Bridging loan
Buy your new property before selling the old one.
The bridging loan (or bridge loan) temporarily advances the funds from your current, not-yet-sold property, to finance the purchase of the next one without waiting.
The bridging loan is a transition solution: the lender advances you a sum corresponding to the (net) value of your current property, until you sell it. You thus finance your new purchase immediately, without having to wait for the sale. During the bridge period (generally 12 to 24 months), you often only repay the interest, the capital being paid off as soon as the sale is collected.
It is a valuable tool in a market where properties sell quickly, but it assumes a realistic sale of your property. We assess with you the amount of the bridge, the term and the cost, then organise the switch to your definitive mortgage loan.
Warning: borrowing money also costs money.
Your questions, our answers
What is a bridging loan and when do you need one?
A bridging loan finances the purchase of your new property while you wait for the sale of the old one: it advances the sale proceeds so you do not miss the opportunity. You only pay interest during the bridging period; the capital is settled when the sale completes.
What is the maximum duration of a bridging loan?
Most Belgian lenders grant 12 to 36 months, with 24 months the most common. If the property is not sold at maturity, solutions exist (extension, conversion into a classic loan), but it is better to set a realistic duration from the start with your broker.
How much does a bridging loan cost?
You only pay interest on the amount advanced, at a rate slightly above a classic mortgage, plus file fees. Most formulas have no early-repayment penalty at the sale. The real cost therefore mostly depends on how fast your property sells.
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