Bridge Financing When Changing Homes: Why Your Primary Bank Calls the Shots

What Bridge Financing Does

Bridge financing, also known in banking jargon as a bridge loan or interim credit, covers the time gap between the purchase and sale of a property. The buyer receives liquid funds before the actual sales proceeds in order to cover the down payment, notary fees, and transfer tax for the new property. Once the existing property is sold, the proceeds flow directly into repayment.

In practice, many changes of home do not fail because of money but because of timing: The desired property is on the market before the old property is sold. According to MoneyPark, around 50 percent of people who already own a property forgo purchasing their desired new property because the timing doesn’t work. For this target group, bridge financing is often the only realistic option to secure the desired property without having to rely on perfect choreography between sale and certification.

Usually a Matter for Your Primary Bank

Those looking for bridge financing shouldn’t have any illusions about the provider market: bridge loans are a relationship business, not a comparison product. As a rule, they are only granted by your primary bank, i.e., the institution that holds the existing mortgage, already has the property as collateral, and knows the customer’s overall financial situation.

The reason lies in the risk profile: the bank temporarily finances two properties simultaneously and relies on the sales proceeds from the old property coming in as expected and on time. A bank extends this trust to long-standing customers, but virtually never to new ones. Some banks fundamentally do not grant bridge financing; customers of such institutions must plan their change of home especially early or seek alternative providers.

This also means: involving a mortgage broker is of no use in the case of bridge financing itself. Where there is no market with competing offers, there is nothing to compare and nothing to negotiate that the primary bank wouldn’t already discuss directly with the customer. It’s different with the subsequent long-term financing of the new property: here, comparing providers is absolutely worthwhile, as the fixed-rate mortgage after the bridge phase does not necessarily have to be with the same bank.

Amount, Duration and Typical Conditions

Swiss banks typically finance up to 90 percent of the market value of a property to be sold in a bridge loan. The key factor is an internal bank valuation, not a speculative asking price set by the seller. The term is always limited: as a rule, the lender requires that the old property be sold within six to twelve months. If this deadline is not met, one must apply for an extension, which may result in higher interest rates or additional collateral requirements.

The bridge is subject to variable interest, usually with a margin on top of a SARON-based reference rate. If you are planning a later amortization strategy, repayment can be structured flexibly:

• Open-ended mortgages can be repaid at any time, in part or in full.
• Fixed-rate mortgages with a contractually agreed extraordinary amortization allow repayment without early repayment penalty.
• SARON mortgages can be reduced after each interest period.
• Existing fixed-rate mortgages can be transferred to the new property under certain conditions.

For orientation: currently (as of September 2026), SARON mortgages start at around 0.75 percent, five-year fixed-rate mortgages at about 1.30 percent, and ten-year at around 1.54 percent. Your personal terms depend on loan-to-value, affordability, loan amount, and property location.

Affordability: The Rule May Temporarily Be Broken

The same basic rules as for a classic mortgage generally apply when granting bridge financing. The bank checks the loan-to-value of both properties in relation to their respective market values, their marketability, the location and condition of the property to be sold, as well as any existing sales agreements, reservation contracts, or signed declarations of intent.

There is, however, a key difference from the standard mortgage check regarding affordability. If you calculate using an imputed rate of around 4.5 to 5 percent on the total loan for both properties, the double burden almost inevitably exceeds the usual one-third rule. Banks know this and will, in certain cases, accept that affordability temporarily exceeds the norm during the bridge phase, for example up to 50 percent of income.

The requirement is that processes are cleanly coordinated: the sale of the old property must be clearly underway, ideally with a notarized preliminary contract, a signed reservation agreement or at least a mandated broker and a realistic schedule. The more binding the documentation of the sale, the more likely the bank is to tolerate the temporary breach. What’s crucial is that after the transaction—when the bridge has been repaid—affordability for the remaining property returns to normal boundaries.

Cost Factors Beyond the Interest Rate

Interest is just one part of the equation. Additional incidental costs may arise when changing homes, and these can vary greatly by canton:

• Notary fees for purchase and sale deeds
• Land registry fees for transfer of ownership
• Transfer tax, which depending on canton can range from zero up to around three percent of the purchase price
• Creation or adjustment of a certificate of debt
• Capital gains tax on the sales profit of the old property
• Brokerage commissions typically two to three percent

Above all, the real estate capital gains tax is often underestimated. It can be quite high for short holding periods of the old property and reduce the net proceeds with which the bridge financing is to be repaid.

When the Bridge Actually Pays Off

Bridge financing is not automatically expensive, but it does increase financial risk in an already delicate phase. It makes sense especially when:

• there is a specific dream property on the market that is unlikely to appear a second time;
• the old property is likely to sell quickly due to location, condition, or demand situation;
• the buyer side can shoulder the double burden of interest, incidental costs and ongoing fixed costs (taxes, insurance, running costs for both properties) during the bridge period.

On the other hand, a wait-and-see strategy may be cheaper if the new property is available multiple times in similar form or if the market for the old property is tight in that region. A realistic buffer for negotiating the price of the old property belongs in the planning, as does the question of how well the buyer side can financially handle a possible extension of the deadline.

If Your Primary Bank Says No: Alternative Lenders and Other Paths

Not every home change goes through the primary bank, and not every primary bank participates. If it rejects or doesn’t offer the product at all, alternative paths are possible:

Alternative lenders. Platforms such as lend.ch (Switzerlend AG) specialize in financing that falls outside the classic banking grid, explicitly including bridge financing for changing homes. Both the existing and the new property can serve as collateral, and the affordability check is done situationally, not schematically. The price for this is generally higher interest rates than at the primary bank; however, for a limited bridge phase, it may still pay off if the alternative is missing out on the desired property.

Coordinating dates. If you link the sales contract with a suspensive condition (purchase of the new property) and set the notarizations close in time, you can avoid the bridge entirely. This requires a cooperative buyer of the old property.

Sell first, rent temporarily. Reduces the risk of double financing but incurs moving costs and temporary rental expenses during the interim period.

Equity or sale of securities. Available liquidity from securities portfolios can replace a formal bridge if you are willing to accept the market risk of a forced sale.

Recommendations for Preparation

If you are planning a change of home, you should approach your primary bank as early as possible, ideally before there is a concrete property on the table. This helps clarify whether the institution offers bridge financing at all, under what conditions, and with how much temporary flexibility in affordability.

It also makes sense to get the repayment terms in writing: which portion is to be repaid from the sales proceeds, which transferred into a long-term fixed-rate mortgage, and on what terms? At the latest for this subsequent fixed-rate mortgage, it’s worth looking beyond your primary bank, as there is real competition among providers here.

If you also calculate the imputed affordability for both properties simultaneously and get the sale of the old property underway professionally at an early stage, you minimize the risk of having to make concessions on the sale price due to deadline pressure. This is exactly where the greatest financial disadvantage of a poorly planned bridge lies.

Bridge financing is thus a valuable but not risk-free instrument. It works best when purchase, sale, and repayment are not left to chance but planned together with your primary bank or an alternative lender as a complete financing package.

Sources

• MoneyPark: Thanks to bridge financing, off to your new home
• Raiffeisen Switzerland: Sell your house and buy a new one. How to manage the financial balancing act
• LEND / Switzerlend AG: Bridge financing when changing homes
• Beobachter: Bad advice is expensive. When the bank does not offer bridge financing