What a bridging loan actually costs
I have to buy before I sell. What does bridging finance cost me, and what belongs in the number?
A bridging loan does not have one cost. It has a cost that moves every single day you hold it, plus fees that land once. People ask "what will the bridging cost me", get an answer in interest only, and are surprised by the total. The total is the only number worth planning around, and it comes out of four parts.
Part 1: how much you are actually bridging
The bridge covers a gap, not the whole purchase. It is purchase price minus the deposit and any long-term loan already approved. Every dollar of equity you already hold comes straight off the balance that accrues interest, so the cheapest bridging is the one you did not need. If you can raise more deposit or get more of the existing home's equity released before you buy, the facility shrinks.
Part 2: the rate, applied per day
Bridging rates sit above standard home loan rates, because the facility is short and the security is a property that still has to sell. But the way the rate is applied matters as much as the number itself. Australian short-term bridging is commonly calculated on actual days / 365: a ninety-day hold costs a quarter of a year's rate, not a third of a month-based figure. Some contracts use 30/365 instead, which produces a higher number on the same facts. Get the day-count convention in writing.
The rate itself is not something this site will quote. It depends on the security, the LVR the lender will accept on a property that has not sold yet, your own position, and the market on the day. The only market figure referenced anywhere on this site is the cash rate target: as at 30 September 2026 the Reserve Bank of Australia had it at 4.60%, following an increase of 25 basis points to 4.60% decided on 29 September 2026 (RBA media release 2026-27, read on 3 October 2026). Lenders price off that target; your rate is not that number.
Part 3: the holding period, which is the real cost driver
This is the part that makes bridging different from every other loan you will take out. With a standard home loan, being a week late costs a week of repayments. With a bridge, being a week late costs a week of interest on a large balance and puts you closer to the point where the facility needs to be re-approved, extended or rolled. The cost curve is not forgiving: interest accrues daily, and a sale that slips from 90 days to 150 days adds roughly two months of interest rather than shaving the difference off.
Part 4: the fees, and whether they carry interest
Establishment or arrangement fees are usually charged when the facility is set up. Valuation, legal and inspection costs are separate, and they arrive whether or not the bridge goes ahead. The number worth asking about is whether those fees are added to the amount being financed. On many bridging products they are, which means you are paying interest on your own fees for as long as you hold the bridge. That is why the amount you borrow is sometimes higher than the amount you asked for, and why two quotes for the same purchase can show different bridging amounts.
Work it out rather than guess it. The calculator on the home page takes the purchase price, your deposit or equity, the rate from your written quote, the days you expect to hold the bridge and your fees, and shows you the bridging amount, the daily interest, the total interest and the total cost together — with a verdict on whether the arithmetic works.
What the total is likely to look like
Put a rough order of magnitude on it before you get attached to a property. On a $900,000 purchase with a $180,000 deposit, the bridge is $720,000 plus whatever fees get rolled in. At a 8.74% rate that is roughly $172 a day of interest on the principal alone. Ninety days is about $15,500 in interest; one hundred and fifty days is closer to $25,900, before a single fee. Those are illustrations, not quotes — the arithmetic is in the calculator, and the number that matters is the one your own quote produces.
Moneysmart's guidance on short-term finance is worth reading alongside this: bridging is a product for a specific timing problem, and it is expensive precisely because it is short. ASIC's consumer materials on short-term loans and finance set out the same shape — the cost is driven by how long and how much, and both need to be checked against a written quote rather than a headline rate.