What you need to know when buying a second home

Published on November 20th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
Our authors

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

At Savvy, our mission is to empower you to make informed financial choices. While we maintain stringent editorial standards, this article may include mentions of products offered by our partners. Here’s how we generate income.

It may have been eons since you were a fresh-faced first-time home buyer, but now the years have passed and you are looking to secure your second home. You may need to brush up on your property buying skills in this ever-changing property landscape to secure a sweet deal for yourself. Here are five things to consider.

1. Checking your home's equity

What can give you more leverage into buying your next place than using your home equity? This is the opportune time to re-evaluate how much equity you have built up in your current home which can make purchasing a new home easier. Home equity is basically the value your home has accumulated over the years. The more of your mortgage you have paid off the more equity your current house will have in place. Not sure how to calculate how much equity you have built up? You could consider using the services of an evaluator who will give you an accurate figure.

2. Doing a market research

When you are trying to nail the process of getting the best value for your home, you will have to put in the market research. It is important that you assess the current area you are in and look for buildings that are similar to your own to get an estimate of what your house could sell for. Although property prices have slumped by 6.1% in capital cities such as Sydney, this does not mean that the property market that you are in has experienced the same effect.

3. Compare the housing growth for your area

Brushing up on your property skills also means knowing how the property in your area has been doing in terms of home values. For example, property values have increased in areas such as Brisbane by 0.31% while Hobart has experienced a booming growth in property values which rose by 9.67%. This can be good news if you own property in such areas, but this could be watered down by costs such as stamp duty that you will have to pay on your new property. You will also have to consider the ongoing costs that come with your new house that could impact your budget.

4. Your credit report matters now than ever

Purchasing a new home means that you could be taking out a new home loan, which also means that your credit report will be under scrutiny. Therefore, before you apply for a home loan it is important that you check your lender's requirement along with your credit score to see if you are eligible to be approved. Remember to check your credit report which is a file that contains the history of all your loans and debt that you have. It will also prove your credit worthiness as to whether you were able to pay them off. Check for any errors or arrears that are on your file that could potentially cause your application from becoming rejected.

Did you find this page helpful?

Thanks for your feedback!

This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

Approval for home loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.

The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.

In this article

Share this article

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on pinterest

Looking for a home loan?

Compare Australia’s reputed home loan lenders with us and save.

* Terms and conditions and lending criteria apply.

Smart money saving tips

Subscribe to our newsletter.

By subscribing you agree to our privacy policy

Related articles

Easily compare home loan options today

We compare home loan options for you so you can be assured you’re seeing the most competitive interest rates available in Australia.

We'd love to chat, how can we help?

By clicking "Submit", you agree to be contacted by a Savvy broker and to receive communications from Savvy which you can unsubscribe from at any time. Read our Privacy Policy.