Outgrown your current home? Moving to better suburb? Need more space? Upgrade using equity, bridging finance, or sell-then-buy strategies.
Common reasons Australians upgrade their property.
Started with 2-bed apartment. Now have 2 kids, need 4 bedrooms, backyard, home office. Time to upgrade to family-sized home.
Bought what you could afford 5 years ago. Now earning more, want to move to better school zone, closer to work, or more desirable suburb.
Bought for $500K, now worth $750K. Built $250K+ equity. Can use that equity as deposit for $950K upgrade property.
Want pool, bigger kitchen, double garage, study, better layout. Current property doesn't have what you need anymore.
Career progression, promotion, both partners working. Income up 50-100% since original purchase. Can now afford significantly more.
Kids approaching school age. Want to move into catchment for top public school or closer to private school you're sending them to.
Different approaches depending on your equity, timing, and risk tolerance.
Sell current home, use proceeds as deposit for upgrade. No bridging finance risk.
Can buy: $950K property with 40% deposit ($377K), borrow $573K
Buy new property first, using equity as deposit. Sell old property within 6-12 months.
Step 1: Lender approves bridging loan based on equity in current home ($377K equity = can borrow against this for new deposit)
Step 2: Buy new $950K property using bridging funds (borrow 100% including costs temporarily)
Step 3: Move into new property immediately
Step 4: Sell old property within 6-12 months (lender deadline)
Step 5: Use sale proceeds to pay down new mortgage to target LVR (60-80%)
Use current home's equity as deposit, sell and settle on same day (no bridging needed).
Best for: Upgraders with strong equity position (40%+ LVR) who can time settlements carefully. Avoids bridging finance costs while securing new property before selling old one. Requires excellent coordination but saves $10K-$20K in bridging fees.
Calculate your upgrade capacity based on current equity and income.
Maximum Upgrade Price:
$1,450,000
Current value ($850K) + Additional borrowing ($600K) = $1,450K max upgrade
This is theoretical max. More comfortable at $1.2-1.3M range.
1. Equity position: More equity = bigger deposit for upgrade. Need 20% equity minimum to upgrade comfortably.
2. Income growth: If income has increased significantly since original purchase, borrowing capacity expands.
3. Other debts: Car loans, credit cards reduce upgrade capacity. Pay these down first to maximize borrowing.
4. Interest rates: Rising rates reduce borrowing capacity. Falling rates increase it.
Bridging finance means temporarily paying both old and new mortgage. Many can't afford this even for 3-6 months.
Still have 85-90% LVR on current property. Not enough equity to use as deposit for upgrade.
Used bridging finance, bought new property. Now old property isn't selling within 6-12 month deadline.
Upgrading from $700K to $1.2M property. Stamp duty jumps from $28K to $51K - an extra $23K not budgeted.
Minimum 20% equity in current property is recommended. For example, if property is worth $600K, you should owe no more than $480K ($120K equity = 20%). This gives you enough deposit for next property without LMI. With less equity, you can still upgrade but may need LMI or guarantor. The more equity you have, the smoother and cheaper the upgrade process.
Bridging finance: Pay 2-3% higher interest for 3-12 months + $1-2K fees + holding costs on both properties. Total: $10K-$25K. Sell-first: Pay rent for 1-3 months ($8K-$12K) + moving costs twice ($2K-$4K). Total: $10K-$16K. Bridging is slightly more expensive but offers convenience of single move. Sell-first is cheaper but requires two moves and temporary rental.
Yes, if you can afford both mortgages long-term. Strategy: (1) Use equity to buy upgrade property, (2) Rent out current property, (3) Rental income offsets most/all of the old mortgage, (4) You pay new mortgage only. This works if you have strong income and 40%+ equity. Bonus: Build investment portfolio. Tax benefits: Interest on investment loan is deductible. However, you'll pay CGT when eventually selling first property.
Depends on property condition and market. Cosmetic improvements worth it: Fresh paint ($3K = +$15K sale price), new carpet ($4K = +$10K), landscaping ($2K = +$8K), staging ($2K = faster sale). Not worth it: Kitchen reno ($25K = +$20K maybe), bathroom ($15K = +$10K), structural. If property is dated but liveable, sell as-is and price accordingly. Let buyer do their own renovation. Exception: Very poor condition properties may need basic work to be saleable.
Options: (1) Renovate/extend: Add bedroom or second storey - may be cheaper than moving, (2) Wait 2-3 years: Build more equity via payments + growth, increase income, (3) Lateral move: Same price range but different layout (4-bed house in suburbs vs 3-bed closer in), (4) Move to affordable area: Further out or different suburb, same space for same price, (5) Parent guarantor: Boost borrowing capacity $100K-$200K. Often renovation or waiting is smartest financial move.
Good time to upgrade when: (1) Built 20%+ equity, (2) Income increased 30%+, (3) Urgency (new baby, school zones), (4) Strong buyer's market (more choice, less competition). Wait if: (1) Less than 15% equity, (2) Job instability, (3) Seller's market (paying premium), (4) Interest rates rising rapidly. No perfect time - if you have equity, stable income, and genuine need for more space, upgrade. Don't try to time the market perfectly.
We'll calculate your upgrade capacity, explain your options (sell-first vs bridging), and find the best lender for your situation.
✓ Equity & borrowing calculations • ✓ Bridging finance expert • ✓ Sell-first vs buy-first strategy