When you’re already on the property ladder, buying a new home means you also have to think about selling your current one.

Buy first or sell first?

In an ideal world, you'd settle both your sale and purchase properties on the same day. In the real world, you may need to make some tough calls about the timing of your purchase.

Do you sell your current home first, then look for something new to buy? Or do you buy a new place first then cross your fingers and toes that you can sell your old house and don’t end up having to pay two mortgages?

There are pros and cons to both approaches.

Buying before you sell

If you buy a new home before you manage to sell your current one, you’re likely to need something called a bridging loan. This is a short-term, interest-only loan that’s designed to help you ‘bridge the gap’ between buying and selling.

You’ll continue to pay your old home loan at its usual repayment rate and you’ll also pay the bridging loan on your new property. Interest rates on bridging loans are 1% higher than our standard variable rate.

Pros and cons of a bridging loan

A bridging loan can make the difference between getting the right house and missing out. But if your current house takes a while to sell, you could be stuck paying two loans for a while. If your house sits on the market for a long time, you might also have to drop the price, getting less than you expected for it, which means you could end up with more debt than you planned on.

Selling before you buy

Selling your current house before you buy a new one means you won’t end up stuck with two mortgages. You’ll also have a better idea of your budget as you’ll know exactly how much you have available to spend.

The downside to this approach is there’s no guarantee you’ll be able to find your next home before your house sale settles. This means you could find yourself back renting for a while as you house hunt.

Moving your home loan to your new house

If you already have a home loan with Kiwibank, we can usually switch it straight over to your new property. If you’re on a fixed rate, that will generally stay the same until the end of your current term. If you need to borrow more to afford your new home, this will be set up as an extra part of your home loan.

Talk to an expert - we're here to help

Our home loan experts have dealt with plenty of homeowners who are juggling selling and buying, so give them a call to talk through your options. They’ll also be able to let you know how much you can borrow and whether you’ll be able to switch your current home loan over to any new house you buy.