Bridging finance helps manage the gap between buying your next home and selling your current one. It’s ideal if you’ve found your new home but haven’t yet sold your existing property. This type of finance is typically short-term—often six to twelve months—and is usually costlier than regular mortgages but can help you navigate securing your next purchase without pressure to quickly sell your current home.

Whether your current home would be a good investment to hold when you move is always worth considering. This decision depends on several factors like potential rental returns and your overall financial picture. Understanding the impact on your purchase options and the cashflows of holding the property is key. The structure of your lending can make all the difference to how this stacks up.

Understanding whether you have access to both the borrowing capacity and the equity / savings to be able to buy before you sell is key. While it partly comes down to what you can borrow, also consider what you should borrow. It’s crucial to ensure that you can comfortably afford the transition without overextending your finances​.

The primary risk of using bridging finance to buy before you sell is not selling your current home in time, or not achieving the anticipated sale price, which might impact your financial position and size of your remaining mortgage (assuming you sell for enough to meet the banks bridging loan terms). It’s essential to be mindful of the total costs involved in both transactions and ensure they fit within your budget​. Going into this type of transaction with a back up plan is always recommended.

Loan portability can be a beneficial feature, allowing you to transfer your current loan to a new property, potentially saving on refinancing costs and maintaining continuity with your lender​. Loan portability is a niche feature and requires that you don’t need increased borrowings and that your sale and the new purchase will settle at the same time.

A buyer’s agent can provide valuable market insights and negotiation expertise, especially in competitive housing markets. They can help you secure a property that fits your needs and budget, potentially saving you time and money. We’re seeing that a lot of properties are changing hands off market, so a well-connected, experienced buyers agent may help you access more choice too.

Consider the long-term financial implications of a larger mortgage, ensuring it aligns with your budget and investment goals. It’s worth considering how much of the mortgage you’ll have paid off by your preferred retirement age and considering how you’ll clear the mortgage then so you can weigh up your options with a long term view. Another consideration is whether upgrading will prevent you from purchasing an investment property (if this is one of your goals) so you can make an informed decision before committing.