Upgrading to your next home in Sydney's Eastern Suburbs. Selling one home and buying the next means two settlements that have to line up. Shane works out what you can buy for, then arranges the finance to suit the timing, comparing 30+ lenders with a $0 brokerage fee.
How much can you buy for?
It comes down to three things. The equity you'll have once your current home sells, how much you can borrow, and what the purchase costs.
Your equity after the sale
Take the sale price, less the agent's commission and marketing, and less the loan that's paid out at settlement. What's left is the equity that goes into your next purchase.
How much you can borrow
Lenders assess your repayments at a buffer above the actual rate, usually 2 to 3 percentage points depending on the lender. They then take out living costs and any other debts. Each lender treats your income, expenses and buffer differently, so the same household's borrowing capacity can be hundreds of thousands of dollars apart between lenders. That's why Shane runs your figures across 30+ lenders before you start inspecting.
What the purchase costs
On a $3.2 million purchase in New South Wales, stamp duty, registration fees and conveyancing come to about $160,650. It's payable at settlement, on top of the price.
Shane also arranges home loans, first home buyer loans, refinancing, investment loans, pre-approval, renovation loans, construction loans, self-employed home loans, debt consolidation and specialist lending.
Sell first, buy first, or settle both on the same day
You'll time an upgrade one of three ways. The right one depends on your equity, the market and how much risk you're comfortable with.
Sell first
You know exactly what you have to spend, and you only ever have one loan. If your sale settles before you've found the next place, you'll need to rent in between or negotiate a longer settlement with your buyer.
Settle both on the same day
You agree a settlement date on your sale that matches your purchase, so both settle on the same day. There's no bridging loan and no rent in between. It takes negotiation on both contracts, which is easier when you're buying by private treaty, because the settlement date is part of the deal. One couple sold first on a long settlement and settled both on the same day, with no bridging loan.
Buy first with a bridging loan
You buy the next home first, then sell your current one within a set period. In between, you have both loans and pay interest on the combined amount. It's the most flexible option and the most expensive. In the Eastern Suburbs, where good houses often sell at auction, it lets you bid before your own home has sold.
How a bridging loan works
A bridging loan lets you buy your next home before you've sold your current one. Four terms decide what it costs and how much you can borrow.
Peak debt
Everything you owe while you own both homes. That's your current loan, the new purchase price, the costs, and the interest added while you sell. Lenders generally limit peak debt to 80% of the combined value of both properties. They work from their own valuation of your current home, not the agent's appraisal.
End debt
The loan left once your current home sells and the proceeds pay down the bridging loan. It's the loan you keep long term, and the one most lenders assess your income against. Some also want to see you can cover the interest on the peak debt while you sell.
The bridging period
Most lenders give you up to 12 months to sell your current home, and expect the bridging loan repaid by the end of it. If the home hasn't sold, some lenders can treat the loan as in default and charge a higher rate.
Interest while you sell
Many lenders capitalise the interest, adding it to the loan rather than asking for repayments, so you're not paying two loans out of your income at once. Others want interest-only repayments on the full amount. Either way you're paying interest on the peak debt, and some lenders charge a higher rate on the bridging portion than on a standard home loan.
Shane checks first whether you need a bridging loan at all. A same-day settlement, or a longer settlement on your sale, can often do the same job for less.
Watch Shane talk through bridging loans
Shane joined buyer's agents BBA Property Advocates to talk about pre-approval, bridging loans and buying your next home in Sydney before you sell. It runs about eight minutes.
An upgrade, worked through
The same move done two ways, using illustrative figures.
Illustrative example
Say you own a two-bedroom unit in Coogee worth $1.8 million, with $500,000 owing. You've found a semi in Randwick at $3.2 million. Stamp duty, registration and conveyancing come to about $160,650.
Sell first
$2.10M loan once both settle
The unit sells for $1.8 million and nets $1.76 million after the agent's commission and marketing. $500,000 of that pays out the old loan and $1.26 million goes into the purchase. The new loan is about $2.1 million, roughly 66% of the semi's value.
Buy first with a bridging loan
$3.86M peak debt while you sell
That's the $500,000 on the unit, the full $3.2 million purchase and the costs. With both properties valued at $5 million, an 80% limit allows peak debt of up to $4 million. That leaves about $139,000 for interest to be added while you sell. Once the unit sells, the end debt is the same $2.1 million loan, plus the interest that's been added.
Both end at the same loan. Buying first adds the interest on the peak debt for as long as the sale takes. You'll also pay a second set of council rates, strata levies and insurance while you own both.
Shane is absolutely amazing. He makes the whole process so seamless and supports you every step of the way. He is honest and very approachable. Would definitely recommend.
You won't find a better Broker in Sydney!! Shane got us the best deal and went well beyond the call of duty to ensure our deal went through without a hitch. Thank you for all your help Shane, we couldn't have done this without you!
Shane has been absolutely amazing. His professionalism and availability at every step made this whole process so much easier. He answered all our 1,000 questions with such patience and expertise, which gave us the confidence to take this big step. We truly recommend him.
Shane's knowledge, expertise, efficiency, communication & customer service is top tier. He was super helpful in explaining things I didn't understand & in a timely manner. Kept us informed at all times as to where our application was at etc. Would definitely recommend. 10/10. Thanks Shane!
I had a great experience working with Shane. He was professional, knowledgeable, and always quick to respond to any questions or concerns I had throughout the process. His communication was excellent, and he made everything straightforward and stress-free. I really appreciated his reliability and dedication, and I wouldn't hesitate to recommend him to anyone looking for a trustworthy broker.
