Bridging finance for property.What the lender really checks.

The situation bridging finance is built for

Bridging finance solves a timing problem, not a money problem. The capital exists, it is simply tied up in the wrong property. The classic case in the Rhine-Main region: a family moves within the area, finds the right property and has to commit before the current house has a buyer.

Waiting until the sale is complete means losing the new property. Buying without cover means carrying two financings at once. Bridging finance is the third route. It provides the amount that will later flow back from the sale proceeds, making the equity tied up in the existing property available early.

The time pressure is real and varies by location. Selling a house in Frankfurt took three to six months on average in 2025 according to von Poll Immobilien. That is a reference point for the city, not a figure for the wider region. In smaller locations and for properties that need explaining, marketing can take considerably longer.

How the process runs

A bridging loan in Germany generally follows the same sequence, regardless of which institution provides it.

1. The lender reviews your documents, the new property and the existing property as security.
2. The loan is approved and secured by a land charge, registered on the existing property, the new one or both.
3. Funds are drawn on the date the purchase price for the new property falls due.
4. During the term you pay interest only. There is no ongoing capital repayment.
5. Once the sale proceeds arrive, you repay the loan in a single sum.

The long-term mortgage for the new property runs alongside. Both parts should be calculated together from the outset. Looking for bridging finance only after the main mortgage is in place unnecessarily narrows the range of lenders available.

What the lender checks on your existing property

In a bridging arrangement your existing property is not only your future money, it is the lender's security. It is examined accordingly. Which documents are required in an individual case is set by each institution. The security logic, however, points to issues that generally matter.

The land register position. What still encumbers the existing property is decisive. If the previous loan has been redeemed, the path is clear. If your existing bank still holds a land charge, the question is whether there is room for further security ranking behind it. This point decides feasibility more often than credit profile does.

A realistic value. What counts is not the asking price in the listing but the value the lender applies. How this mortgage lending value is determined, and why it sits below market value, is covered in our guide to property valuation by the bank.

Evidence of the sale. The better the expected proceeds are evidenced, the simpler the decision. A notarised purchase agreement for the existing property is the strongest form of evidence. Where none exists yet, the question becomes how realistic the marketing is in current market conditions.

This list is deliberately not a definitive checklist. It describes what the assessment is driving at, not which forms a particular institution requires.

Why lenders have to calculate the double burden

Many buyers assume that a valuable existing property is sufficient security. The house is worth more than the amount being bridged, so the case should be straightforward. In practice this assumption leads to rejections that look arbitrary from the outside. They are not. The reason is set out in German law.

Section 505b of the German Civil Code applies to consumer real estate loans. Subsection 2 is unambiguous: a creditworthiness assessment must not rely mainly on the value of the residential property exceeding the loan amount. The provision implements the European Mortgage Credit Directive. You can read the official German text at Gesetze im Internet.

For bridging finance this means the lender may not simply rely on your existing house covering the loan if things go wrong. It has to assess whether you can actually carry the burden during the period in which both financings run side by side. What feels like a formality is in fact a statutory duty that no institution can set aside.

How that assessment turns out differs from lender to lender. The range runs from a conservative view to a calculation that gives more weight to the foreseeable sale. That is precisely why it is worth comparing several institutions rather than treating a rejection from your existing bank as final. ME Finance draws on a panel of more than 500 banks and lending institutions.

If the existing property does not sell

This is the concern behind almost every bridging enquiry, and it can be addressed factually. The mechanics come first. Bridging finance is normally capped at 24 months. If marketing runs longer, an extension through a prolongation is generally possible. The contractual terms may change and further costs may arise. It does not happen automatically, it is a fresh decision by the lender.

The second route runs through the price. Adjusting the asking price shortens the marketing period but reduces the proceeds. Less remains after redemption, which in turn weighs on the long-term financing of the new property. The two figures are connected and should be considered together from the start.

The third route is conversion into a permanent solution, generally within the follow-up financing. Whether that is possible depends on whether you can carry the double burden permanently, which brings us back to the assessment described above.

The practical point is this: owners who recognise early that the sale is taking longer keep all three routes open. Those who react shortly before the deadline usually keep only one.

What bridging finance costs

The interest rate on bridging finance is higher than on a long-term mortgage. This is not a surcharge applied case by case, it follows from the structure of the loan. Three factors combine.

The short term. A bank can plan funds returning after a few months less well than a financing running over fifteen years. Short-term provision is more expensive to refinance.

The absence of repayment. Because only interest is paid during the term, the outstanding amount stays at its full level until the end. The risk does not decline over time, unlike an annuity loan.

The open repayment date. Repayment depends on an event that has not yet occurred. When the sale succeeds, and at what price, is not fixed when the contract is signed.

Costs for registering a land charge may be added where a new entry is required. We deliberately do not quote interest rates here. They depend on the individual case, the institution and the timing, and are set solely by the lender. What can be said is that the additional cost applies only to the bridging period, not across the entire financing term. Measured against losing the property you want, it is often the smaller figure.

Bridging finance, variable loan or waiting

Bridging finance is not the only way across the gap. Which route fits depends above all on how certain the sale is and how fixed the date is.

A fourth route is often mentioned and rarely works in practice: extending the payment deadline in the purchase agreement for the new property. Whether the seller agrees is entirely their decision. In a tight market with several interested parties, the willingness to do so is low.

Do not confuse bridging finance with interim building society financing. Both are short-term and interest-only, but the trigger differs: the latter bridges the period until a German building society contract becomes allocable, not the period until a property is sold.

What to clarify before committing

• Check the land register position of the existing property, particularly land charges held by your current bank.
• Work with realistically achievable proceeds, not the asking price.
• Calculate bridging finance and the long-term mortgage in one combined plan.
• Establish whether you could carry the double burden if marketing takes longer than planned.
• Note the term limit in your calendar and start the conversation well before it expires.
• Compare several institutions rather than treating the first rejection as the outcome.

ME Finance brokers property loans under Section 34i GewO and does not provide legal or tax advice. We check which lenders can structure your case and calculate both financing components together. We advise in English, in Hanau and across the Rhine-Main region.

Sources

• Section 505b German Civil Code: creditworthiness assessment for consumer real estate loans
• Section 505a German Civil Code: duty to assess creditworthiness
• von Poll Immobilien: how long selling a house in Frankfurt takes