Key takeaways
- •When your bank will not be ready by the settlement date in your purchase contract, the date does not move. Paying the balance of the price on that date is your obligation as the buyer, whoever is lending you the money.
- •Under the standard New South Wales contract, the settlement date is fixed but not essential, so the vendor must first serve a notice to complete before it can end the contract over a missed date.
- •In Victoria, under the standard contract of sale, time is of the essence and interest is charged on the unpaid balance, but the vendor must serve a default notice giving you 14 days before ending the contract.
- •In Queensland, the Real Estate Institute of Queensland residential contracts let either party extend settlement by up to 5 business days, unless a special condition removes this. After that, the party that cannot settle is in default.
- •A private bridging loan from Secured Lending, from $250,000 and backed by property, can settle your purchase on the contract date, and the bank loan you are waiting on repays it when the approval issues.
- •Secured Lending decides on a bridging loan in hours and can settle within 24 hours, so the purchase can still settle on the contract date when that date is only days away.
If your settlement date is days away and the bank will not be ready, the purchase can still settle on the contract date. That is a stressful position to be in, and there is a practical answer: a short-term bridging loan provides the balance the bank was going to provide, and the bank loan repays the bridging loan once the approval issues.
We would be glad to help you settle on time. A private bridging loan backed by property is a good fit for this problem because it can be in place quickly. We lend our own funds, our in-house team values the property, and we can settle within 24 hours. Settling on the date keeps your deposit and the purchase in place, and there is no late-settlement interest to pay the vendor. Below is what a missed date costs under the standard contracts in New South Wales, Victoria and Queensland, how the bridging loan works, and how quickly it can be arranged.
A late bank does not move the buyer's settlement date
The contract is between you and the vendor, not between the vendor and your bank. Paying the balance on the settlement date is your obligation, whoever was lending you the money. The standard New South Wales contract puts this in its list of warnings to buyers: "A purchaser should be satisfied that finance will be available at the time of completing the purchase."
What a missed date costs depends on where the property is and on your contract. Under the standard contracts:
| New South Wales | Victoria | Queensland | |
|---|---|---|---|
| Standard contract | Law Society of New South Wales and Real Estate Institute of New South Wales, 2026 edition (these terms are unchanged from the 2022 edition) | Law Institute of Victoria and Real Estate Institute of Victoria Contract of Sale of Land | Real Estate Institute of Queensland residential contracts |
| Is the settlement date strict? | No. The date is fixed, but it is not essential | Yes, time is of the essence. But interest is charged on the unpaid balance, and the vendor must serve a default notice before ending the contract | Either party can extend by up to 5 business days by notice. After that, the party that cannot settle is in default |
| Interest for late settlement | None in the printed conditions. Check your special conditions | The penalty interest rate, 10% p.a. since 1 February 2017. Older editions of the contract add 2 percentage points | No penalty interest during a valid clause 6.2 extension |
| Before the vendor can end the contract | A notice to complete | A default notice giving you 14 days to fix the default | The party that cannot settle by 4pm on the fifth business day is in default, and the other party can terminate |
New South Wales. The 2026 contract keeps the rule from the 2022 edition before it: "Normally, the time by which something must be done is fixed but not essential." The vendor cannot end the contract the day after a missed date. It must first serve a notice to complete, and if that notice is not met, clause 9 lets it terminate, keep the deposit up to 10% of the price and claim damages.
Victoria. Under the Law Institute of Victoria and Real Estate Institute of Victoria contract, time is of the essence, but the vendor still cannot end the contract straight away. Interest on the unpaid balance is charged at the penalty interest rate, which the Supreme Court of Victoria lists at 10% since 1 February 2017. At 10% p.a., the interest on an unpaid balance of $1,500,000 is about $411 a day, or $2,877 for a week. The September 2025 edition of the contract removed the further 2 percentage points that earlier editions add to the penalty interest rate, so a contract signed on an earlier edition may charge 12% p.a. Before the vendor can end the contract, it must serve a default notice that gives you 14 days to fix the default and pay the vendor's reasonable costs and the interest (general conditions 34 and 35 of the January 2024 edition).
Queensland. Under the Real Estate Institute of Queensland residential contracts, clause 6.2 lets either party extend the settlement date by written notice given before 4pm on the settlement date, to a date no more than 5 business days after it. The vendor does not have to agree, and no penalty interest is charged during a valid extension. The Institute's guide to the contract changes expects the extension to be used most often when a party's financier is not ready. The same guide sets out what happens if settlement still does not occur by 4pm on the fifth business day: "the party that cannot settle on that day will be in default (whether that is the buyer or the seller) and the other party can terminate." A special condition can remove clause 6.2 from a contract.
Special conditions can change any of this. Your solicitor or conveyancer can tell you what your own contract says and which dates apply to you.