Finding the right mortgage broker can be daunting, but save yourself the time and go to Shane from Finance Craft. He is experienced, responsive, and patient with all questions. Shane acted promptly to remove any blockers and challenges, ensuring a smooth and stress-free process. He was always available for questions and calls, demonstrating his commitment and dedication, guiding us every step of the way and making the entire experience seamless. We will use his services for future property finance matters. Highly recommended, thanks Shane!
Your upgrade in four steps
Free call
Shane goes through your current home, your loan, your income and the kind of place you're after. It takes under 30 minutes and costs nothing.
What you can buy for
He works out your borrowing capacity across 30+ lenders and the equity available in your current home. If you need a bridging loan, he orders a lender's valuation early, so you're planning on the bank's number rather than the agent's.
Choose the timing
With the numbers in hand you pick sell first, buy first or a same-day settlement. Shane arranges pre-approval, and the bridging loan if you need one, before you bid or sign.
Two settlements, one broker
Shane coordinates the discharge of your old loan, the new loan and the dates on both contracts through to settlement, then reviews your rate every year after.
Where Eastern Suburbs upgraders tend to move
Most upgrades in the Eastern Suburbs mean more land, not just more rooms. What you're buying affects how the lender values it and how the loan is set up.
From a beach unit to a semi
A common move is from an art deco or walk-up unit near the beach to an interwar semi or California bungalow in Coogee, Clovelly or Randwick. Those houses often sell at auction, where there's no cooling-off period and the deposit is due on the day. Your finance, and the bridging loan if you need one, has to be approved before you bid.
Scarce houses in Bronte and Bondi
Houses in Bronte and Bondi rarely come up, and they sell quickly when they do. If you want to stay in the same streets, a bridging loan lets you buy when the right house comes up rather than waiting until yours has sold.
Terraces in Paddington, Woollahra and Waverley
Many terraces in Paddington, Woollahra and Waverley are in heritage conservation areas. If you plan to extend later, the lender still values the terrace as it stands today. So you'd borrow for the purchase now and fund the work later through a renovation loan.
More land in Maroubra and Kingsford
Post-war houses on larger blocks in Maroubra and Kingsford leave room for a rear extension or a secondary dwelling down the track. Some upgraders buy for the land and build later, funded by a construction loan that releases the money through progress payments.
Upgrading FAQs
How much can I buy for when I upgrade?
Add the equity left from your current home, after selling costs and paying out the loan, to what your income lets you borrow. Then take off stamp duty and costs. On a $3.2 million purchase in New South Wales, stamp duty, registration and conveyancing come to about $160,650. I work out your borrowing capacity across 30+ lenders, so you're working from the real number before you start inspecting.
How much equity do I have?
Equity is what your home is worth less what you owe. The amount you can access is usually up to 80% of the value, less the loan, before lenders mortgage insurance is payable. On a home worth $1.8 million with $500,000 owing, that's $940,000 of available equity. Your income still has to support any extra borrowing.
How do I find out what my property is worth?
An agent's appraisal tells you what it might sell for. A lender's valuation tells you what the bank will lend against, and it's often more conservative. If you need a bridging loan, the valuation is the number that counts, so I'll order one early.
Should I sell first or buy first?
Selling first is cheaper, and you know exactly what you're working with. Buying first means you don't miss the right home, but you have both loans until the sale settles. A same-day settlement avoids both problems if you can negotiate the dates. I'll work through all three on your figures, and if a bridging loan doesn't make sense, I'll tell you.
How does a bridging loan work?
The lender funds the new purchase while you still own your current home. Your peak debt is both loans plus costs and interest, and lenders generally limit it to 80% of the combined value. Once your home sells, the proceeds pay down the bridging loan and you're left with the end debt, which is a standard home loan. Most lenders give you up to 12 months to sell.
What happens if my home doesn't sell in time?
At the end of the bridging period the lender expects the bridging loan repaid. If it isn't, some lenders can treat the loan as in default, charge a higher rate and step in to sell the property. That's why it's worth pricing your home to sell well within the bridging period. If your sale is taking longer than expected, talk to me early, while there's still time to work something out with the lender.
Can I keep my current home as an investment and buy again?
Often, yes, if your income supports both loans once the rental income is included. Interest on the loan that bought your current home can generally become deductible once it's rented. Money borrowed against it to buy the new home usually isn't deductible, because the tax treatment depends on what the borrowed money paid for, not which property secures it. Talk to your accountant about the structure before you settle.
How long does it take?
Pre-approval typically takes about two business days, and a straightforward formal approval three to five. The settlement dates are set by your contracts, so the earlier we start, the more say you have in how they line up.
Do you charge a fee?
No. Finance Craft charges a $0 brokerage fee. I'm paid a commission by the lender when your loan settles, so the service costs you nothing.
Do you help upgraders outside Coogee?
Yes. I'm based in Coogee and work with clients across the Eastern Suburbs, including Clovelly, Bronte, Bondi, Randwick, Maroubra, Paddington and Woollahra. I also help clients across greater Sydney and Australia wide.
Find out what you can buy for.
Book a free call. No obligation. Just an honest look at what you can buy for and how to time the move.
Your local Sydney Eastern Suburbs broker
Shane specialises in helping clients across Coogee, Clovelly, Bronte, Bondi, and all surrounding Eastern Suburbs.