What’s the difference between a Closed and Open Bridging Loan?

A closed bridging loan is when a mortgage applicant knows the date that they must buy the new home and the date that their old home will settle. You will have to purchase your new home first but know exactly the date that you need the bridge for.

An open bridging loan is when you must purchase your new home but have no definite offer on your old home.  The bank must, in this case, assume that you aren’t going to be able to sell it so needs to calculate as though you keep it as a rental property.  Open bridging loans are very difficult to fund if you don’t have enough income to pay the entire mortgage.

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