Buying your next home

Work out the order of the sale and purchase

The timing affects the borrowing, where you'll live between properties and when you'll have access to the sale proceeds. I'll help compare the lending for the options you're considering.

Sell first

Selling first may suit when you need certainty about the sale price before setting your buying limit. Once the loan and selling costs are paid, you know what cash remains. Allow for rent, storage and a second move if the next home isn't ready.

Line up the settlements

Lining up settlements may suit when both contracts and the lending can work to compatible dates. The purchase may depend on the sale settling first that day. Ask your conveyancer what happens if either transaction is delayed, and agree a backup for accommodation and funding before committing.

Buy first

Buying first may suit when the right property is hard to replace and you have enough equity, income and buffer to manage an overlap. Bridging finance is one possible arrangement, subject to lender assessment. Check the maximum sale period, how interest is paid and what happens if the sale is late or below your estimate.

Check when the money will be available

The deposit on the next home may be due before your sale settles. That means the amount you expect to receive from selling and the cash you can use today need separate checks.

I'll work through the expected sale proceeds after the loan payout and selling costs, then the funds needed for the purchase. Allow separately for moving, temporary accommodation and the cash you want left afterwards.

Compare the loan during the move and after it

I'll compare the highest borrowing needed while both transactions are under way with the loan expected to remain after the sale. We can also look at a lower sale price or a longer overlap to see how much those changes would affect the plan.

Before committing to dates or contract conditions, have the lending checked and discuss the contracts with your solicitor or conveyancer. If you proceed, I'll handle the loan application and lender follow-up and work with your conveyancer on the lending arrangements for settlement.

Put the sale and purchase on the same page

Here is an invented example to show the arithmetic, not a quote or a borrowing limit. Assume a $900,000 sale, a $400,000 current loan payout and $25,000 selling costs. That leaves $475,000 after the sale.

If you sell first

A $1,100,000 purchase plus an assumed $60,000 in buying costs needs $1,160,000. Using all $475,000 of net sale proceeds leaves $685,000 to fund. Keeping $30,000 aside instead would increase that amount to $715,000, before any other savings or costs.

If you buy first

If the existing $400,000 debt and the full $1,160,000 purchase outlay are funded during the overlap, the combined peak debt is $1,560,000 before interest and additional fees. Applying the $875,000 sale proceeds after selling costs leaves $685,000 of end debt. The old loan is already included in peak debt, so don't subtract it from the sale proceeds a second time.

A sale $50,000 below the estimate would leave $735,000 instead, before overlap costs. The buying costs here are an assumption, not a duty calculation. Interest, fees, your deposit timing, retained cash and the lender's actual structure can change both the peak debt and end debt.

Check the lending before committing to dates

Pre-approval and the property

Start the lending discussion while you're planning the move. Conditional pre-approval can help frame a search, but it isn't final approval for a particular property or permission to waive a finance condition. Confirm its conditions and expiry, and update the lender if your position changes.

The loan you're leaving

Ask the existing lender for a payout estimate, discharge requirements and timing. If your loan is fixed, request a current break-cost estimate. Don't assume the current loan or fixed rate can simply move to the next property; any portability or security substitution needs lender agreement.

The two contracts

Have your solicitor or conveyancer check deposit dates, finance and sale conditions, settlement order and the consequences of delays before signing or changing conditions. I'll coordinate the lending side; your legal adviser handles the contract advice. A deposit due before the sale settles needs its own funding plan.

Keeping your current home as a rental?

The current loan stays in place, so the comparison includes both loans, potential rent and the costs of owning both properties. I'll look at that lending together. The investment property loans guide explains how rental income and existing debts enter the assessment.

Get tax advice before changing how you use the property or its loan.