In short: A bridging loan lets you buy your next home before your current one sells. This calculator adds your existing loan, the new purchase price and costs to find your peak debt, capitalises the interest for the bridging period, then subtracts your expected net sale proceeds to show the end debt you will repay long term. It also checks the peak debt against typical lender LVR limits.
- Peak debt$1,355,000
- Peak LVR across both properties77.4%
- Interest capitalised over 6 months$48,122
- Net sale proceeds$778,000
- End-debt repayment (30 yrs at 6%)$3,748 / month
Most lenders cap the bridging period at 6–12 months and assess you on the end debt. If your home sells for less, end debt rises dollar for dollar.
End debt after your sale: $625,122
That is a general estimate on standard assumptions. Every lender applies its own expense benchmarks, income shading and policy, so the real figure moves from lender to lender. Gorakh spent years as a senior credit officer deciding exactly these questions. Send him the numbers above and he will tell you what is realistic and which lenders fit — at no cost to you for home loans.
- A former senior credit officer reads itGorakh assessed loan applications on the lender side before he became a broker.
- A real office you can visit23 Astbury Crescent, Mickleham VIC 3064 · ABN 90 160 461 553
- Fees and complaints in writingRead the Credit Guide and our complaints and AFCA process before you commit to anything.
- English, Nepali and HindiInterpreters in other languages on request.
Prefer to talk first? Book a free 15-minute call 0426 403 703 Full 2-minute pre-assessment
Every month the old home stays unsold, interest is added to the balance you eventually keep. The tool makes that cost visible before you commit.
How this calculator works
Enter your current home's expected sale price and loan balance, the new purchase price and costs, the bridging rate and the months you expect to bridge. The calculator produces three figures.
Peak debt
Peak debt is the most you owe at any point: the existing loan plus the new purchase price plus costs, before your old home settles. Lenders assess this figure against the combined value of both properties.
Capitalised interest
During the bridging period most lenders do not require repayments on the bridging portion. Interest is added to the loan each month and compounds. The longer the sale takes, the larger the balance grows.
End debt
End debt is what remains once the old home sells and the net proceeds are applied: peak debt plus capitalised interest minus net sale proceeds. This is the loan you must be able to service on a normal principal-and-interest basis, assessed with the APRA 3% buffer.
Worked example in Melbourne
A Greenvale family own a home expected to sell for $850,000 with a $400,000 loan remaining. They buy a larger house in Mickleham for $1,100,000. Duty at the general Victorian rate of 5.5% is $60,500, plus about $3,000 in conveyancing and registration. For illustration the bridging rate is 7.00% p.a. and the sale takes six months.
| Step | Amount |
|---|---|
| Existing loan | $400,000 |
| New purchase price | $1,100,000 |
| Stamp duty and purchase costs | $63,500 |
| Peak debt at purchase | $1,563,500 |
| Capitalised interest, 6 months at 7.00% | about $55,500 |
| Peak debt at sale | about $1,619,000 |
| Net sale proceeds (after commission, marketing, legal) | about $826,500 |
| End debt | about $792,500 |
| Monthly repayment on end debt at 6.00% over 30 years | about $4,750 |
The peak debt of $1,563,500 against combined property values of $1,950,000 is an LVR of about 80%, which is the ceiling for many bridging lenders. If the sale drags to nine months, capitalised interest rises to about $84,000 and end debt to about $821,000. Every extra month costs this family roughly $9,500. Use the selling costs calculator to firm up the net proceeds figure and the stamp duty calculator for the exact duty.
Bridging windows and LVR limits
Most lenders allow six months to sell an established home and up to twelve months when the new property is being built. If you have not sold within the window, the lender can require repayments on the full balance, reprice the loan or ask you to sell. Our guide to the settlement process in Victoria explains how the two settlements are timed.
Common limits at the time of writing:
- Peak debt usually capped at 80% of the combined value of both properties, with some lenders going higher with LMI.
- End debt must pass a full serviceability test, since it becomes a standard home loan.
- Some lenders require the old home to be listed for sale before settlement of the new one, or within a set period afterwards.
- Both properties are valued by the lender, and a conservative valuation on the old home increases your assumed end debt.
Our bridging loans service page explains which lenders on our panel offer the most flexible windows.
When bridging makes sense, and when it doesn't
Bridging works when you have strong equity in the current home, a realistic sale price, and a market where homes sell within a few months. It is expensive when the old home is hard to sell, when equity is thin, or when your income cannot service the end debt comfortably. Alternatives include selling first with a long settlement, negotiating a longer settlement on the purchase, a deposit bond to secure the new home while you sell, or a subject-to-sale condition in the contract. Use the equity calculator to see how much of your current home's value you can actually access.
Frequently asked questions
What is peak debt on a bridging loan?
Peak debt is the total amount you owe while you own both properties: your existing home loan, the full purchase price of the new home, and the stamp duty and costs of buying it, plus any interest capitalised during the bridging period. Lenders compare peak debt with the combined value of both properties to set an LVR, commonly capped around 80%.
Do I make repayments during the bridging period?
Usually not on the bridging portion. Most lenders capitalise the interest, meaning it is added to the loan balance rather than paid monthly, and you keep paying your existing loan as normal. Some lenders require interest-only repayments on the whole peak debt instead. Capitalising is easier on cash flow but increases the end debt.
How long can I bridge for?
Typically six months when selling an established home and up to twelve months when the new home is under construction. At the end of the window the lender can convert the loan to full repayments or ask you to sell. Build in a margin: a six-month plan that runs to nine months adds tens of thousands in interest on a large peak debt.
Is a bridging loan more expensive than a normal home loan?
Often slightly higher in rate, with establishment and valuation fees on top. The bigger expense is capitalised interest on a large peak debt: six months in the example above costs about $55,500. Against that, bridging avoids renting twice, moving twice and missing the home you want.
Can I bridge if I still owe most of my current home's value?
It is difficult. With little equity the peak debt LVR exceeds 80% and the end debt may be too high to service. Selling first, a longer settlement or a subject-to-sale offer is usually the better path. Talk to us before you commit to a purchase.
Talk to GNT Finance
GNT Finance arranges bridging finance for Melbourne families upgrading in the northern suburbs and across Victoria. We model your peak and end debt, check lender LVR limits and secure a bridging window that fits your sale plan, at no cost to you for our home-loan service in most cases. Book a free consultation or call 0426 403 703.
Written by Gorakh Timilsina
Founder, CEO & Senior Mortgage Consultant at GNT Finance. Gorakh started as a broker assistant, spent years as a senior credit officer assessing loan applications, and now helps Melbourne families get the right loan approved. English, Nepali and Hindi spoken.