Selling your home doesn’t necessarily mean giving up your existing loan. If you’re wondering, whether or not you can transfer a home loan to another property, the answer depends on your lender’s portability rules and your circumstances.
You may be able to keep your current loan while replacing the property securing it. This guide explains the process, settlement timing, bank-held term deposits, refinancing alternatives and the costs to consider before moving.
Key Takeaways
| Key Question | What You Need To Know |
| Can you transfer an existing loan? | Yes, some lenders allow portability if you meet their eligibility requirements. |
| What is a security swap? | Your lender replaces the property securing your existing debt with another property. |
| What if settlement dates differ? | Some lenders offer deferred portability using a bank-held term deposit as temporary security. |
| Can you borrow more? | Additional borrowing may require a separate application or a new loan. |
| Will you pay stamp duty? | Property transfer duty may apply when purchasing your replacement property. |
| Can you keep a fixed rate? | Portability may preserve your existing rate and help avoid fixed-rate break costs. |
| Is refinancing an alternative? | Yes, especially when your borrowing needs or preferred loan features have changed. |
What Is Home Loan Portability?
Home loan portability allows you to retain your existing loan while changing the property securing the debt. Lenders also call this a substitution of security or security swap.
Normally, your lender holds a registered mortgage over your property. When you sell, the lender generally expects the outstanding debt to be repaid from the sale proceeds.
With portability, the lender approves the release of your old property and accepts your replacement property as security. Your existing loan can then continue under the approved arrangement.
According to ANZ’s security swap guide, borrowers must meet specific conditions involving settlement timing, loan amounts and property suitability.
Which Loan Features Can You Keep?
Depending on your lender’s conditions, you may retain:
- Your existing interest rate: This may be valuable if your current rate remains competitive.
- Your remaining loan term: You can avoid restarting a fresh repayment schedule unnecessarily.
- Your repayment arrangements: Your existing repayment frequency may continue under the approved loan.
- Linked loan features: Your offset account or redraw facility may remain available, depending on the product.
However, portability does not guarantee that every feature will remain unchanged. Ask your lender to confirm the approved arrangements in writing.
Can You Qualify For A Security Swap?
Your lender must approve the proposed arrangement before the property securing your debt changes. Existing customers do not automatically qualify.
Your Current Loan Must Be Eligible
Check whether your loan product supports portability. Some lenders exclude certain products, borrowers or properties from their arrangements.
Your repayment history can also matter. For example, ANZ identifies arrears as a potential barrier to its security swap option.
Your Replacement Property Must Meet Lending Criteria
Your lender may arrange a property valuation to determine the property’s acceptable security value. It will also assess whether the property meets its lending policy.
For example, suppose your outstanding loan is $500,000 and the replacement property receives an accepted valuation of $800,000.
Your loan to value ratio (LVR) would be:
$500,000 ÷ $800,000 × 100 = 62.5%
This means your debt represents 62.5% of the property’s assessed value. However, a suitable LVR alone does not guarantee approval.
Your Borrowing Amount May Need To Stay The Same
Some lenders restrict security swaps to the existing loan amount or a lower balance. If you need additional funds, you may require a new loan application.
For example, purchasing a more expensive property does not automatically qualify you for a larger loan under portability.
Borrowers And Ownership Must Meet The Rules
Some lenders require the borrowers to remain unchanged. Adding a partner or removing a co-borrower may require a fresh application.
The replacement property’s ownership must also satisfy the lender’s requirements. Confirm these conditions before signing a purchase contract.
Security Swap Versus Refinancing
A security swap and refinancing solve different problems. Understanding the distinction helps you choose an appropriate arrangement.
Refinancing replaces your existing loan with another loan, either from your current lender or a different lender. A security swap changes the property securing your existing debt.
| Consideration | Security Swap | Refinancing |
| Existing loan | Usually retained | Replaced |
| Interest rate | Usually remains unchanged | New rate applies |
| Loan features | Existing features may continue | New product features apply |
| Additional borrowing | May be restricted | Can be assessed with the new application |
| Credit assessment | Lender approval still applies | New lending assessment generally applies |
| Fixed-rate break costs | May be avoided if conditions are met | May apply when ending a fixed loan early |
| Upfront costs | Security and registration fees may apply | Application, discharge and registration fees may apply |
| Loan term | Usually retains the existing term | New approved term may apply |
When Is A Security Swap Suitable?
