Is It Time To Upsize?
As life evolves, your housing needs often change too. Whether it’s a growing family, a desire for more space, or improved financial circumstances, upsizing can be the solution to meet these new demands. Interestingly, 28% of Australians without spare rooms are eager to upsize, reflecting the ongoing need for homes that accommodate changing lifestyles (Property Update).
If you’re considering a move to a larger home, here’s everything you need to know to make a confident and well-informed decision.
Signs It’s Time to Upsize
How do you know when upsizing is the right choice? Here are some common reasons Australians make the move:
Growing Family Needs: Whether it’s a new baby, teenagers needing their own space, or accommodating extended family, more room becomes essential.
Improved Financial Position: A pay rise, new job, or financial milestone may make a larger home more achievable.
Lack of Space: If your current home feels cramped or lacks amenities like a home office or storage, it might be time to consider a bigger property.
Lifestyle Changes: A desire for larger outdoor areas, a pool, or a dedicated entertaining space can often drive the decision to upsize.
How to Use Equity to Upsize
Your current property’s equity can be a powerful tool when upsizing. Here’s how it works:
Selling Your Current Home
Selling allows you to use the proceeds, including the equity, as a deposit for your next property. For example, if your home is valued at $800,000 and you owe $500,000, the $300,000 in equity can go toward your next home purchase.Keeping Your Current Home
If you can afford to keep your existing home, you could turn it into an investment property and leverage its equity for a loan on your next home. For instance, if your home is worth $800,000 and you owe $400,000, you might access $200,000 in usable equity to fund your next purchase.
This approach lets you build wealth through property investment while upgrading your living space.
Financial Considerations for Upsizing
Before making the leap, consider both upfront and ongoing costs to ensure upsizing aligns with your financial goals.
Upfront Costs
Stamp Duty: This varies by state and can be significant. Below are rounded, indicative stamp duty costs for purchasing a $1 million property in each state or territory:
ACT: $34,000
NSW: $40,000
NT: $50,000
QLD: $38,000
SA: $49,000
TAS: $40,000
VIC: $55,000
WA: $43,000
Disclaimer: Stamp duties are subject to change and may vary based on individual circumstances. The above figures are accurate as of early 2025.
Lenders Mortgage Insurance (LMI): Borrowing more than 80% of the property’s value may require LMI, which can add tens of thousands of dollars to your costs.
Additional Expenses: Real estate agent fees, legal fees, and moving costs should also be factored in.
Ongoing Costs
Higher Mortgage Repayments: A larger home often means a bigger loan and increased monthly repayments.
Increased Bills: Utilities, insurance premiums, and maintenance costs typically rise with a larger property.
Understanding these costs in advance can help you plan effectively and ensure upsizing fits within your financial capabilities.
Should You Renovate Instead of Upsize?
If you love your current home and neighbourhood, renovating might be a cost-effective alternative to upsizing. Reconfiguring or expanding your home can provide the extra space you need while avoiding some of the costs of moving, such as stamp duty and real estate agent fees.
However, renovations come with their own challenges:
Costs for materials, trades, and council approvals.
Temporary disruption, potentially requiring alternate accommodation.
Risk of overcapitalising—spending more on renovations than the value added to your property.
Carefully evaluate whether renovating or relocating better suits your long-term goals.
Making the Move
If you’ve decided that upsizing is the best option, here are some steps to make the process smoother:
Consult a Mortgage Broker
A broker can assess your borrowing capacity, explore refinancing options, and guide you through the financial aspects of upsizing.Understand Your Current Home’s Value
Knowing your property’s market value will help estimate the equity available for your next purchase.Plan Your Finances
Obtain pre-approval for a loan to streamline the buying process and strengthen your position when making offers.Explore Bridging Finance
If you want to buy before selling, bridging loans can provide the flexibility needed to secure your next property without rushing the sale of your current one.
Ready to Upsize?
Upsizing is an exciting step, offering more space and new opportunities for your family. With careful planning and professional guidance, the process can be seamless and stress-free.
It’s our aim to always be recognised as the best mortgage broker in Hobart by delivering expert advice and tailored solutions to help clients achieve their property goals. Whether you’re in Hobart, across Tasmania, or anywhere in Australia, we’re here to help make your move a success.