You’ll need another home loan, but you might not need another deposit – you could use the equity in your existing home instead. This will depend on the value of the second home and the amount of equity you hold in your first property, plus the purpose of your new property.
This can be a smart financial move, but there’s a few things to think about – like which areas have high renter demand, and the fact that you’ll pay investor interest rates. Your Home Lending Specialist can talk you through your options.
Getting a loan for a holiday house is a bit different to other home loans. To find out if you’re eligible, you’ll need to speak to your Home Lending Specialist.
If your next deposit is more than the funds from the sale of your house, you’ll need to chip in some cash as well.
Make sure you’re ready for any changes to your existing expenses. Think about how much you currently spend on your mortgage repayments, insurance, maintenance, rates, commuting and other costs. Compare this to your new repayments to make sure moving is the right decision for you.
Same day, simultaneous settlement is ideal. It’s when the sale of your current home and the purchase of your new home happen on the same day, so the funds just move from one loan to the other. It also means you won’t have to pay two mortgages at once, or rent a place in between selling and buying. Talk to your Home Lending Specialist and settlement agent to see if they can help you make it work.
If it’s not possible, your Home Lending Specialist can help you look into other options – like bridging finance. This is a short-term loan to cover you in between selling your house and buying your new one.
There are always costs involved when buying and selling properties – things like bank, settlement and transfer of land fees, plus stamp duty. Take a look at our guide to upfront home buying costs, and estimate buying and selling costs with our home loan fees calculator.
Getting the right information from the beginning can make the process a lot smoother. Think about:
- Talking to your Home Lending Specialist
- Having your current home valued by an expert
- Checking out different neighbourhoods you’d consider buying in
- Researching the local market you’re interested in.