Bridging Finance: Statistics and Market Insights – Why It Might Be the Best Next Step

When buying and selling a home, it may be worth considering bridging finance to save you money, time and stress. Unfortunately, it’s often misunderstood, and I have addressed some of the concerns in my blog last month: 7 Reasons Why Bridging Finance Is a Smart Move When Buying and Selling.

In reality, bridging finance can be a smart financial move. Yes, it might appear expensive at first, but there are many costs to buying and selling a home that are often unplanned for, and bridging finance may be just the thing you need to help you transition cost effectively. When structured properly, it’s typically short term and designed to support smoother property transitions. Here are valuable statistics to help you understand a little more about bridging finance – when it’s used and how it works.

Did you know that bridging finance use rises in moving markets?

According to lender data and commentary from CoreLogic and major banks, demand for bridging finance increases during periods of strong property turnover, particularly when:

• Prices are rising or stabilising
• Stock levels are low
• Buyers need to act quickly to secure a home

This is common in metropolitan markets like Melbourne and Sydney, where timing mismatches between buying and selling are frequent.

A typical bridging loan term is short

Industry-wide data shows:

• 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 reinforces that bridging finance is usually a temporary solution, not a long-term debt strategy.

The majority of borrowers are owner-occupiers

Lender reporting indicates:

• Around 70 to 80 percent of bridging finance borrowers are owner-occupiers, not investors
• Most are families upsizing, downsizing, or relocating
• Common age bracket is 40–65, where people often have substantial equity but timing constraints

This supports the idea that bridging finance is primarily a transition tool to ease stress and save you money.

Related Article: https://keystonebrokers.com.au/news/7-reasons-why-bridging-finance-is-a-smart-move-when-buying-and-selling/

Sale price outcomes improve when sellers are not under pressure

While there are no “bridging-only” sale price studies, CoreLogic and REIV data consistently show that:

• Properties sold without urgency or discounting achieve 3–7 percent higher sale prices on average
• Time pressure is one of the strongest predictors of price discounting

On a $1.2 million home, even a modest 3 percent improvement equals $36,000, which often outweighs typical bridging finance costs over a few months.

Interest costs are often lower than people expect

Based on lender rate cards and broker aggregation data:

• Bridging finance interest is commonly 1–2 percent higher than standard variable home loan rates
• Many lenders allow interest-only payments or capitalised interest during the bridging period
• Average total interest cost for a 3–6 month bridge often falls in the $15,000–$30,000 range, depending on loan size and structure

This is why brokers consistently encourage clients to look at net outcomes, not just headline rates.

Default rates are low when structured correctly

According to lending risk commentary from APRA and major lenders:

• Bridging loans have low default rates when there is sufficient equity
• Risk increases mainly when borrowers overestimate sale prices or timelines
• Broker-led bridging loans perform significantly better than direct-to-bank applications due to stronger exit planning

Broker involvement significantly improves outcomes

Internal lender reviews and aggregator data show that:

• Bridging loans arranged via mortgage brokers are more likely to settle within the planned timeframe
• Exit strategies are clearer
• Borrowers report lower financial stress and fewer forced sale scenarios

This is why many lenders prefer bridging finance applications to come through experienced brokers.

The data consistently shows that bridging finance is short term, used mainly by owner-occupiers, carries manageable risk when equity and planning are sound, and more often supports better overall financial outcomes when it removes pressure from selling.

Everyone’s situation is unique so bridging finance may or may not work for your specific situation, but let’s identify if there are any benefits. Give me a call on 0430 511 500 and let’s have a chat to see if it might work for you.