Moving house is one of the most common mortgage events in NZ — and one of the most logistically complex. Whether you sell first or buy first determines your financing options, your risk exposure, and potentially your negotiating position on both transactions.
You have three main options when moving house in NZ: sell first then buy (safest, no bridging risk), buy and sell simultaneously using bridging finance (common but requires peak-debt assessment), or in some cases port your existing mortgage to the new property (lender-dependent). Each option has different risk and cost trade-offs.
Option 1: Sell First, Then Buy
The safest approach financially and the one most banks prefer. You sell your existing property, receive the proceeds, and then purchase the new one — either immediately or after a brief rental period.
Advantages:
- No bridging finance required — no “peak debt” period
- Your deposit for the new purchase is known and certain
- No risk of owning two properties simultaneously
- Stronger negotiating position on the purchase (you’re not under pressure to sell)
Disadvantages:
- May require a rental period between sale and purchase
- Storage and double-moving costs
- Potential to miss a property you want while you’re still waiting for your sale to settle
Sell-first works best when you’re confident in your ability to purchase quickly, when the rental market is favourable, or when you’re flexible on timing.
Option 2: Simultaneous Settlement Using Bridging Finance
The most common approach for homeowners who need to buy before selling — or who want to coordinate both settlements on the same day to avoid a rental gap.
How it works:
- You go unconditional on the new purchase
- Your bank approves “bridging finance” — a short-term loan covering the period when you own both properties
- Both settlements happen on the same day, or the new purchase settles first and the old property sells within the bridge period (typically up to 12 months)
- Sale proceeds are used to repay the bridging component
Peak debt: During the bridge period, you hold debt on both properties simultaneously. Banks assess whether your income can service this peak debt before approving the bridging loan.
Example:
- New property: $1,000,000 purchase price, $800,000 mortgage
- Existing property: $800,000 value, $350,000 outstanding mortgage
- Peak debt: $800,000 + $350,000 = $1,150,000
- End debt (after sale): $800,000 − (expected net sale proceeds applied to mortgage)
Your income must service the peak debt at the bank’s stress-test rate (~7.5%–8.5%) during the bridge period. This is a meaningful income hurdle.
Risks:
- If your existing property doesn’t sell within the bridge period, the bank may require the loan to be renegotiated or repaid under less favourable terms
- Valuing your existing property accurately before committing is critical
Option 3: Porting Your Mortgage
Some NZ banks allow you to “port” or transfer your existing mortgage — including its fixed rate — to a new property. This avoids the break fee on the fixed rate and maintains continuity.
Conditions that typically apply:
- Both sale and purchase settle on the same day (simultaneous settlement required)
- The new property is approved as security by the same lender
- The loan amount may be adjusted (increase or decrease)
Porting is not widely available or heavily promoted in NZ. Whether your lender offers it depends on their specific mortgage product terms — check your loan agreement or ask your bank directly. A mortgage broker can advise whether porting is viable for your situation.
Fixed Rate Break Fees When Moving House
If you are on a fixed-rate mortgage and sell your property before the fixed term expires, you may incur a break fee (also called an early repayment fee).
How the break fee is calculated: NZ banks calculate break fees based on the difference between:
- The rate you are currently fixed at, and
- The current wholesale rate for the equivalent remaining term
If market rates have risen since you fixed, the break fee may be minimal or zero — the bank can re-lend those funds at a higher rate. If market rates have fallen since you fixed, the break fee can be significant.
Example: You fixed at 5.9% for 2 years, with 14 months remaining. Current equivalent wholesale rate is 4.7%. The difference (1.2%) applied to the outstanding balance over 14 months = the break fee.
On a $500,000 mortgage: roughly 1.2% × $500,000 × (14/12) = approximately $7,000.
Always get a break fee estimate from your bank before committing to a sale date.
If You’re Buying the New Property Through a Different Lender
Moving house is a natural refinancing opportunity. You don’t have to stay with your existing lender for the new purchase. Banks offer cashback deals (typically 0.5%–1% of the loan amount) to attract borrowers who are already going through the process of a property transaction.
However, switching lenders mid-transaction adds complexity — two separate settlements must be coordinated, and you need to ensure the discharge of your old mortgage is registered before or simultaneously with the new mortgage. Your lawyers coordinate this.
See the switching lenders guide for more on negotiating your new rate.
Timing Considerations
Same-day settlement: Coordinating sale and purchase on the same day is logistically complex but eliminates the rental gap. Both lawyers must be in constant communication to ensure funds flow correctly: sale proceeds → repay old mortgage → fund new purchase.
Longer bridge period: More comfortable but carries greater risk that market conditions change between buying and selling. The 2026 NZ market has more listings and longer days-to-sell than 2020–2022 — build in a realistic time buffer when estimating how long your sale will take.
Frequently Asked Questions
What is bridging finance when moving house in NZ?
Bridging finance is a short-term loan that funds the period when you own both your existing and new property simultaneously. It covers the “bridge” between the new purchase settling and your existing property selling. Banks assess your ability to service total debt on both properties (peak debt) before approving bridging.
Can I avoid a break fee when moving house in NZ?
Possibly — if market interest rates have risen significantly since you fixed, your break fee may be minimal or zero. You can also avoid the fee by timing your sale settlement to coincide with your fixed rate expiry. Get a break fee estimate from your bank before setting a settlement date.
How long does bridging finance last in NZ?
Most NZ banks offer bridging finance for up to 12 months. The expectation is that your existing property will sell within this window. Build in conservative timing when estimating your sale period, especially in a slower market.
Do I need to use the same bank when I move house in NZ?
No — moving house is a natural time to compare lenders. Cashback offers, better rates, and more flexible structures are all worth exploring. Using a mortgage broker at this stage costs you nothing and may save thousands.
What happens if my house doesn’t sell during bridging in NZ?
If the property hasn’t sold by the end of the bridge period, you’ll need to negotiate an extension with your bank (not guaranteed) or accept a potentially lower sale price to complete the transaction. This is the primary risk of buying before selling — price your existing property conservatively.