How to read these numbers
Equity is what you'd have left from the sale after paying off your current loan and selling costs.
Peak debt is what you'd owe while you own both homes: your current loan, plus the new purchase and its costs, less the savings you put in. With bridging finance, the lender looks at this number.
The loan after the sale is the peak debt less your net sale proceeds. Many lenders add the interest during the bridging period to the loan instead of asking you to pay it monthly, so it's shown separately.
If the loan after the sale is more than 80% of the new home's value, lenders mortgage insurance may apply, and if your sale price comes in lower than expected, the loan will be higher. That's why a cautious sale price is the safer number to plan with.
Questions to answer before you make an offer
- How long will a lender give you to sell, and will interest be added to the loan or paid monthly?
- What's a realistic sale price and time on market for your home, based on recent sales nearby?
- Could a longer settlement on the purchase give you time to sell without bridging finance?
- Would the seller accept an offer subject to the sale of your home?
- What would happen if your sale took longer or sold for less than you planned?
- Can you comfortably cover the repayments if the lender asks for them during the bridging period?
