Buy First or Sell First?

Upgrading homes? The hardest part is the timing. See how bridging finance actually works, what each path costs, and which suits your situation — with live numbers and stress tests.

How bridging actually works

A bridging loan is a short-term facility (typically 6–12 months) that lets you buy before you sell. Your Peak Debt = existing mortgage + new purchase + costs + any capitalised interest. When your home sells, the net proceeds wipe most of it out, leaving the End Debt — the ongoing loan you’ll service from there.

Your Current Home

Estimated sale price

Current mortgage balance

Selling costs

Agent + marketing — about $30,000

Your Next Home

Purchase price

Purchase costs (%)

Stamp duty + legals — varies by stateOr override ($)

Using $88,000Funds you'll contribute

Savings, gift or other cash going into the purchase — reduces Peak Debt

The Bridging Period

Bridging interest rate

Major-bank ~6.5%; private/non-bank often 8.5%+Expected time to sell — 6 months

Repayment type

How the Bridge Works for You

Peak Debt

$2,156,786

Most you'll owe, while you own both

Capitalised interest

$68,786

Over 6 months at 6.5%

Net sale proceeds

$1,170,000

After 2.5% selling costs

End Debt

$986,786

Becomes your ongoing loan

End Debt repayment

$6,005/mo

P&I, 30yr at 6.14%

Base peak (pre-interest)

$2,088,000

Mortgage + purchase + costs

The Bridging Hump

Debt climbs to Peak Debt when the new home settles, edges up while interest capitalises, drops sharply when your home sells, then amortises down as the ongoing loan.

What if the sale takes longer — or sells for less?

End Debt across different sell times and sale-price haircuts. This is the scenario that worries clients most.

Compare Your Three Paths

Path A

Buy First (bridging)

Estimated transition cost (~6mo)

$71,786

Upside

Secure the home you want. One move. No rushed sale.

Risk

Shortfall if home sells low or slow; you carry peak debt.

Path B

Sell First

Estimated transition cost

$55,100

Upside

Certainty of proceeds; cash-buyer leverage.

Risk

May not find the right home in time; market drift risk.

Path C

Keep It & Rent It Out

Net holding cost (illustrative, 12mo)

$93,623 / yr

Upside

Build a portfolio; no sale costs.

Risk

Must service two loans; tax + tenant considerations.

Rent / week (Path B)

Months between sell & buy — 3

Cost per move

Market drift %

Establishment fee %

0% major-bank; up to ~2% non-bankValuation fee

Discharge fee

Path cost comparison

There's rarely a "free" path — bridging costs interest, selling first costs rent, moves and market risk, and keeping both means carrying two loans. The right call depends on your equity, serviceability and how confident you are in your sale.

Bridging / Buy First

•Bridging is usually capped at 6–12 months — past that you may face higher rates or pressure to discount.
•Capitalised interest compounds — the longer the sale takes, the more it costs.
•You're qualified on your End Debt, and may need a savings buffer to cover the bridging period.
•Major-bank bridging sits near standard variable; private/non-bank is often 8.5%+.

Sell First

•Build in the cost of renting and moving twice — and the risk the market moves before you buy.
•A cash-in-hand position is a strong negotiating lever.

Keep & Rent

•You must service both loans — the lender won't count 100% of rent.
•Turning a former home into an investment has tax and CGT consequences — get accountant advice first.

Not sure which path is right? Let's map it out together.

Timing your move is where upgraders win or lose. Speak with an Alcove lending adviser about the structure that fits your equity and your sale.

Book a Call →