Bridging Loan - The bridging loan has progressed a long way over the years. It was perceived as a very scary and expensive option, but over the years it has received a lot of enhancements and a better interest rate. A bridging loan is a short term loan taken out to cover the difference between buying or constructing a new property and selling the existing property. In some cases this means moving once. If you have enough equity in your current property this is ideal for most people. The interest on the loan can be paid by you or capitalised, meaning added to the loan. In this case you only continue to pay the existing mortgage until the end of the term or settlement whichever occurs first. The pitfall of this loan is that if you don't sell your existing home in the period allowed, usually 6 - 12 months, the interest bill can become expensive. It may force you to sell the existing home at a reduced price. This loan relies entirely on you having sufficient equity to support the purchase. The benefit is you can buy or build your new home before you sell your existing home. Therefore you move straight in to your new home. One move!