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Bridging Finance Newcastle

Get a short-term loan and take the financial stress off your shoulders as you prepare to purchase or build a new home. Learn more about our convenient bridging finances in Newcastle.

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Your number on choice for a bridging loan in Newcastle

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Bridging loans vs deposit bonds

In the finance world, a lot of jargon is thrown around, which can be confusing for aspiring homeowners. For example, “bridging loans” and “deposit bonds” are often interchangeable, leaving some homeowners lost in translation. 

The truth is that bridging loans and deposit bonds achieve the same thing but in different ways. The Australian Securities and Investments Commission defines deposit bonds as a financial agreement that can be used “in place of a deposit when a buyer exchange contracts on a property”.

This guarantees the seller that the buyer will pay the full cash deposit on an agreed date. The deposit bond amount takes the place of cash when buying a new home, usually covering up to 10% of the purchase price. 

A bridging loan is a short-term loan that is used to cover the costs of buying a new property while waiting on the sale of an existing property. These are generally interest only, and the value is calculated according to the equity in the current property. These loans are generally limited to 6 months.

Watson Mortgages: Your number one choice for bridging finance in Newcastle

At Watson Mortgages, we’re committed to finding you a great bridging loan to make homeownership in Newcastle more achievable. 

Bridging loans are one of the ways to “bridge the gap” between your current home and your dream home. We partner with more than 20 lenders to provide local homeowners (or aspiring homeowners) with short-term loans. We can also connect you with local financial planners, lawyers and bankers to make the process feel more secure. 

Your personal mortgage broker will make the loan application process feel simple and stress-free. Our team will do all the legwork for you, from finding and comparing bridging loans and interest rates to monitoring market conditions, organising paperwork and applying for preapproval.

Throughout the process, you will be the one to call the shots and make the final decisions while we provide recommendations and advice to guide you towards the most suitable bridging loan. Plus, we will always ensure you understand the process and provide regular updates so you can see how your loan application progresses.

For more information about bridging finance in Newcastle, contact Watson Mortgages today.

Elliot Watson Financial Planning
Watson Mortgages
"Watson Mortgages helped us easily buy our new home and sell our old home with a bridging loan."

Contact Watson Mortgages for an obligation-free consultation

Why should I choose Watson Mortgages?

Between Watson Mortgages, Elliot Watson Financial Planning and Watson Wealth, we have many years of experience helping Newcastle residents achieve their homeownership goals. 

As an award-winning team with extensive financial and legal experience, we will find a suitable loan that matches your budget and lifestyle.

Here are a few benefits of choosing Watson Mortgages for bridging finance in Newcastle:

  1. We have more than 20 lenders to choose from, meaning we’ll find a bridging finance loan to suit your needs.
  2. We’ll manage the application process from start to finish. We’ll help find the right bridging loan, communicate with lenders on your behalf, submit documents and secure a loan, and then provide ongoing services and support to simplify the repayment process.
  3. Our services are complimentary and convenient. Our brokers can meet at your location, or we can have a more formal meeting in our office.
  4. We’ll find a competitive interest rate on your bridging loan, so there could be less stress when it comes to your monthly interest-only payments.
  5. We have the experience and knowledge to provide mortgage and debt consolidation advice, so you will feel supported and on top of things from day one.

Contact our mortgage brokers in Newcastle for an obligation-free consultation today.

Bridging Loans
"Completing the paperwork and getting the funds for our new home was made simple by the staff at Watson Mortgages.”

Frequently asked questions

How much do bridging loans/deposit bonds cost?

Different issuers charge different fees for deposit bonds. The total amount depends on the value of the property you’re looking to purchase, the value of the deposit bond being taken out, and if you have been pre-approved for bridging finance in Newcastle. According to Canstar, who completed a review of several deposit bond companies, a buyer can expect to pay between 1.2% and 1.5% of the total purchase price.

We recommend comparing different deposit bond issuers with us before committing to a particular deposit bond.

