Bridging Loan Calculator: Peak Debt, Interest and End Debt

How is a bridging loan calculated?

A bridging loan is calculated in four steps: add up the debt at the start, grow it by the interest for the term to reach the peak debt, test the peak debt against the value of both properties, then take the net sale proceeds off to find the end debt.

The debt at the start is the new property price less the cash you put in, plus what you still owe on the property you are selling, plus any establishment fee added to the loan. With capitalised interest the balance grows every month until the sale, so the peak arrives at the end of the term. How lenders define peak and end debt is set out in the bridging finance guide.

Interest depends on how it is charged. Capitalised interest compounds monthly: each month's interest joins the balance and is charged interest the next month. Prepaid interest is simple interest on the whole facility, taken out of the advance at settlement, so the facility has to be larger than the amount you need. Interest-only interest is paid each month from your own cash and never joins the balance.

The loan to value ratio at peak is the peak debt divided by the new property price plus the expected sale price, and the calculator flags anything above 80 per cent. End debt is the peak debt less the sale price after sale costs: the loan left on the new property once the sale settles, which then has to be repaid or refinanced as an ordinary loan.

Capitalised peak debt = starting debt × (1 + r)ⁿ; prepaid facility = starting debt ÷ (1 − r × n); end debt = peak debt − sale price × (1 − sale costs), where r is the monthly rate and n the number of months.

Monthly compounding is the arithmetic that sits under the standard loan formula in the Reserve Bank of Australia's Research Discussion Paper 2021-10, Appendix A, here with no repayments made until the sale. Our capitalised interest worked example takes the same maths down to the daily cost and the LVR drift month by month. The calculator assumes:

• A per-year rate is divided by 12 to give the monthly rate; a per-month rate is used as entered.
• Capitalised interest compounds monthly; a lender that compounds daily charges slightly more.
• Prepaid interest is simple interest on the full facility for the whole term, with no refund assumed if the property sells early.
• Interest-only interest is paid monthly in arrears and does not add to the debt.
• The establishment fee is a percentage of the starting debt, added to the loan; legal, valuation and other fees, stamp duty and purchase costs are not included unless you add them to the price.
• Sale costs are a percentage of the sale price; the lower-sale cases cut the sale price by 5 or 10 per cent.

Which rate should you enter?

Enter the rate you have been quoted; the 8.75 per cent a year non-bank example rate is a planning figure as at 27 September 2026, not an offer. It sits inside the non-bank band our rates guide recorded from lender pages read on 15 September 2026, 6.31 to 9.24 per cent a year with most between 8.29 and 8.99, and the private comparison lane uses the 8.07 per cent prepaid starting rate one private funder published, read on the same date (its capitalised rate started at 8.22 per cent). Rates move with the security, the LVR at peak, the term and the strength of the exit, as the bridging loan rates and fees guide shows lane by lane. Short private facilities are commonly quoted per month, so switch the rate to per month or put a second mortgage quote into the comparison line.

What does a $500,000, $750,000 or $1,000,000 bridge cost over 6 or 12 months?

About $44,555 in interest on $1,000,000 over 6 months at the 8.75 per cent non-bank example rate with interest capitalised monthly, or about $42,047 prepaid at the 8.07 per cent private example. The table shows the interest on each amount in both lanes over 6 and 12 months, before fees.

Sources: example rates from Switchboard's bridging loan rates and fees guide (switchboardfinance.com.au, updated 14 September 2026, read 27 September 2026), which recorded a non-bank band of 6.31 to 9.24 per cent a year, most between 8.29 and 8.99, and one private funder publishing from 8.07 per cent prepaid, both read at source on 15 September 2026. The 8.75 per cent non-bank figure is an indicative example rate as at 27 September 2026, not a quote. Capitalised interest compounds monthly; prepaid interest is simple interest on the whole facility, which is sized so the amount in the first column reaches you. Fees are excluded; interest in dollars, rounded to the dollar.

Interest is only part of the bill. Establishment, risk, valuation and legal fees come on top, and in the rates guide's $900,000 worked example the fees reversed the ranking the headline rates suggested. The second mortgage lane is left out of the table because no dated monthly example is published; enter your own quote in the calculator's comparison line. To price a non-bank or private bridge on your own figures, start with private lending.

What happens to the end debt if the property sells for less?

The shortfall stays owing: the end debt rises by the drop in the sale price less the sale costs you no longer pay on it, so at the default figures a sale 10 per cent lower, $900,000 instead of $1,000,000, lifts the end debt from $591,833 to $689,333.

That larger end debt stays on the new property as an ordinary loan, so the real question is whether you can repay or refinance it, not whether the bridge closes. Use the 5 and 10 per cent chips to see both cases before you list, and read what happens when a bridge sells early or for less for the payout order and the checks before you accept a lower offer.

If you want to borrow against the property you are selling before it sells, the guide to a bridging loan until your property sells covers the sale evidence a lender asks for and why it lends against a valuation rather than your listing price.

Is this a regulated loan or a business-purpose loan?

It depends on what the money is for: a bridge used mainly for personal, domestic or household purposes, or to buy residential investment property, is regulated consumer credit under the National Credit Code, while one used mainly for a business purpose sits outside it. The calculator's arithmetic is the same either way, but the protections, the paperwork and the lenders who can write the loan are not, and the bridging guide explains how the purpose test works.

A signed business purpose declaration does not settle it on its own. In April 2025 the Federal Court found a business lender and its loan introducer had engaged in unlicensed credit activity after relying on a declaration without making reasonable inquiries (ASIC 25-060MR), and in December 2025 the two were ordered to pay combined penalties of $515,000 (ASIC 25-301MR). How a business bridge is structured and documented is covered in the business bridging loan guide.