How a bridging loan settles on the contract date
A bridging loan takes the place of the bank loan on the settlement date. It is made to the buyer, and at settlement the loan funds are used to pay the balance of the purchase price to the vendor. When the bank approval issues, the bank loan settles and the buyer uses it to repay the bridging loan.
| Loan size | From $250,000, with larger loans assessed case by case |
| Interest rate | From 9.7% p.a. on bridging and first mortgage loans, from 11.95% p.a. where a second mortgage is part of the loan |
| Term | 1 to 24 months, typically 3 to 6 months |
| Security | A first mortgage over the commercial, industrial or residential investment property you are buying, and where needed a first or second mortgage over another property you own |
| Maximum loan-to-value ratio | 70%. Where there is a second mortgage, the first and second mortgages combined |
| Repayment | The bank approval you are already waiting on, or a refinance or a sale if the bank takes longer |
Our bridging loans page sets out how the product works in more detail.
Case study: A $1.88 million bridging loan settled within 48 hours
One of our long-term broker referrers brought us a client who needed fast bridging finance to settle the purchase of a property in Gymea Bay. There were only three days left until settlement, and delays at a mainstream lender put the settlement at risk.
We approved and settled a $1.88 million bridging loan within 48 hours, backed by a first mortgage over the Gymea Bay property and two residential units in Broadmeadows, Victoria.
The client needed a short two-month term while awaiting final bank approval, so the loan was set on a two-month term.
How fast it can be in place
We lend our own funds, so there is no third-party funder to wait on. We decide in hours, issue a letter of offer as soon as terms are agreed, and can settle within 24 hours. Our in-house valuation team values the property, so there is no wait for a panel valuer.
Work back from the settlement date. Incomplete documents slow a private loan down, as our guide to what affects how long a private mortgage takes to settle explains, so the contract and the bank's letter are the first two things to gather. If your solicitor is asking the vendor for more time, we can assess the loan at the same time, so you have an approved way to settle on the date whatever the vendor answers.
If the bank valuation came in below the price
A short bank valuation means the approved bank loan no longer covers the balance. The purchase can still settle. Our valuer values the property you are buying directly, and our loan is sized against that value.
Where a gap remains, another property you or a co-director own can help back the loan. If that property already has a loan on it, our loan sits behind it as a second mortgage, and the 70% maximum loan-to-value ratio applies to the first and second mortgages combined. Adding cash at settlement is the other way to close the gap.
How the bank approval repays the loan, and if it takes longer
The bank approval you are waiting on is how the bridging loan is repaid. When the bank's open item is cleared, whether that is a signed lease, a valuation or a set of financials, the bank loan settles and you repay us from it.
If the bank takes longer than expected, or declines after we have settled, the term runs up to 24 months. That leaves time to refinance with another bank or a non-bank lender, or to sell. If the bank has already withdrawn its approval before your settlement date, our page on how a buyer can settle after bank finance falls through covers that case.
Working with your solicitor and broker
Your solicitor or conveyancer manages the settlement date, any request to the vendor for more time and any notice that is served, so put us in touch with them early. Your broker keeps working on the bank approval, which then repays our loan, so the bank deal the broker arranged still goes ahead.
Whether to ask the vendor for an extension, how to answer a notice, and whether to go ahead with the purchase are questions for your solicitor. We are a lender, and we do not give legal advice.
Frequently asked questions
Can the vendor keep my deposit if I settle a few days late?
The vendor cannot keep it straight away under the standard contracts. In New South Wales the vendor must first serve a notice to complete, and in Victoria a default notice. In Queensland either party can extend by up to 5 business days under clause 6.2, and the party that cannot settle after that is in default. Your special conditions can change this, so ask your solicitor or conveyancer.
Can a private lender settle on my date instead of the bank?
Yes. We decide in hours, issue a letter of offer as soon as terms are agreed and can settle within 24 hours. The bank loan then repays ours when the approval issues.
What if the bank takes longer than expected, or says no after you have settled?
The loan term runs from 1 to 24 months, so there is time to refinance with another bank or a non-bank lender, or to sell the property. Tell us how you expect to repay the loan when you first call.
What property can back the loan?
Our loans are backed by residential, commercial or industrial property. That is usually the property you are buying, with a first mortgage over it, and it can also include another property you own, with a first mortgage, or a second mortgage behind any existing loan on it. The maximum loan-to-value ratio is 70%, across both mortgages where there are two.
What interest rate applies?
Our bridging and first mortgage loans start from 9.7% p.a. Where a second mortgage is part of the loan, rates start from 11.95% p.a. Ask for the full offer in writing, with every cost, before you decide.
How Secured Lending Can Help
We would be glad to help you settle on the contract date when the bank will not be ready in time. Our bridging loan provides the balance due at settlement, and the bank deal your broker arranged stays in place as the way the loan is repaid.
A private loan suits this problem because it is quick and because it is secured against property. We lend our own funds and our in-house team values the property. We decide in hours, issue a letter of offer as soon as terms are agreed, and can settle within 24 hours.
We provide secured loans backed by real property. If you would like us to look at your situation, it helps to have these to hand:
- •The contract of sale and the settlement date.
- •The bank's approval, its open conditions or its valuation, since the bank loan is how our loan is repaid.
- •The address of the property, and access details for our valuer.
- •The balance due at settlement and the deposit already paid.
- •Any notice the vendor's solicitor has served.
With a settlement date days away, a phone call is usually the quickest start. You are welcome to call us on 1300 795 175 with the contract and the bank's letter in front of you, or send the details through and we will come back to you. In most cases, we can tell you within hours whether we can help.
