Bridging loans serve as a bridge between buying your new home and selling your current one. To calculate your commitment, add the remaining mortgage on your existing home to the value of the new property, and then subtract the sale price of your current home. The resulting amount represents the principal of your bridging loan. The lender manages the mortgage on your current home and the finances related to the new property.
Bridging loan repayments are typically based on an interest-only model, and in some cases, this interest may accumulate until your existing home is sold. When you sell your first property, the proceeds from the sale reduce the Peak Debt (total borrowed amount). The remaining loan balance becomes the End Debt, which you repay as a regular mortgage going forward
