans, it’s important to look at the overall financial outcome, not just the line item for interest.

For example, imagine you own a home worth $1.2 million. You take out bridging finance for six months, and the total cost of that finance is around $25,000. If having the time to sell properly allows you to achieve even $40,000 or $50,000 more on your sale price, the maths starts to look very different. In many cases, the net result is positive, not negative.

6. It can reduce emotional and financial pressure

Selling and buying at the same time is one of life’s more stressful events. Bridging finance reduces the emotional load by giving you breathing space. When people feel calmer and more in control, they tend to negotiate better, make clearer decisions, and experience a smoother transition overall.

7. It allows for better planning and strategy

Bridging finance isn’t a one-size-fits-all solution. When structured properly, it can be tailored to your timeline, cash flow, and exit strategy. A good mortgage broker will help you plan how long you need the bridge for, how repayments are managed, and what happens once your property sells. This strategic approach is what turns bridging finance from a risk into a tool.

Bridging finance means you don’t have to rush or stretch yourself. It’s about creating options. For the right person, in the right situation, it can mean better timing, better decisions, and a better financial outcome overall.

If you’re thinking about buying before selling, or simply want to understand whether bridging finance could work for you, please give me a call on 0430 511 500 or email me at glen@keystonemortgagebrokers.com.au and let’s have a chat about your options. As an experienced mortgage broker, I’ll help you weigh up the real costs and benefits based on your situation.

Sometimes, paying a little to gain time and flexibility can be the best financial decision for the longer term.