Whether you want to sell your current home and move elsewhere or add to your property portfolio, you’ve got a few financing options to help make buying your second property easier. Your existing home could even help you with your next deposit.
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Buying a second property is a little different to buying your first – there’s more to think about when it comes to your strategy and objectives. There's also different loans available depending on what you're planning for your second 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 be paying investor interest rates. Learn more about what to look for in a good investment suburb.
Your Home Lending Specialist can talk you through your options.
Whether you're planning on selling your current home or renting it out instead, your Home Lending Specialist can talk you through your options. You could:
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.
Remember, your existing expenses are likely to change when you own a new property – so you’ll need to make sure you’re ready to make the switch to your new one. Think about how much you currently spend on your mortgage repayments, insurance, maintenance, rates, commuting and other costs. You can then compare this to your new repayments to make sure moving is the right decision for you.
Get an idea of what your home loan repayments could look like with our home loan repayments calculator.
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.
When it comes to the process, buying a second property isn’t too different to buying your first home. Just like before, you’ll likely need to have a 20% deposit available to avoid paying Lenders’ Mortgage Insurance (LMI) and apply for another home loan.
One of the handy things about buying your second property is that instead of saving cash for your new deposit, you might be able to use the equity in your existing home. Keep in mind, this will depend on the value and purpose of the house you’re looking to buy, plus the amount of equity you’ve got in your first property. Remember, if you’re selling your existing home and your next deposit is more than the funds from the sale of your house, you’ll need to chip in some cash as well.
Let’s take a look at the ways you can get it done.
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 stamp duty and LMI calculator.
Getting the right information from the beginning can make the process a lot smoother. Think about:
If you're turning your current home into an investment property, you'll have a few things to think about – like your rental yield and tax implications. It's a good idea to chat to an expert.
If you're selling your current property, see our handy guide to find out how and what to prepare.
Yes. A popular way to buy an investment property is to use the equity in your existing home. In most cases, you could borrow up to 80% of the value of your current property. Learn more.
If you use the equity in your existing property, you may not have to put any physical cash towards the deposit. Your usable equity is calculated by 80% of your property's value, subtract your current outstanding debt. Keep in mind – if your usable equity isn't enough to cover your full deposit plus any stamp duty and settlement costs, you'll still have to make a cash contribution.
There are a number of costs you need to consider when buying a home which also apply to your second home. Find out more.
Property is a long-term investment, so there are a few things to consider – like nearby amenities, proximity to public transport, and future development opportunities. See more about the features you should think about.
Talk to a Home Lending Specialist – when and where it suits you.