Upgrading families in suburbs like Greystanes, Girraween, Wentworthville and Glenwood often face the same dilemma: sell first and risk having nowhere to go, or buy first and risk owning two homes. Bridging finance is designed for the second option.
How it works
The lender combines what you owe on your current home with the cost of the new one to create a peak debt. Once your current home sells, the proceeds pay down the loan to an end debt, which becomes your ongoing home loan.
| Example | Amount |
|---|---|
| Current home loan | $400,000 |
| New home price plus costs | $1,350,000 |
| Peak debt | $1,750,000 |
| Sale of current home (net) | $1,050,000 |
| End debt | $700,000 |
Figures are illustrative only.
What lenders look at
- Whether you can afford the end debt long term.
- A realistic, often conservative, value for the home you're selling.
- How much equity you have across both properties.
- A time limit to sell, commonly 6 to 12 months.
Alternatives
- Sell first, rent short term. Lower risk, but you pay moving costs twice.
- Longer settlement or a delayed settlement negotiated on your sale.
- Renovate instead of moving, using equity release.
Plan your upgrade with Ram
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