Private lending › Calculators › Bridging loan calculator
Bridging loan calculator
Work out peak debt, capitalised interest and the end debt you will be left refinancing once the outgoing property sells.
Interest is capitalised and compounds monthly on the drawn balance. Set the term against a realistic sale campaign, not the best case.
The two numbers
Peak debt and end debt
Almost every bridging conversation turns on these two figures, and borrowers routinely quote the wrong one when they call.
Peak debt is the lender's maximum exposure: the mortgage still owing on the property you are selling, plus the full cost of the one you are buying. It exists for the window in which you own both. It is the number the credit assessor measures against the combined value of the two properties, and it is what sets the LVR the facility is priced at.
End debt is what is left once the outgoing property settles and the net proceeds clear down the facility. It is the number that actually determines whether the deal works, because end debt is what has to be refinanced onto a longer-term facility, or repaid outright. A bridge with comfortable peak debt but an end debt no bank will take out is not a solved problem, only a deferred one.
The gap between them is the sale price, less selling costs. Which is why the sale price you put into the calculator above should be a figure an agent will put in writing, not the one you hope for.
Worked example
Where the interest actually lands
Take the default figures above. You owe $450,000 on a home expected to sell for $1.4m, and you are buying for $1.65m with $90,000 of stamp duty and legals.
The facility drawn at settlement is $2,190,000 — the existing mortgage plus the purchase plus costs. At 7.99% p.a. capitalised over six months, interest adds $88,960, so peak debt reaches $2,278,960. Against a combined property value of $3,050,000 that is 74.7%, comfortably inside the 80% ceiling.
When the outgoing property sells, $1.4m comes off, leaving an end debt of $878,960 on a property worth $1.65m — about 53% LVR, which a bank will refinance without difficulty. That is a deal that works.
Now move the term from six months to twelve and leave everything else alone. Capitalised interest rises to roughly $181,533, peak debt to $2,371,533, and end debt to $971,533. The deal still works, but the bridge has cost an extra $92,573 — which is the argument for setting a term honestly and paying interest monthly where you can afford to.
What a calculator cannot do
The part that decides the deal
This tool gives you the arithmetic. It does not tell you which lender will fund it, and that is where bridging deals are actually won or lost.
Two funders looking at identical numbers will treat them differently. One will accept a sale price with no contract behind it if the suburb is liquid; another wants a signed contract or a 90-day campaign history before it will price at all. One capitalises interest for the full term without blinking; another caps capitalisation at six months and requires the balance serviced after that. Appetite for the incoming security matters as much as the ratios — a bridge into a standard suburban purchase prices differently to one into a vacant commercial asset, at the same LVR.
None of that is published. It is learned by placing deals, which is the job. If the numbers above stack up, the next question is which of the funders on our panel is writing this shape of deal this month.
FAQ
Frequently asked questions
How is peak debt on a bridging loan calculated?
Peak debt is the mortgage still owing on the outgoing property, plus the purchase price of the new property, plus stamp duty, legals and other costs. It is the total the lender is exposed to during the period you own both properties.
If interest is capitalised rather than paid monthly, the interest accruing over the term is added on top, so peak debt at the end of the bridge is higher than the facility drawn at settlement.
What is end debt?
End debt is what remains after the outgoing property sells and the net proceeds are applied to the facility — peak debt, including any capitalised interest, less the sale proceeds. It is the figure that matters most, because it is what has to be refinanced to a longer-term facility or repaid outright once the bridge ends.
Is interest paid monthly or capitalised?
Both are available and the choice is usually the borrower's. Capitalising means no repayments during the bridge, with interest added to the balance and cleared at settlement, which suits borrowers already carrying two sets of outgoings. Paying monthly keeps peak debt lower and can produce a slightly better rate.
Capitalised interest compounds, so over a longer bridge the difference is material — as the worked example above shows.
What LVR will a lender accept on a bridge?
Peak debt is generally assessed against the combined value of both properties, and our panel goes to 80% on standard residential security. Lenders will usually go to that limit where the outgoing property sits in a liquid market and there is evidence of a sale campaign. Specialised, regional or partly tenanted security typically sits lower.
How long can a bridging loan run?
Private bridging facilities usually run three to twelve months, with terms up to 24 months where the exit justifies it. Set the term against a realistic sale timeline rather than an optimistic one — extending a facility mid-term costs more than taking the longer term at the outset.
What if the outgoing property does not sell in time?
The facility is either extended, refinanced, or the property is sold at a price that clears the debt. Extensions are normally available but carry a further fee and a higher rate.
This is why a lender tests the exit before funding, and why a bridge should be structured with enough headroom that a sale slightly below expectation does not leave an end debt nobody will refinance.
This calculator is a guide, not an offer. Actual lending depends on a valuation, the security type and location, the strength of your exit and each lender's own policy. Interest is modelled as capitalising monthly on the full drawn balance; some facilities calculate daily or cap capitalisation. Nothing here takes your objectives, financial situation or needs into account.
Enquire
Put real numbers in front of a lender.
Indicative terms the same day. No credit check to get a quote.
Get indicative termsOr call 0478 715 429.