Glossary
End debt
Also called: residual debt, ongoing debt
End debt is the amount still owed after a bridging loan's exit event, usually once the existing property has sold and the net proceeds have been applied to the loan. It becomes the ongoing loan on the new property, which must be affordable on its own terms.
An example
After the old home sells, the agent's commission and marketing costs are paid and the remaining proceeds go to the bridging lender. Whatever balance is left over is the end debt, which the borrower then repays as a standard home loan.
Why it matters
A lender looks at end debt to decide whether the borrower can service the loan once the bridge is over. If the sale price is lower than expected, or the sale takes longer and more interest accrues, the end debt rises. Testing a lower sale price is a sensible step.
Points to check
Ask the lender to show the end debt in writing using its own assumptions about sale price, selling costs and capitalised interest. Test what happens if the sale price is lower or the sale takes longer, because both increase the end debt. Check that the end debt is affordable as an ongoing loan, including its interest rate and repayment type, and whether the lender assesses it under its normal lending policy.
Try it: Bridging finance calculator