Move First Finance: Buy Before You Sell
How to buy your next home before you sell your current one, how bridging finance works, what it costs, and who it suits, explained by an Adelaide mortgage broker.
Move first finance, also called bridging finance, lets you buy your next home before your current one sells. The lender funds both properties for a short bridging period, and once your old home sells the proceeds pay the loan down. It removes the pressure to sell first and rent in between, but you carry both loans for a time, so it suits people with solid equity and a realistic plan to sell.
Most people assume they have to sell before they can buy, which often means selling under time pressure, then renting or scrambling to line up settlements. Move first finance flips that. It lets you secure and move into your next home first, bridges the gap while your current home is on the market, and clears the bridge once that sale settles. Done with enough equity and a sensible sale plan it is a powerful way to move on your terms. Done without a buffer it carries real risk, because for a period you are responsible for two properties.
What move first finance is
Move first finance is a short term loan that covers the gap between buying your new home and selling your old one. The lender effectively lends against both properties during the bridging period, so you can buy first and sell second rather than the other way around. It is designed to be temporary, not a long term loan.
How it works, step by step
The shape of a move first arrangement is simpler than it sounds.
- You buy and move into your new home.
- The lender bridges, holding security over both properties.
- Your old home goes on the market and sells.
- The sale proceeds pay down the loan.
- You are left with a normal home loan on your new place.
Peak debt and end debt
Two terms do most of the work here. Peak debt is the total you owe while you hold both properties, your new purchase plus what is left on your old home. End debt is what remains after your old home sells and the proceeds are applied. Lenders care most about whether your end debt is comfortably serviceable, and whether your equity covers the peak.
What it costs
During the bridging period you pay interest on the peak debt, which is larger than a normal loan because it spans both homes. Depending on the structure, interest may be added to the loan rather than paid monthly. There can also be valuation fees on both properties and the usual loan costs. The shorter your bridging period, the less the interest adds up.
Closed versus open bridging
There are two flavours. Closed bridging is when your old home is already under contract with a settlement date, so the end is known and the risk is lower. Open bridging is when you have bought but not yet sold, which gives flexibility but more uncertainty, since you are carrying peak debt without a confirmed sale. Lenders treat the two differently.
Who move first finance suits
It tends to suit movers in a particular position rather than first home buyers.
- Owners with strong equity in their current home.
- Upgraders who have found the right next home.
- People who want to avoid selling, renting, then buying again.
- Markets where the right home is hard to time with a sale.
The risks to understand
The honest part. If your old home sells for less than expected, or takes longer than planned, your peak debt sits higher for longer and costs more. You need a buffer and a realistic price expectation, not a best case one.
- Your old home may sell slower or for less than hoped.
- You carry interest on a larger peak debt meanwhile.
- A buffer matters in case the sale drags.
- A realistic sale price, not an optimistic one, is key.
How lenders assess it
Lenders look hard at the equity in your current home, your ability to service the end debt, and a sensible valuation on both properties. The stronger your equity position and the clearer your sale plan, the more comfortable a lender is bridging you. This is exactly the kind of structuring a broker maps out before you commit.
Is move first finance right for you?
If you have real equity, a home worth buying now, and a realistic plan to sell, moving first can save you the stress and cost of a double move. If your equity is thin or your sale is uncertain, the safer path may be to sell first or line up simultaneous settlements. The numbers, run against your actual position, make the call.
- Move first finance lets you buy before you sell.
- You carry peak debt across both homes for a short period.
- It suits movers with strong equity and a realistic sale plan.
- Closed bridging, with a sale already contracted, is lower risk.
- A buffer matters in case your sale takes longer than hoped.
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Move First Finance: common questions
What is bridging finance?
Bridging finance is a short term loan that lets you buy your next home before your current one sells. It covers the gap by lending against both properties for a limited period, so you are not forced to sell first.
How can I buy before I sell my current home?
The two main ways are bridging finance, which funds the new purchase until your old home sells, or using your equity with a longer settlement on the new home. Which fits depends on your equity, timing, and lender.
How does a bridging loan work?
