Exit costs when refinancing
Refinancing can be a great way to save money if you believe you are paying…
Crunch
your numbers
Use our online calculators to work out how much you can borrow, loan repayments, stamp duty and lots more.
- Blog
- Insights
Three finance strategies for purchasing your next property
Whether you’re upsizing, downsizing or just moving to a house in a new location, your situation has probably changed since you last bought.
Here’s a refresher on some of the finance options available when you’re purchasing your next house and a few other key considerations.
The straightforward approach: Sell your current house to pay for the second
If you’re not planning to keep your property as an investment, one way to keep the transition as straightforward as possible is to sell your existing dwelling before buying the next.
| Pros | | | Cons |
| • Know how much capital you have for your new purchase • More time to shop around with less stress • Improves your borrowing power and how you appear to lenders, perhaps netting you a more competitive interest rate |
• May need to make interim living arrangements, renting or living with family • Unpredictable house prices could mean an increase at any time, especially in more affordable regional areas, leaving you paying more for less |
Plan B: Consider a bridging loan
A bridging loan gives you access to funds to buy your next property before you’ve sold your current one, which isn’t always an option.
The lender adds the value of your new home to your existing mortgage, then subtracts the likely sale price of your existing property. You’ll need a property valuation for each property.
Payment scheme
Typically, you pay interest-only on the entire loan amount until the first property has sold and the principal is repaid in full. Bridging loans are sometimes structured so you only make interest repayments on the loan until settlement, capitalising the interest due on the rest of the loan. Either way, once you have sold your existing property, the loan reverts to an ordinary home loan.
Should I buy first and then sell?
| Pros | | | Cons |
| • If you can afford to manage two home loans at the same time, or if the bridging loan is an option, then this may be less disruptive and give you more time and flexibility to find the ideal place • If building a new house, then this option allows you to stay in your existing property until your new house is ready • Save money on rent and moving costs by knowing exactly where you’re going when you’re going to move. |
• Must service and manage two loans at the same time, reducing borrowing capacity • The longer it takes to sell your existing house, the more interest you’ll pay • You need at least 20% of the total value of both properties (either in cash or equity) to qualify for a bridging loan |
Build your property portfolio: Consider investing
Do you really need to sell your existing property? With Australian dwelling values continuing to see record growth, now might be the time to consider growing your wealth through investing.
Should I invest?
| Pros | | | Cons |
| • By holding on to your first property and renting it out, you may be able to generate a reliable secondary income • You may be able to continue to leverage the investment meaning you can purchase more with less • It is a tangible asset you can see and touch, which can create comfort seeing your stable investment • The interest on an investment home loan may be tax deductible |
• You may have period where you do not have rental income which means covers costs for the property • Managing tenants isn’t always easy • There could be ongoing costs with maintenance |
Whatever your circumstances or situation, we’d be happy to help you set up the most suitable plan to achieve your financial and property-buying goals. Get in touch with us today!
Should you refinance now?
With millions of Australian homeowners likely to be slugged with higher mortgage repayments due to…
Are you a first homebuyer looking for
Help?
We can help get you into your new home.
We’ve worked with clients across Australia to access the different first home owner grants (FHOG) as well as the various stamp duty and other concessions that may be available depending on which state you are in. We can talk you through your various options as well as helping you compare things like buying vacant land vs. an established home.
Crunch
With 40+ lenders to choose from, the options are never ending!
A word from our satisfied customers
Maxine Zhong
19 October 2023
Amanda has been such an incredible support throughout our very first time going through the home loan process.
Her thoughtfulness to regularly check in to make sure all our questions were answered and that all our documents were in place helped to make the whole daunting process feel seamless and easy. I could not recommend her enough - she made sure to keep us informed every step of the way and made sure all necessary documents/processes were completed well ahead of time so we never had to worry about missing any steps.
She went well above and beyond her role, and I know we will definitely be coming back to her in the future, as well as recommending her to all of our networks! Thank you again, Amanda!
Mark Nesbitt
11 October 2023
Greg and the team provide an outstanding service. Highly recommended
Christine Tran
23 September 2023
Yuval handled my first ever home loan, he did such an amazing job I asked to him to refinance for me 2 years later. Yuval made everything very easy for me, and will give his best recommendation as if it was his own. Would always recommend Yuval :)
David Petrini
25 August 2023
Yuval Bloomfield was an absolute delight to work with. He made it extremely easy for my clients to discuss about their financial situation. With Yuval's strong connections he was able to get the loan my clients wanted in very quick time.
Will definitely refer Yuval again.
Sophie Linehan
24 August 2023
Greg and the team at 1st Street were fantastic all the way through the process of getting our financing sorted and buying a new home. They not only secured us the most competitive mortgage in the market but they also gave advice on a number of mortgage-adjacent questions that came up along the way. Their responsive and thoughtful guidance helped make the nail-biting process clear and calm. We would definitely recommend their services.
Gabrielle Scott-Jones
18 August 2023
Greg and his team gave me exceptional advice and support. They were timely and detailed in their responses and dealt patiently with me as a first home buyer and all of my questions. The lender at the bank commented on how well I was being looked after compared with other brokers in the market. I’d highly recommend 1st Street to anyone, including friends and family.
Eli Simic
15 August 2023
Great communication and fast service
Richard Kuipers
11 August 2023
Jeremy and his team are superb. Negotiated the best deal for us and were an absolure pleasure to work with. Highly recommended, you can't do any better in my opinion.
Jordan Rivkin
1 August 2023
The team at 1st Street truly are professionals. I can't recommend Jeremy highly enough, he is extremely competent and just a great guy. You're in safe hands with 1st Street!
Yossi Bengida
23 July 2023
Another amazing job by David and Bree.
Always available for our questions, helpful and just 10/10
Seriously good work !!
See you on the next one :)
Yossi and liz