Bridging loan in Belgium: buy before you sell

The bridging loan: how does it work?

A bridging loan is a short-term loan. It advances part of the expected sale price of your current property to finance your new purchase. You then repay it as soon as the sale is completed.

In practice, it is often combined with a standard mortgage for the rest of the financing. During the bridging loan, you generally pay mainly interest. Afterwards, the proceeds of the sale repay the capital.

When should you choose a bridging loan?

• You have found the ideal property and you do not want to wait for your current home to sell.
• Your sale is in progress : the sales agreement is signed, but the deed has not yet been executed.
• You want to move only once, without temporary housing between the sale and the purchase.

First, a sales agreement already signed for your current property greatly reduces the risk. Without an agreement, on the other hand, the bank relies on a cautious valuation. To secure your own purchase as well, read the mistakes to avoid in the sales agreement.

The risks of a bridging loan to anticipate

A bridging loan is useful, but it requires caution. The main risk is a sale that is slower or at a lower price than expected.

• Double burden : for a few months, you may pay your current loan and the loan for the new property.
• Sale price : an over-optimistic valuation can leave a balance to repay.
• Timing : if the sale is delayed, the term of the bridging loan may become too short.

That is why we check with you that your budget holds, even if the sale takes longer. A realistic valuation of your property remains the basis of the whole arrangement.

Bridging loan: the Belgian rules to know

In Belgium, the sale and purchase of a property follow a precise timetable. This timetable also sets the useful term of your bridging loan.

• Sales agreement then deed : the authentic deed is normally signed within four months of the sales agreement, the period allowed for paying the registration duties. This is often when the sale repays the bridging loan.
• Regional advantages : the allowance in Brussels and the reduced rates in Wallonia and Flanders normally apply to your only home. If you buy before selling, your notary therefore checks the conditions and resale deadlines specific to your region.
• Costs of the new purchase : registration duties and notary fees remain at your expense, as do the loan costs.

Why use a broker for a bridging loan

Not all banks offer bridging loans on the same terms. We therefore compare 7 banks, build the complete file, bridging loan and mortgage, then negotiate the conditions.

You thus keep a single point of contact for the whole file. First of all, estimate your budget with our loan simulator and your costs with our notary fees simulator. Finally, for the rules of the deed, your notary remains your reference.

How your application works

A single point of contact to analyse, build and defend your file.

Frequently asked questions about bridging loans

Page written by Hypoprime, mortgage broker in Brussels. A bridging loan depends on your profile, the value of your property and the banks' policy; purchase costs still need to be planned for. A complete analysis is essential. Warning: borrowing money also costs money.