NZ Bridging Finance Calculator
Calculate the cost of bridging finance for buying a new home before your current one sells. Compare open vs closed bridging, see your peak debt and monthly interest cost, calculate your end mortgage, and assess forced sale risk. All figures in NZD.
The difference between open and closed bridging finance is fundamental. A closed bridge has an unconditional sale agreement — there is certainty about when your current home proceeds arrive. An open bridge has no sale agreement and carries significantly more risk and cost.
| Factor | Closed Bridge | Open Bridge |
|---|---|---|
| Rate above standard | +0.5-1% | +1.5-3% |
| Maximum term | 3-6 months | 6-12 months |
| Bank approval ease | Standard credit assessment | Stricter — higher equity required |
| Sale certainty | Unconditional — certain | None — market dependent |
| Forced sale risk? | Low | High if market slows |
| Cost on 4-month bridge | NZ$22,500 | NZ$27,000 |
Open bridging finance creates forced sale pressure. If your current home does not sell within the bridge term, you may need to accept a lower price — increasing your end mortgage significantly. This risk must be priced into your decision before you commit.
How to Use This Calculator
Enter your current home value, current mortgage balance, new home purchase price, bridging type (open or closed), bridging term (months), and interest rate. The calculator shows your bridging loan amount, monthly interest cost, total bridging cost, and end mortgage after your current home sells.
What Is Bridging Finance?
Bridging finance is a short-term loan that allows you to buy a new property before your existing one sells. The bank uses both properties as security simultaneously, creating a peak debt period. Once your current home sells, the proceeds clear the old mortgage and reduce the bridging loan — leaving you with an end mortgage on the new property only. You pay interest only during the bridge period.
Open vs Closed Bridging Finance
A closed bridge means you have an unconditional sale agreement on your current home — you know exactly when and for how much it will sell. Closed bridges attract lower rates (typically 0.5-1% above standard) and have a maximum term of 6 months. An open bridge has no sale agreement in place. Rates are 1.5-3% above standard, maximum term is 12 months, and the financial risk is significantly higher.
Bridging Finance Calculation Formula
(bank uses both properties as security)
Monthly Bridge Interest = Bridging Loan × Bridging Rate / 12
Total Bridging Cost = Monthly Interest × Bridge Term (months)
Peak Debt = New Home Price + Current Mortgage
(both loans running simultaneously during bridge)
End Mortgage = New Home Price - Equity from Current Home
Equity = Current Home Value - Current Mortgage
Example: $900K new home, $750K current home, $320K current mortgage
Current Equity: $750K - $320K = $430K
Peak Debt: $900K + $320K = $1,220K
End Mortgage: $900K - $430K = $470K
Bridge cost (4 months, 8%): ~$24,000
Example: Upsizing in Auckland
The Taylors — Buying a $900K Home Before Selling Their $750K Home
| Current Home Value | $750,000 |
| Current Mortgage | $320,000 |
| Current Home Equity | $430,000 |
| New Home Price | $900,000 |
| Bridging Type | Closed (unconditional sale signed) |
| Bridge Rate | 7.5% (standard 7% + 0.5% bridge premium) |
| Bridge Term | 4 months |
| Monthly Bridge Interest | $5,625 |
| Total Bridging Cost | $22,500 |
| End Mortgage (after sale) | $470,000 |
The Taylors use a closed bridge because they signed an unconditional sale on their Auckland home before purchasing the new property. The $22,500 bridge cost is the "convenience premium" for not having to sell first, rent, and buy second. Their end mortgage of $470,000 is their ongoing mortgage on the new $900,000 home.