The lender combines the debt on your current home and the new purchase into a total called peak debt, for a set bridging period. You generally make limited or no repayments during it, then your old home sells and reduces the loan to the end debt.
What is peak debt in a bridging loan?
Peak debt is the total you owe during the bridging period, combining the remaining loan on your current home and the full cost of the new one, including purchase costs. It is the maximum the lender is exposed to before your old home sells.
Do I make repayments during the bridging period?
It depends on the structure. Some bridging loans let interest accrue or be capitalised onto the loan during the bridge, so you make limited or no repayments, while others require interest payments. The approach affects your end debt.
How long can a bridging loan last?
Bridging periods are short, commonly up to around six months for an existing home sale and longer for a build. Lenders expect your current home to sell within that window, so it is not a long term arrangement.
What happens if my home does not sell in time?
If your current home does not sell within the bridging period, the loan can become more expensive, and you may need to reduce the price, extend the loan if the lender allows, or restructure. This is the main risk of bridging.
What does bridging finance cost?
Costs include interest on the larger peak debt, which may be capitalised, plus the usual loan and valuation fees on both properties. Because you are briefly financing two homes, the interest cost can be meaningful, though only for the short bridging period.
Do I need a deposit to buy before I sell?
Often your equity acts as the deposit. Because bridging lends against both your current home and the new one, the equity in your existing home can cover the deposit and costs, so you may not need separate cash savings.
What is the difference between bridging finance and a deposit bond?
A deposit bond is a guarantee that covers the deposit at exchange without cash, used at the start of a purchase. Bridging finance actually funds the full new purchase until your old home sells. They solve different parts of the timing problem.
How much equity do I need for bridging finance?
You generally need enough equity in your current home that, after the new purchase, your end debt and peak debt sit within the lender limits. Strong equity makes bridging straightforward; limited equity makes it harder or more costly.
What is a simultaneous settlement and is it an alternative?
A simultaneous settlement is when your sale and purchase settle on the same day, so you avoid bridging entirely. It is a clean alternative when timing can be aligned, but it can be hard to coordinate and leaves little margin if one side slips.
Can I use bridging finance to downsize?
Yes. Downsizers often use bridging to secure a smaller home before selling the larger one, especially in a tight market. The sale of the larger home usually clears most or all of the bridging debt on settlement.
Can I get bridging finance if I am self-employed?
Yes. Self-employed borrowers can use bridging finance, with income evidenced through tax returns or alternative documentation. The lender still focuses heavily on your equity and the realistic sale of your current home.
Is bridging finance the right option for me?
It can be, if you have found the right home, hold solid equity, and your current home can realistically sell within the bridging period. It is the wrong option if your sale is uncertain or your equity is thin, where the risk and cost rise.
Can I really buy a home before I sell mine?
Yes. That is exactly what move first or bridging finance is for. The lender funds both properties for a short period, and your old home sale clears the bridge once it settles.
How long does the bridging period last?
It is meant to be short, typically months rather than years, covering the time it takes to sell your existing home. The shorter it is, the less interest builds up on the larger peak debt.
Do I make repayments on both homes at once?
It depends on the structure. In many arrangements the interest on the peak debt is added to the loan during the bridging period rather than paid monthly, then settled when your old home sells.
What if my old home does not sell in time?
This is the main risk. Your peak debt stays higher for longer and costs more interest, which is why a buffer and a realistic sale price matter. A broker will stress test this before you proceed.
How much equity do I need to move first?
There is no single figure, but strong equity in your current home is central, because it underpins the peak debt and gives the lender comfort. The more equity, the smoother the bridge.
Is bridging finance expensive?
You pay interest on a larger peak debt for the bridging period, so cost depends on how long it runs and the structure. A quick, well planned bridge can be very manageable, a drawn out one less so.
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General information only. This page provides general information about home loans and is not financial or credit advice, a quote, or a guarantee, and your personal circumstances have not been considered. Lending policies, interest rates, fees and eligibility vary by lender and change over time. Always confirm your own situation with a licensed mortgage broker or lender before acting. Ross McFarlane (Credit Representative 526725) is an authorised Credit Representative of Australian Associated Advisers Pty Ltd t/a Keylend, Australian Credit Licence 392169.