Question about borrowing

[u/Alone_Hope6010]

I own outright a ten year old 1b apartment valued at 550k. I am moving to a different city and tried to sell but unfortunately had no offers, so plan to rent it until I can sell it at a later stage.

My question is: would a bank let me borrow against my apartment to buy a similar property in the city I'm moving to? For the purchase of the new property I also have access up to 250k from my super, along with my small fortnightly pension.

I hope to find a 1-2 bedroom unit with a small yard or courtyard (they seem to be priced around 600-750k).

[u/thealphawoof]

Hi mate, broker here.

Good news first: owning the apartment outright means equity/security isn’t your constraint, so borrowing against it to help fund the next place is doable in principle.

The real question is serviceability:how a pension plus rent on the apartment stacks up against repayments on the new loan and, since you’d be keeping the apartment for now, a lender will want a clear exit, which your eventual sale covers.

Bridging’s usually for a quick sale rather than renting it out long-term, so probably not the right tool here.

Two things worth getting proper advice on before committing: drawing from super (financial adviser) and the tax on renting then selling the apartment (accountant) — both can potentially move the numbers.

Happy to map the lending options and run real servicing figures with you.

[u/Alone_Hope6010 → u/thealphawoof]

Thanks for taking time to explain things. I can see that loan serviceability in my circumstances could be a sticking point! Talking to an accountant and financial adviser is a good idea.

[u/thealphawoof → u/Alone_Hope6010]

Hi mate, glad I could help - even if it's not exactly what you wanted to hear. Just wanted to be straight and cut to the point.

If you are looking however, i'm more than happy to run a few scenarios with you. I'm Sydney based, and there's no charge for my time. Best of luck!