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Bridging Finance in New Zealand: Is it possible and what else could you do?

Bridging finance can be a lifeline for homeowners looking to buy a new property before their existing one is sold. However, as Greg from My Mortgage explains, securing this type of loan isn't as straightforward as it used to be. In this article, we explore the intricacies of bridging finance and provide insight into making the best financial decision.

Understanding Bridging Finance

Bridging finance allows you to purchase a new property while still holding onto your current one. This financial arrangement temporarily bridges the gap between buying a new home and selling your existing one. But the process is now subject to stricter regulations, and banks require proof that you can afford the lending across both properties, sometimes indefinitely.

Factors to Consider

  1. Dual Lending: If you plan to borrow on your existing property while purchasing another, it's crucial to recognize that the combined debt will be substantial. For instance, owning a $300,000 home and purchasing a $900,000 home will result in $1.2 million worth of lending. Lenders must ensure you can afford this level of debt for an unspecified period.

  2. Alternative Strategies: If bridging finance is unattainable or too costly, consider alternative approaches like renting out your current property as a temporary rental or seeking support from family members to navigate this transition.

  3. Moving Twice vs. Bridging Costs: Many people are hesitant about the hassle of moving twice, but the cost of bridging finance at floating interest rates can often outweigh this inconvenience. Carefully weigh the financial impact of each option.

  4. Short-term Rental: Renting your new property before settling on it can help offset some costs if your existing home sells after you purchase the new one.

When to Use Bridging Finance

While bridging finance is helpful in certain situations, it’s essential to have a clear plan. Moving twice might be inconvenient, but it could be a more economical choice than taking on expensive floating rates. Discuss your situation with a financial advisor to determine the best path forward.


Bridging finance is one option among many, and it may not always be the best fit. Before jumping into a bridging loan, consider alternative strategies that may better align with your financial goals. The team at My Mortgage suggests reaching out for personalized advice if you're trying to manage the transition between selling and buying a property.


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