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Straight Answers · Buying your next home
Do I have to sell my current home before I buy the next one?
Bayley Clarke · Mortgage broker on the road · Reviewed 24 August 2026 · 4 min read
The short answer
The answer depends. For a lot of people, if they’ve owned their home for a couple of years, they’ve likely got a lot of equity in that property, which can be used and supported by something called bridging finance.
Banks will let you borrow the full amount required to buy your next property before you’ve sold your current property, on the premise that it’s sold within 12 months. You do pay a little bit of a cost of convenience, because it is a relatively high risk transaction from the bank’s perspective, but it does support you being able to buy your next place, move into it, then sell your place.
The 40 second version. Everything below is the detail underneath it.
Three ways to move house
Nobody has to sell first. It’s a choice between three paths, and each one trades money for certainty in a different place.
| Path | What you’re carrying | What it costs you | What it depends on |
|---|---|---|---|
| Sell first, then buy | One loan, with a gap in between | Rent or a stay with family, two moves, and possibly missing the place you wanted | Finding somewhere to live in the gap |
| Buy first with bridging | Both properties, one bigger loan, for a period | Interest on the bigger debt while you sell, sometimes a higher rate or a fee | Enough equity in the current home, and the sale landing inside the window |
| Same day settlement | One loan at a time | Nothing extra | Four separate parties all being on time on one date |
Selling first is the cheapest path on paper and the most disruptive in real life. Buying first is the most comfortable and it costs something. The same day version is the cheapest and the least likely to actually happen, which is its own answer. Most people who’ve owned their home for a few years end up choosing between the first two, and the thing that opens the second door is equity.
Why a couple of years of ownership changes the answer
Equity is the gap between what your home is worth and what you owe on it. Two things widen it over time: the market moving, and every repayment you’ve made. Someone who bought five years ago usually has a lot more of it than someone who bought last year, and that’s what a bridging lender is really looking at. It isn’t lending you money you don’t have. It’s lending against value you already have but can’t reach until the place sells.
| Home worth $700,000 with $300,000 owing, buying for $900,000 | Amount |
|---|---|
| Equity in the current home | $400,000 |
| Peak debt while you own both (including about $50,000 of costs) | $1,250,000 |
| Combined value of the two properties the lender holds | $1,600,000 |
| End debt once the sale clears | $550,000 |
Illustrative numbers, not a quote. The lender is covered by two properties worth far more than the peak, which is why it’s willing to carry a debt that looks enormous on its own. What it needs from you is a credible sale inside the bridging window, and the ability to live with the end debt once it’s over. How lenders test that, and why the peak versus end distinction decides most bridging applications, is covered in peak debt vs end debt.
The cost of convenience
From the bank’s side a bridge is a bigger loan, secured against a property that’s about to change hands, for a period nobody can fix in advance. That’s the risk you’re paying for. It shows up as interest on the peak debt for as long as the bridge is open, and at some lenders as a higher rate on the bridging portion or a fee. Whether that interest comes out of your pocket each month or gets added to the loan and paid from the sale is the next question.
What you get for it is the version of moving house most people actually want. You find the place, you make an offer that isn’t subject to selling anything, you settle on a date you chose, you move once, and then you sell without a deadline hanging over the campaign. For a lot of households that’s worth a few months of extra interest. For some it isn’t. The point is that it’s a decision, not a rule.
Four things that catch people out
- Thin equity makes buying first hard. If you bought recently with a small deposit, the gap between value and debt may not be enough to carry a second property. That’s not a judgement on you, it’s arithmetic, and selling first is usually the cleaner path.
- Twelve months is a ceiling, not a target. The bridging window is there to get you through a sale, not to let you wait for the perfect price. Every extra month adds interest to the loan you keep, so list early and price to sell.
- A subject to sale offer is the weakest one on the table. Making your purchase conditional on selling protects you, but a vendor with other offers will usually take the unconditional one. Bridging is how people buy first without that clause.
- Plan the sale price low. If the old place fetches less than you assumed, the shortfall lands on the loan you keep for 30 years. A conservative figure now is cheaper than a surprise later.
What to bring, and what to ask
Your current loan statement and a realistic idea of what your home is worth give me the equity. The price range you’re buying in and your savings balance tell me whether a bridge is available to you, what it would cost per month of carry, and whether selling first would leave you better off.
Then the question isn’t “do I have to sell first.” It’s “what does buying first cost us, can we carry it, and is that worth not moving twice.” Three numbers and an honest answer about how you want the next six months to feel.
This page describes how bridging and simultaneous settlements generally work as at August 2026. Individual lenders aren’t named on purpose: bridging terms move, and the right structure depends entirely on your situation rather than on a list in an article. The other bridging answers on the list: buying and selling on the same day, repayments during a bridge and peak debt versus end debt.
Thinking about buying before you sell?
Send me your loan statement, a rough value on your place and the price range you’re looking at, and I’ll map sell first against buy first with real numbers: the equity, the peak debt, the end debt and what a month of the bridge would cost. Takes maybe ten minutes and it costs you nothing.
No application, no credit check, nothing on your file. Just the numbers.
Next question
Do we need a bridging loan if buying and selling on the same day?If you can line both settlements up on one day, you don’t need a bridge at all. This is how that works, and why it so rarely does.
Related answers
Do I make repayments during bridging finance? Peak debt vs end debt in bridging finance Does refinancing put me back to a 30 year loan term?Got a question this page didn't answer? Send it to me and it goes on the list.