How long you can hold a bridging loan
How many months can a bridging loan run, and what happens if my sale takes longer?
Bridging finance is built for months, not years. The usual planning horizon is somewhere between 60 and 180 days, which sounds generous until you price it: on a $720,000 facility at 8.74%, every additional thirty days costs about $5,175 in interest alone, before a single fee. There is no version of this where holding a bridge "just a bit longer" is free.
Why the time limit exists at all
The lender is lending against a property that is expected to sell. The security is only worth what it realises, and the whole structure depends on the sale happening. So a bridging facility is written with a term, a review point, or both. When the end of that term arrives and the sale has not settled, one of three things happens, and all three cost you:
- Extension or roll-over — the facility is renewed. This is normally a new approval at a new price, not an administrative continuation of the old one. The rate and the fees are negotiated again, from scratch, at whatever the market looks like that week.
- Repayment from another source — you find the money, refinance into a longer facility, or sell something else. This is where a "temporary" bridge becomes a permanent problem.
- Default — the terms were not met. Interest continues to accrue, the security can be acted upon, and the consequences stop being financial.
Work out your realistic window, not your hopeful one
The number that matters is not how long you think the sale will take. It is how long the sale takes when something goes wrong, because something always does at least once. Build the timeline from the settlement date of your existing home, add the marketing period you actually need, add the buyer's settlement, and then add a buffer you would be embarrassed to explain to a lender. Australian consumer guidance on short-term finance is blunt about this: these products are priced on time, and the risk sits with the borrower.
If the honest answer is that your window could exceed six months, that is not a bridging problem to solve with a longer bridge. It is a sequencing problem, and no rate will fix it.
What a delay actually costs you
Delay has three parts, and people usually only count the first. The interest continues to accrue. The facility comes up for review or renewal, and the renewal is priced at then-current conditions rather than the conditions you signed at. And your buffer disappears — the cash you were holding back for stamp duty, rates and repairs on the new property is now competing with a growing interest bill.
Price your own delay before it happens. Put the number of days you might realistically need into the calculator, then put the number you hoped for into it as well. The gap between those two answers is the cost of your uncertainty — and it is usually the most useful number on the page.
The short version
- Treat sixty to one hundred and twenty days as a normal bridging window.
- Above one hundred and eighty days you are holding a property through two market cycles on a facility priced for months.
- A roll-over is a new approval, not an extension of grace.
- If your window is genuinely open-ended, sell first. That is a real answer, not a failure.