A swap may suit you when your existing loan still meets your needs. It can also be useful when you want to retain a competitive fixed rate.
However, compare the lender’s conditions with your planned purchase. Portability may not work if you need substantially different borrowing arrangements.
When Should You Consider Refinancing?
Refinancing may be more appropriate when you want a different rate, additional borrowing or features your current product lacks.
The Australian Government’s Moneysmart switching guide explains why borrowers should compare potential savings against discharge fees, application costs and other charges.
How To Transfer Your Loan Step By Step
Once you understand the options, organise the process before committing to settlement dates.
Step 1: Contact Your Lender
Tell your lender you intend to sell your current property and purchase another. Ask whether your loan supports portability and what conditions apply.
Request information about processing times, valuation requirements, fees and settlement arrangements.
Step 2: Review Your Sale And Purchase Contracts
Compare the settlement dates with your conveyancer or solicitor. Ideally, both transactions should settle on the same day if your lender requires simultaneous settlement.
However, contracts can change. Establish an alternative arrangement in case one settlement is delayed.
Step 3: Submit The Portability Application
Provide the requested property details, contracts and settlement information. Your lender may arrange a valuation and assess the replacement property.
Do not assume your existing loan history guarantees approval.
Step 4: Confirm Funding And Settlement Instructions
Ask your lender and conveyancer to confirm how the old security will be released and the new security registered.
You should also establish how the purchase deposit will be funded. Sale proceeds may not be available when your purchase deposit becomes payable.
Step 5: Complete The Security Swap
At settlement, the lender releases its security over your old property and registers security over your replacement property.
Continue making your scheduled repayments throughout the process. After settlement, confirm that your loan balance, repayment arrangements and linked features remain correct.
What If Your Settlement Dates Do Not Match?
Settlement timing can complicate portability. You might sell before finding your next property, or your purchase might settle several weeks later.
Some lenders offer deferred portability using a bank-held term deposit. This arrangement can temporarily secure your existing loan while you organise the replacement property.
How A Bank-Held Term Deposit Works
The process generally follows these steps:
- Obtain approval before selling: Your lender must approve the deferred arrangement and explain its conditions.
- Place sale proceeds into a term deposit: The bank holds the funds as temporary security for the existing loan.
- Keep the funds available as security: You generally cannot freely access money pledged to secure the loan.
- Complete the replacement purchase: Once the new property is ready, the bank can release the term deposit and accept the replacement property as security.
You must continue making your scheduled repayments during this period.
For example, BankSA’s portability guide describes deferred settlement arrangements lasting up to six months, subject to conditions. Its stated limit may be shorter when lender’s mortgage insurance applies.
These terms are specific to BankSA. Other lenders may have different limits, deposit requirements or eligibility rules.
Ask whether the deposit must cover the entire loan balance. Also confirm the maximum holding period and what happens if your next purchase falls through.
What If You Buy Before Selling?
Buying first creates a different funding challenge because your sale proceeds are not yet available.
Bridging finance may help fund the gap between purchasing your next property and selling your current one.
However, bridging finance and deferred portability are different arrangements. Bridging finance addresses a temporary funding shortfall, while a term deposit provides temporary security after a sale.
Your lender may offer one option without the other. Compare the eligibility requirements, interest costs and repayment obligations before deciding.
What Costs Should You Budget For?
Portability may reduce some refinancing expenses. However, it does not eliminate the costs associated with selling and purchasing property.
Property Transfer Duty
Stamp duty refers to property transfer taxes imposed under state and territory rules. The amount depends on the jurisdiction, purchase price and any applicable concession or exemption.
For example, Revenue NSW’s transfer duty guidance explains when duty generally applies to property transactions in New South Wales.
