Thinking of moving up the property ladder? Here’s what to consider before making your next move.

Article published 26 May 2021

If you’re thinking of moving up the property ladder, there may be a raft of good reasons for wanting to do so. As the kids get bigger you may need more space. You may be hoping to secure a better location. You may be keen to trade up from an apartment to a house. Or you may be relocating for work purposes. Whatever your reason for upgrading, it’s important to think through the financial aspects.

Consider the equity in your existing home

In a nutshell, equity is the difference between your home’s current market value and the balance left owing on your home loan. And, when buying your next home, you could be able to use the available equity in your home as security instead of a usual cash deposit.  

Over the last 12 months, home values nationally have soared 7.8%.1 As a guide, five years ago, at the beginning of 2016, the median home price across the nation’s combined capitals was $595,000.2  Today that figure is $705,375.3  

The capital growth seen in so many parts of Australia is likely to mean some homeowners could have accumulated plenty of home equity, particularly if they’ve owned their home for a while.

Your Mortgage Choice broker can help you to work out how much equity you have in your property and how it can be accessed to fund your next move.

Low stock drives capital gains

A key factor driving higher home values at present is a serious shortage of homes listed for sale. According to CoreLogic, the situation is easing and new listings are now well above average. Even so, strong demand is still pushing prices up. That’s great news if you plan to sell as it increases the likelihood of achieving a quick sale at a healthy price for your old home.

Take advantage of low rates... while they last

Right now, interest rates are at historic lows. But they won’t stay at rock bottom levels indefinitely.

The Reserve Bank of Australia has flagged that it doesn’t expect to lift rates until 2024.4 However, analysis by RateCity5 shows a number of lenders have already raised their home loan rates despite the official cash rate remaining on hold. 

Today’s homeowners have a valuable window of opportunity to upgrade their home while rates are still extremely low – in many cases below 3%, and before values rise further on the next rung of the property ladder.

Latest home loan interest rates
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Buying before you sell

If you need to buy before selling your old place, a bridging loan might be a handy solution. 

A bridging loan is a short term loan, which covers both the existing mortgage on your current home and the costs associated with buying the next one. It's very important to weigh up the pros and cons as these loans often carry a higher interest rate.  

Your local Mortgage Choice broker can crunch the numbers and let you know if bridging finance is a suitable option for your current situation.


Guide to upgrading your home

You've built up enough equity to play with and you're wondering which direction you should take. This guide explores the pros and cons of upgrading.

Download now

Thinking of movin’ on up? Expert advice pays off

If you’re looking to make your next property move give us a call today! Your local Mortgage Choice broker can help you cut through the clutter to help find a lending solution that’s right for you and your situation.

Your local Mortgage Choice broker


Posted in: Home loans

1 CoreLogic Hedonic Index as at 1 May 2021
 CoreLogic RP Data Hedonic Home Value Index, December 2015 Results, 1 January 2016
3 CoreLogic Hedonic Index as at 1 May 2021