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Bridging loans (aka relocation loans)

Bridging loans (aka relocation loans)

  March 16, 2021

Bridging loans (aka relocation loans)
So what exactly is a relocation loan?

It’s exactly what the name implies. A loan that helps you purchase a new home whilst you wait for a buyer to purchase your current home. Giving you the cash you need to buy, before you’ve had the chance to sell – which can be super helpful. But how much can you borrow?

The size of the loan that you receive is based on the following calculation:

Value of your new home + outstanding mortgage balance – expected sale of your current home.

= value of your bridging loan

(otherwise known as ‘ongoing balance’ or ‘end debt’)

And what happens to your existing loan and your repayments?

The structure of a bridging loan does vary by lender and generally lasts around 6 months, so your repayments will depend on who you take the loan out with. Let’s take a look at how the loan might be structured:

  • Sometimes you’ll only need to make repayments on your existing home loan. Over the period the interest of the bridging loan will get added to the overall loan value of your bridging loan, but you won’t need to make any repayments on this until your property is sold.
  • Alternatively, some structures require you to start repaying the bridging loan straight away – so you’ll be paying back your original home loan and the bridging loan. However, you should only need to repay interest on the bridging loan.

There are a number of considerations that you need to bear in mind if you’re exploring the prospect of a bridging loan. This is where MC Mortgage Solutions can help you ensure that you choose the right option that’s best for your situation.


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MC Mortgage Solutions would love the opportunity to discuss your circumstances with you. Whether you have found a house or are just in the planning stages it's never to early or late to make sure your finance is right for you.

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MC Mortgages was established with one clear goal: to be more than just brokers. With this compelling vision in mind, we have created a brokerage that is focused on looking beyond the customer’s initial request and taking a holistic approach to all their needs.

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