Firstmac Now Gives Bridging Clients 12 Months to Sell and Assesses End Debt. The 1% Fee Is Charged on the Peak

Bridging finance has always been a timing product. Firstmac has just given the timing more room.

In a release dated 20 October, Firstmac said its redesigned bridging loan gives customers 12 months to sell their existing property, expands postcode eligibility, lowers fees and offers more flexibility in how borrowing capacity is assessed. Its broker product sheet carries an effective date of 15 October 2026.

The headline will be the 12 months. The broker work is in the arithmetic underneath it.

What Firstmac changed

From the release, the product sheet and the target market determination:

• Bridging period: up to 12 months to sell the existing property.
• Repayments: none during the bridging period; monthly interest is capitalised to the loan.
• Rate: fixed during the bridging period, reverting to variable afterwards.
• Servicing: can be assessed on end debt rather than peak debt, where applicable.
• Limits: maximum LVR 80%; loan amount $50,000 to $3 million; term 15 to 30 years.
• Fees: no application, documentation, settlement, monthly or annual fee; a bridging setup fee of 1% of the peak debt loan value; discharge fees that are waived if the loan goes to full term.
• Eligibility: owner-occupied purchases only, now including Category 2 postcodes.

Firstmac also said it has improved broker compensation and added cash-out options. Australian Broker reported the lender manages $23 billion in residential mortgages.

Why the timing matters now

Upgraders are carrying two properties for longer when homes take longer to sell. TBT reported earlier this month that the median capital-city home is taking 39 days to sell, up from 23, and asked whether a six-month bridging term on your panel is long enough.

Ms Mortimer, quoted in Firstmac’s release, put it simply: “When properties take longer to sell, that timing gap can become even more difficult for homeowners to manage.” A 12-month window means fewer clients forced into a fire sale to meet a deadline.

The rate backdrop matters too. The RBA lifted the cash rate to 4.60% on 29 September, its fourth increase this year, as Australian Broker noted in its coverage. Every month of capitalised interest is charged at today’s rates.

End debt versus peak debt

Peak debt is the total owed while both properties are held: the new purchase, the existing loan, and the interest that capitalises each month. End debt is what is left once the existing home sells and the proceeds pay down the loan.

Assessing serviceability on end debt is what Firstmac says “potentially makes bridging finance accessible to more borrowers”. That is fair. A household that can service its end loan comfortably but could never service both loans at once now has a path.

The phrase “where applicable” matters. It is not a blanket rule. Confirm with Firstmac which files qualify before you tell a client their capacity is based on the end loan.

The cost of the extra time

Two numbers decide whether a 12-month bridge is good value for a client.

The first is capitalised interest. With no repayments, interest is added to the balance each month. The longer the sale takes, the larger the balance, and the more interest accrues on the interest. Over twelve months on a large peak debt, that is a material sum that comes out of the sale proceeds.

The second is the setup fee. The product sheet lists it as 1% of the peak debt loan value. Peak debt is, by definition, the biggest number in the deal. On a bridge where the peak is several times the end loan, that fee is calculated on the peak, not on what the client ends up owing.

Neither of these makes the product a bad choice. Against a rushed sale at a lower price, or a sunset clause that forces a decision, they may be the right trade. They do need to be in the comparison the client sees.

The target market and the file note

Firstmac’s TMD states that the product is unlikely to meet the needs of consumers who do not intend to sell an existing property within the 12-month bridging period, or who need longer than 12 months. That gives you a clear file-note line: the client’s sale plan, the expected timing, and what happens if the sale is slower.

Under the best interests duty, a bridge is compared with the client’s alternatives: selling first and renting, a deposit bond, a shorter bridge elsewhere, or waiting. RG 273 asks you to record the recommendations you presented, including alternatives the client did not select. The longer the bridge, the more those alternatives are worth writing down.

A modelling sequence for the next bridging file

1. Anchor the sale price. Use a current appraisal and a conservative figure, not the vendor’s hope.
2. Build the peak. New purchase plus existing loan plus costs.
3. Capitalise interest for the full window. Model 6, 9 and 12 months so the client sees the difference.
4. Calculate the setup fee on the peak. 1% per the product sheet.
5. Work out the end debt. Peak plus interest plus fee, less net sale proceeds.
6. Check servicing on the end debt with Firstmac’s calculator, and confirm the file qualifies for end-debt assessment.
7. Stress the sale. Lower price, later sale. Does the end debt still fit inside 80% LVR?

What to watch

If other lenders follow Firstmac on longer windows and end-debt servicing, bridging becomes a mainstream tool for upgraders in a slower market rather than a niche one. Watch for changes at the lenders on your own panel, and for how assessors treat sale-price evidence when the window is a year long.