How long does it take to get a deposit bond approved?

Getting a deposit bond is quite a quick and streamlined process. According to Deposit Bond Australia, applicants can receive their bond between four and 48 hours, depending on the complexity of the application.

What are the risks associated with bridging loans and deposit bonds?

A few hurdles are involved with getting a bridging loan or deposit bond. You may not be issued funds due to:

– Refusal from the vendor. Not all real estate agents and vendors will accept a deposit bond. Be sure to check this under the contract conditions before committing to a sale.

Financial checks. By law, you must pass financial checks by the issuer. Like home loans, deposit bonds are a form of credit covered by the National Consumer Credit Protection Act 2009 (Cth) (NCCP Act).

Fees and charges. Anyone using a deposit bond must pay fees on top of the amount covered by the deposit. Before agreeing to enter a contract, find out how much the deposit bond will be so you can calculate additional costs.

Can you pay off a bridging loan early?

A bridging loan is a short-term loan, meaning it’s quite flexible and, in most cases, does not charge exit fees if you repay early. A bridging loan charges interest for as long as it has not been paid, so the sooner you pay off your bridging loan, the more you’ll save on interest costs.

What are open and closed bridging loans?

Two types of bridging loans are available: closed bridging loans and open bridging loans.

Closed bridging loans are used if you already have a contract of sale on your existing property and know when your home will be sold and when the funds will be received. You’ll repay the loan (and any accrued interest or fees) on this date.

An open bridging loan is used if your current property hasn’t yet sold. This can be arranged for up to 12 months.

When is the best time to sell to minimise the bridging loan period?

You never know when you’ll find your dream home, and the timing doesn’t always align with real estate market conditions. Here are a few quick property market tips to remember when it comes time to sell:

  • Seasonality — Spring is the most popular time to sell in Australia, but there are benefits to selling in quieter periods like winter. With fewer properties on the market, you will have more buyers inspecting and competing for your current property (this is what’s called a seller’s market when the demand for homes is higher).
  • Patience — If you’re selling in the buyer’s market (i.e. the number of houses for sale is greater than the number of buyers), you will need to be patient and realistic about the value of your home.
  • Research — Keep up to date with what’s happening on the property market, e.g. interest rate movements, weekly property sales, and the economy as a whole. This will tell you when it’s time to make a move and sell your existing home or property.

What if a bridging loan isn’t right for me?

Bridging loans have pros and cons (e.g., having two mortgages at once), which we will explain during our initial consultation. However, if you’ve successfully sold your existing home and need to find a new property, here are a few things you can do to ease the transition.

  • Negotiate a longer settlement period on the sale of your home so you have time to house-hunt and move.
  • Rent your home from a new buyer so you have more time to find a new property.
  • Stay with family and store your belongings, or rent furnished accommodation until you’re ready to move into your new home.

Our team will also provide a wide range of loan options to ensure you’re comfortable with loan payments, interest, and the timeline for your big move.

What is the maximum loan term available?

The maximum loan term for bridging loans typically varies depending on the lender and the specific personal circumstances of the borrower. The common loan term for a bridging loan is usually between 1 to 18 months. Some lenders may offer terms of up to 24 months.

What other services do you offer?

At Watson Mortgages, we have close contacts with local financial planners, banks, lawyers and many more essential services, meaning we can get you the best deal and instantly set you up for success.

As well as Watson Mortgages, we also offer services via: 

No matter where you are in the home-building journey, our group can help you achieve your goals cost-effectively.

For deposit loans and bridging finance in Newcastle, contact the team from Watson Mortgages today. Our services are complimentary, convenient and flexible, so you can access finances sooner.

Bridging Loans
"We were worried we would miss out on our dream home, but a bridging loan with the help of Watson Mortgages got us there.”

Contact Watson Mortgages for an obligation-free consultation

For deposit loans and bridging finance in Newcastle, contact the team from Watson Mortgages today. Our services are complimentary, convenient and flexible so you can access finances sooner.

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