Lenders will generally lend based on the valuation or the purchase price/guidance price, whichever is lower. Often they will lend about 70 - 80%. Be aware, however, that properties don't always sell at the guide price at an auction – it could be more, or less. Always decide in advance the maximum price you can afford to bid on a property.

A bridging loan is short term finance usually taken out from 1 to 12 months. It is an interest only facility that helps with buying a property and completing the purchase almost immediately. This type of loan can sometimes be repaid by refinancing it on a long term basis or selling the property.

As an example, bridging loans may be more suitable if the property is to be sold soon after purchase, or refinanced with a long term loan. Long-term finance may be more appropriate if the property is to be held on to for a number of years.