Take the next step towards buying your second property

Whether you want to sell your current home and move elsewhere or add to your property portfolio, you’ve got a few financing options to help make buying your second property easier. Your existing home could even help you with your next deposit.

5 minute read

Property purpose and loan types

Buying a second property is a little different to buying your first – there’s more to think about when it comes to your strategy and objectives. There's also different loans available depending on what you're planning for your second property.

Investing in a rental property

This can be a smart financial move, but there’s a few things to think about – like which areas have high renter demand, and the fact that you’ll be paying investor interest rates. Learn more about what to look for in a good investment suburb.

Your Home Lending Specialist can talk you through your options.

Buying a second home to live in

Whether you're planning on selling your current home or renting it out instead, your Home Lending Specialist can talk you through your options. You could:

Buying a holiday house

Getting a loan for a holiday house is a bit different to other home loans. To find out if you’re eligible, you’ll need to speak to your Home Lending Specialist.

Branch appointments available in WA only.

Selling your current home

Remember, your existing expenses are likely to change when you own a new property – so you’ll need to make sure you’re ready to make the switch to your new one. Think about how much you currently spend on your mortgage repayments, insurance, maintenance, rates, commuting and other costs. You can then compare this to your new repayments to make sure moving is the right decision for you.

Get an idea of what your home loan repayments could look like with our home loan repayments calculator.

Simultaneous settlement

Same day, simultaneous settlement is ideal. It’s when the sale of your current home and the purchase of your new home happen on the same day, so the funds just move from one loan to the other. It also means you won’t have to pay two mortgages at once, or rent a place in between selling and buying. Talk to your Home Lending Specialist and settlement agent to see if they can help you make it work.

If it’s not possible, your Home Lending Specialist can help you look into other options – like bridging finance. This is a short-term loan to cover you in between selling your house and buying your new one.

How buying a second home works

When it comes to the process, buying a second property isn’t too different to buying your first home. Just like before, you’ll likely need to have a 20% deposit available to avoid paying Lenders’ Mortgage Insurance (LMI) and apply for another home loan. ​

One of the handy things about buying your second property is that instead of saving cash for your new deposit, you might be able to use the equity in your existing home. Keep in mind, this will depend on the value and purpose of the house you’re looking to buy, plus the amount of equity you’ve got in your first property. Remember, if you’re selling your existing home and your next deposit is more than the funds from the sale of your house, you’ll need to chip in some cash as well. ​

Let’s take a look at the ways you can get it done.

1. Use the equity in your first home

Equity is the difference between the current value of your first home (or current property) and the amount you owe on your mortgage.​

2. Refinance your mortgage

You could refinance your existing mortgage to access your equity.

3. Apply for a new home loan

You might be better off starting with a new loan.​

4. Consider an investment loan

See our investor loans to find one that suits you.​

Things to keep in mind when buying a second home

There are always costs involved when buying and selling properties – things like bank, settlement and transfer of land fees, plus stamp duty. Take a look at our guide to upfront home buying costs, and estimate buying and selling costs with our stamp duty and LMI calculator.

Getting the right information from the beginning can make the process a lot smoother. Think about:

  • Talking to a Home Lending Specialist
  • Having your current home valued by an expert
  • Checking out different neighbourhoods you’d consider buying in
  • Researching the local market that you’re interested in.

If you're turning your current home into an investment property, you'll have a few things to think about – like your rental yield and tax implications. It's a good idea to chat to an expert.

Handy info

If you're selling your current property, see our handy guide to find out how and what to prepare.​

Yes. A popular way to buy an investment property is to use the equity in your existing home. In most cases, you could borrow up to 80% of the value of your current property. Learn more.

If you use the equity in your existing property, you may not have to put any physical cash towards the deposit. Your usable equity is calculated by 80% of your property's value, subtract your current outstanding debt. Keep in mind – if your usable equity isn't enough to cover your full deposit plus any stamp duty and settlement costs, you'll still have to make a cash contribution.

There are a number of costs you need to consider when buying a home which also apply to your second home. Find out more.

Property is a long-term investment, so there are a few things to consider – like nearby amenities, proximity to public transport, and future development opportunities. See more about the features you should think about.

Keep reading

Learn how to calculate your usable equity and use it to pay the deposit for your second home.

Explore your financial options and what else you might need to consider before you make the choice.

We’re here to help

Buying your next home doesn’t have to be so confusing – our Home Lending Specialists are here to help. You can talk on the phone, meet at a branch, or have a Mobile Lending Manager come to you.

The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this article without first obtaining specific professional advice. Also to the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL / Australian credit licence 234945, its related bodies corporate, employees and contractors accept no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this article.