What is bridging finance and when do I need it?

Bridging loans solve the timing mismatch when you're upgrading: you've found the new home but your existing home hasn't sold yet. The lender funds the new purchase using both properties as security, with the expectation that the existing home will sell and the proceeds clear the bridging portion within a defined window (typically 6 months, sometimes extendable to 12).

Two structures: 'closed' bridging, existing home is already under contract with a settlement date; rate ~1% above standard variable. 'Open' bridging, existing home not yet sold; rate ~2-3% above standard variable + lender comfort thresholds.

Risks: if the existing home doesn't sell within the bridging window, the lender can require you to refinance the entire combined balance at a higher rate, force-sell at any price, or in worst case foreclose. Most lenders are flexible if you're clearly trying to sell, but distressed-sale outcomes happen if the market moves against you.

Alternatives: rent the existing home short-term while you wait to sell, take a deposit-bond against the new home, sell first then rent until you find the next. Each has trade-offs around stress, holding-costs, and sequencing risk.