Bridging Finance Without Monthly Payments: How It Works

You might be thinking about a bridging loan because life has presented you with a money challenge, or an opportunity.  That house you always dreamed of just hit the market and you want to make an attractive offer. 

You might be planning a family and need to renovate, have expensive school fees to pay, or it could be time to give your older children a leg-up on the property ladder. Or perhaps you are waiting on an inheritance, but need access to funds now. Whatever your reason is, a bridging loan can help you move forward. However, they are not all created equal. 

Let’s explore the ins and outs of this type of financing option.

What is bridging finance and when might you need it?

A bridging loan is a short-term financing option that gives you access to funds, typically while you are waiting for a liquidity event to occur that grows your wealth. This could be the sale of your property, the settlement of a family member’s estate, or the finalisation of a business transaction. 

You can use bridging finance to navigate key decisions during different phases of life when you know a cash injection is on the way. That said, there are some factors that can hold you back when seeking this type of loan.

As a borrower, your eligibility for bridging finance from a traditional lender is usually determined by your income. And because loans are commonly shorter in length (generally payable within six to twelve-months), lenders can lump extra interest on monthly repayments to ensure the risk they take on is profitable. 

These factors can make your experience with bridging loans stressful, especially when unforeseen changes to expected windfall events occur – like your property sale falling through, or a delay to a cash injection you were anticipating.

It may put you under unnecessary financial pressure that disrupts your lifestyle, or forces you to dip into your retirement savings and other investments. A Midkey loan is different and can help you avoid common headaches affecting Australians when their bridging loan strategy does not go to plan.

Why Midkey’s no monthly payments model is changing the game

A Midkey no monthly payments loan offers a short to medium-term lending option that is secured against the equity you have grown in your home, not your cash flow or other assets.

This innovative approach makes it a first-of-its-kind lending product in Australia.

It is designed for responsible, asset-rich but cash-poor homeowners who need access to funds for their next financial move. Below is how a Midkey loan is different to other bridging finance choices:

• No monthly payments frees up your cash flow and immediately reduces financial pressure
• It can be used strategically as a second mortgage alongside your existing home loan
• It can also be used as a first mortgage because you own your home outright, or you use the Midkey partly to pay the remains of your mortgage and have cash to use
• More people are eligible because lending decisions focus more on your assets than your income
• You choose to repay the loan at a time that fits within your financial plan, like after a property sale, a windfall event or when you are ready to refinance
• There are no age restrictions, assuming you are over 18

In general terms, Midkey gives you more freedom to stay in control of your financial timeline. And the peace of mind this creates is priceless.

Real people, real results: Cheryl’s story

Midkey borrower and mother of three, Cheryl, is a great proof-point of how Midkey loans provide mid-life Australians with helpful bridging finance. 

She used her home equity to secure a Midkey loan during a difficult period of financial uncertainty as a newly single mum looking to build equity with a renovation.

Selling her house was simply not an option, as Cheryl, aged 54, loved her lifestyle on Sydney’s eastern beaches and she did not want to disrupt the lives of her children by moving house and suburbs.

Thanks to Midkey, she stayed in her home, renovated and paid the school fees. 

You can learn more about Cheryl’s story here.

Use your home equity to unlock more options in life

We understand that your financial circumstances are truly unique, but bridging finance can support almost anyone when structured correctly. 

A Midkey loan works with your financial goals, not against them. You might be wondering – how exactly does it work? We assess your property and existing equity to determine how much you can borrow, which can be up to 30 per cent of your home’s value if you have an existing mortgage, and 35 per cent for a first mortgage.

You receive funds to use however you need them. This might be to:

• Fund renovations that improve lifestyle or boost your home’s future value
• Help your children buy their first home
• Fund education, such as private school fees
• Start or fund a business, or bridge the gap during a career change
• Supplement the loss of income during maternity or paternity leave
• Take that trip of a lifetime you have been thinking about for years

You make no monthly payments over the life of your Midkey loan and you determine when you will pay back the funds. Simple interest accrues over the loan term and a Deferral Fee is paid at the end of the loan, which is a percentage of your home’s increase in value over the loan’s life. 

If your property’s value does not increase, no Deferral Fee is charged which helps reduce your financial risk.

You can learn more about how a Midkey loan works and see if you qualify here.

Want to know how much equity you could access? Use our Loan Calculator to get started, or set up a free consultation with one of our experienced, Australian-based Loan Specialists today.

Whether you are planning ahead, or responding to one of life’s unexpected turns, Midkey can help you unlock your home equity or reduce your debt payments and create opportunities – all on your own terms.