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Bridging Finance

What is bridging finance? It is temporary/short term finance required to ‘bridge’ a gap when a property has been purchased but is to settle prior to a sale of an existing property.
There are two forms of bridging finance. One is open and the other closed.
In a closed bridge a Bank will often entertain a bridging request, even if the debt cannot be serviced, providing there is a firm repayment source i.e. unconditional sale of a property. If buying but not sold try and get a long settlement on the purchase. Even in an auction situation you may be able to get a longer settlement if this is negotiated prior.
In an open bridge the Bank will likely want to test whether there is capacity to service. In this case it can be a bit harder to get across the line with a main Bank. Often we would pose one property as a rental and aim to prove servicing work that way.
If open bridging is not available through a ‘main’ bank then financing through a non-bank “asset based” lender is possible as long as sufficient equity levels are there (it pays to work off roughly a maximum of 70% LVR across the board to allow a bit of room in case some interest costs need to be included in the financing).
With how hot the Auckland market has been a key concern we have noticed when dealing with clients, is them not wanting to sell their current property until they have a new property locked down. If you or anyone else you know fits into this category feel free to give us a call and we can walk you through what options there are for you.

If you would like to discuss this further feel free to email me at and we can advise if there is a better set up for you.