Can I sell one property if my loans are cross-collateralised?

Yes. The bank will generally want the loans that remain to sit under 80% of the value of the property you're keeping, so some of your sale proceeds may need to go towards paying down the debt.

How much will I need to pay down when I sell a crossed property?

Roughly the difference between what you'll still owe and 80% of the fresh valuation on the property you're keeping. A higher valuation means a smaller pay-down.

Why does the bank want money when I sell one property?

Because it lent on both properties together. If the one you're selling held most of the equity, the remaining property may not support the loans on its own, so the bank wants the balance brought back down.

Should I get a valuation before selling a cross-collateralised property?

Yes. A fresh valuation on the property you're keeping tells you the maximum loan that can stay, and from that you can work out what you'll pay down and what you'll walk away with.

Can I separate cross-collateralised loans?

Often, yes. Restructuring so each property carries its own loan can make future sales cleaner. Whether it's possible depends on the values and what you owe, which is worth checking before you list.

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I have two properties cross-collateralised at the bank and I want to sell one. How does it work?

Bayley Clarke · Mortgage broker on the road · Last checked 11 November 2026 · 4 min read

The short answer

Because the properties are tied together, the loans were given on the premise that both properties stay together. So when you sell one, the bank is generally going to want some of the money, especially if the property you're selling was doing the heavy lifting.

The bank needs whatever loans are left over once you've sold to sit under 80% of what the remaining property is worth, so you're not into lenders mortgage insurance territory. Get a fresh valuation on the property you're keeping, and the gap between what you owe and that 80% figure is roughly what needs to be paid down.

The 90 second version, filmed from the driver's seat. The rest of this page is the detail underneath it.

Why selling one affects the other

Cross-collateralising means the bank holds both properties as security for all of the loans, together. It's common when you've bought a second place using equity from the first, and the bank has simply tied the two titles to everything you owe rather than matching one loan to one property.

That works fine while you're holding both. But the bank lent on the strength of the pair. If the property you're selling has all the equity in it, maybe it funded 100% of the second purchase, then once it's gone the remaining property is suddenly carrying loans it was never meant to carry on its own. So before the bank releases its mortgage over the one you're selling, it wants to know the numbers still work on the one you're keeping, and it gets a say in how much of your sale proceeds go to the debt.

The formula: fresh valuation, then the 80% number

My rule of thumb when we go down this path is always to get a fresh valuation on the property that isn't being sold. That tells us the maximum loan that can stay at the bank once you've sold. From there it's simple arithmetic. Take 80% of that valuation. Compare it to everything you'll still owe. Whatever the difference is, that's the amount that needs to be paid down to keep that loan and that property held at the bank after you've sold.

To give you a bit of an idea, say the property you're keeping values at $600k and the total of your loans is $700k. 80% of $600k is $480k, so roughly $220k of your sale proceeds would need to go to the debt before the bank lets the other property go. If the sale nets you $300k after the agent and costs, you'd walk away with somewhere around $80k. If it nets $200k, you've got a shortfall to sort out before settlement.

That's why the valuation matters so much. A higher number on the property you're keeping means a higher 80% figure, which means less of your sale money gets swallowed by the pay-down.

When you're not sure which loan sits on which property

A lot of people who've borrowed a few times with the same bank genuinely don't know how it's all structured. The bank's done a bunch of crossing, there are three or four splits, and nobody's ever sat down and drawn it out. That's normal, and it's fixable.

Have a chat with me and I'll have a look at the loan documents and the securities and confirm all those details for you: which loans are secured by which property, what the bank will likely want on a sale, and what you'd actually walk away with. Sometimes the answer is to restructure before you sell, so each property carries its own loan, which makes this one and any future sale a lot cleaner.

The honest bit: plan the pay-down before you list

If you do sell one of them, you're probably going to need to pay down some debt for that to actually happen. That surprises people who were planning to use the sale money for something else, like a new purchase, a renovation or just a buffer.

So run the numbers before the property goes on the market, not after you've signed a contract. A valuation now, and a clear figure for what the bank will want, means you know what you're walking away with and there are no nasty surprises at settlement.

Want to know what selling one would leave you with?

A 30 minute call. We map which loans sit on which property, line up a fresh valuation on the one you're keeping, and work out the pay-down before you list.

Book a 30 minute call Call 0437 189 939

No cost to you. The bank pays me when a loan settles. · How I get paid

Next question

Can I refinance just one of my properties and leave the rest with my current bank?

Yes, but it depends how your loans are set up. If your properties are cross-collateralised.