In a nutshell, bridging finance is a short-term home loan, used to enable homeowners to buy a new property before selling their existing one. This takes the stress out of trying to line up the sale of the existing house with the purchase of the next.
There are usually a few hoops to jump through to get bridging finance, but we're here to make it easy.
For those that don't quite fit in the 'bank's box' Squirrel have designed our own bridging loan.
We’ve been around the block a few times, so there’s not much we haven’t seen. Tell us your situation and we'll make recommendations to suit.
We deal with more lenders than other brokers, giving you more options.
This means our advice is impartial, and you know you won’t get pushed into a loan you don’t want or can’t afford.
We’ve got negotiating power and access to better rates, so we can make sure the long-term mortgage ends up on a hot rate.
Taking on a bridging loan is an added cost on top of the existing mortgage you’re paying, so banks will look closely to make sure you can afford both loans at the same time.
Bridging loans are set on the floating rate that’s advertised at the time which is higher than the lower fixed rates, but they can be on interest-only terms so that you don’t have to pay the principal during the bridging period. Once the existing property sells and the mortgage is repaid, the leftover balance is fixed.
The main banks tend to be the cheapest option for bridging so your mortgage adviser will approach your bank first. If they aren't prepared to bridge (which is often the case), we have our own bridging loan to consider.
If you're wanting to buy before selling, you'll be looking at getting an open-ended bridging loan. Buyers looking to borrow open bridging loans are seen as a greater risk to lenders, because they’re generally unable to provide a definitive date of when their property will be sold by, (therefore when they'll be able to repay the entire loan).
This means that the process of securing an open bridging loan can be more extensive and often require more equity in your property.
Closed bridging finance is for home sellers that have already finalised their sale terms and lenders prefer this scenario as it has less risk. That's because there's a predetermined date that the house will be sold, which also means a date that the loan will be fully repaid.
For those that don't fit in the 'bank's box' (which can often be the case when it comes to bridging), we have our own bridging loan product. Read about it here.
If you’re planning on selling your place and buying another, here are a few questions to ask yourself to make sure bridging finance makes sense for you. If you’re unsure, we’re happy to help – just give us a call on 0800 21 22 30.
Chances are, you’ll be much more comfortable taking on bridging finance if you already have an unconditional offer on your current property. This means that you will know how much money you can borrow and when you can repay the loan, reducing your personal risk.
We hope that it doesn’t happen, but there’s always a chance that your home might sell for less than you’d hoped. It’s worth thinking about so you can have a strategy in place to make sure you aren’t suddenly burdened with more debt than you can afford.
When you take out bridging finance, you want to be able to commit to a predetermined bridging period. If your home takes longer to sell than you expected, you might not be able to meet the terms of your loan. We can help you put together a backup plan, just in case.
When taking on a bridging loan you need to factor in paying your existing mortgage, plus the potential repayments on the bridging loan, without being reduced to two-minute noodles every day for a month. We can help you work this out.
Auckland, [New Zealand]
JB was super helpful, proactive and prompt. He quickly understood what I needed from this loan, researched the market and gave me a clear range of choices. After we discussed how to proceed, he made it happen super quick. Well done.J
Auckland, [New Zealand]
It was easy from start to finish. I felt well informed and my needs were exceeded. A very simple and satisfying process.G
Christchurch, New Zealand
I dealt with Faye Foster as my mortgage broker to help purchase my first home. She was really supportive, encouraging, friendly and approachable and had great communication. I would recommend Faye to anyone seeking a broker, she helped me own my first home.J
Napier, New Zealand
Lindsay was absolutely awesome. We had a couple of hurdles on the way which Lindsay solved admirably. i have no hesitation in recommending Squirrel to all. Thank youD
, New Zealand
We needed a solution to a complex property purchase and refinance. Squirrel and in particular Lindsay Hill was out standing in getting everything sorted even with very demanding timelines.B
Auckland, [New Zealand]
Working with Lindsay was great. He was very professional and easy to work with. We felt that he would go the extra mile to help us out.G
Takanini, [New Zealand]
Had a great experience with squirrel Sam was very helpful and made sure we where updated and knew what was happening every step of the way. Would highly recommend!Z
Kumeu, New Zealand
I would like say Peimin was very helpful and patient with me as i had a lot of questions to ask especially with being the first time i used squirrel.L
Not only do we have access to more banks than other brokers, but we have a community of over 1,000 peer-to-peer lenders for a custom solution if you don't quite fit the bank's box.