Buy before you sell, or sell first and rent?
Two ways to end up in the new home, with very different costs. Most people underestimate the interest on a bridging loan — it adds up fast once peak debt passes $1.5M — and overestimate the cost of renting in between. This calculator runs both options honestly so you can decide on the numbers, not nerves.
Your numbers
cheaper path——
—
How we got this
Working out the math…
The bridging decision in three numbers
The bridging maths is mostly arithmetic once you accept the framing: same end state (you own the new property), two paths there. Three numbers do the heavy lifting:
- Peak debt: existing mortgage + new property price − cash deposit. On a $400k existing mortgage + $1.5M new purchase + $100k cash, peak debt is $1.8M.
- Bridging interest: peak debt × bridging rate × bridge months / 12. At $1.8M peak, 7.5% bridging rate, 6-month bridge: $67,500 of interest. Real money.
- Rent alternative: if you sold first, what would rent cost during the interim? At $4,000/month for 6 months: $24,000.
On those numbers, sell-first-and-rent is $43,500 cheaper. But the calculator's verdict isn't always sell-first — at smaller bridge sizes or higher rents, the math flips.
What the comparison doesn't capture
- Property growth during the wait. If your target market is rising 5% per year and you wait 6 months, the property gets $50k more expensive on a $1.5M target. That eats the rent saving and then some. Conversely if the market's flat or falling, sell-first wins by more than the calculator shows.
- Negotiating leverage. Cash buyers (sell-first) often negotiate $10-30k off the new purchase. Bridging buyers compete with conventional finance pre-approvals and lose negotiating ground.
- Property availability. If the property you want is on the market now and won't be again, bridging is the only path. The calculator assumes property is fungible — usually false.
- Lender bridging-product fees. Setup fees, stage fees, valuation re-certifications — typical $1,500-3,000 per bridge file. Not in the v1 figure.
- Servicing the bridge interest. Some lenders capitalise it; some require monthly payment. Cash flow during the bridge can be tight if you're servicing both mortgages plus the bridge interest.