A security swap does not automatically exempt you from duty on your new purchase. Check the applicable rules before calculating your budget.
Conveyancing And Registration Fees
You will generally need professional assistance to complete the sale and purchase. Conveyancing fees and title registration charges may apply.
Your lender may also charge a mortgage registration fee when registering security over the replacement property.
Valuation And Administration Fees
Your lender may charge for assessing the new property or processing the security change. The amount depends on the lender and transaction.
Request a written breakdown of these costs before proceeding.
Fixed-Rate Break Costs
Mortgage break costs may apply when you end a fixed-rate loan early. The amount depends on your contract and the lender’s calculation.
Portability may help you retain the existing loan without triggering those costs. However, the outcome depends on the approved arrangement and any changes to the loan.
Ask your lender to confirm whether break costs apply before making a decision.
How Do Equity And Deposits Affect The Move?
Equity is the difference between a property’s value and the debt secured against it. However, your available funds depend on more than the equity figure.
Selling expenses, the outstanding loan balance and purchase costs all affect the money available for your next property.
You should also distinguish between equity and a purchase deposit. A security swap changes the property’s role as loan security, but it does not remove your contractual obligation to pay the required deposit.
For example, your sale proceeds may be committed to repaying debt or held in a term deposit. You may therefore need separate savings to cover the new purchase deposit.
Before exchanging contracts, confirm when you must pay the deposit and when your sale proceeds will become available. Your conveyancer can help coordinate the timing.
9. What Can Prevent A Security Swap?
Even borrowers with a strong repayment history can face obstacles. The lender assesses the proposed transaction against its own rules.
Common reasons for refusal include:
- Unsuitable security: The replacement property may not meet the lender’s valuation or property requirements.
- Additional borrowing: Your requested loan increase may fall outside the product’s portability rules.
- Settlement delays: The lender may not approve deferred portability or a suitable temporary security arrangement.
- Changes to borrowers: Adding or removing a borrower may require a fresh application.
- Repayment arrears: Existing payment problems may affect eligibility under the lender’s policy.
- Different loan features: Your existing product may not provide the features you now need.
Each problem requires a different response. A revised settlement date may resolve a timing issue, while additional borrowing may require a new application.
If portability is unavailable, compare refinancing, bridging finance or alternative purchase arrangements. Do not commit to a transaction that relies on unconfirmed lender approval.
10. Which Option Fits Your Situation?
The following matrix summarises the main options without repeating the full eligibility requirements.
| Your Situation | Option To Investigate | Main Consideration |
| You sell and buy on the same day | Security swap | Confirm that both settlements can be coordinated. |
| You sell before buying | Deferred portability | Check whether a bank-held term deposit is available. |
| You buy before selling | Bridging finance | Assess the temporary funding cost and repayment plan. |
| You need a larger loan | Loan increase or refinancing | Confirm that you qualify for the additional borrowing. |
| You want different loan features | Refinancing | Compare the total cost and benefits of the new product. |
| You need to change borrowers | New lending assessment | Confirm ownership and borrower eligibility. |
This is a starting point, not a guarantee of approval. Your lender’s rules and financial position determine which arrangements are available.
For additional guidance, Moneysmart’s home loan selection guide explains how to compare interest rates, fees and loan features.
11. Do The Rules Differ Across Australian States?
The basic principles of portability are broadly similar across Australia. Lender policy, security documentation and settlement timing generally matter more than your state or territory.
However, property taxes, transfer requirements and concessions differ between jurisdictions. Check the relevant state or territory revenue office before purchasing.
For example, New South Wales and Queensland have different transfer duty rules and first-home buyer concessions. Your conveyancer can explain which provisions apply to your transaction.
Also budget for applicable registration and conveyancing expenses. These costs remain relevant even when your lender allows you to retain your existing loan.
Conclusion: Moving Without Replacing Your Existing Loan
You may be able to transfer your existing loan to another property through portability, also called a substitution of security. This can preserve suitable loan terms and reduce some refinancing expenses.
The main considerations are your lender’s eligibility rules, the replacement property’s value and the timing of your settlements. If you sell first, an approved bank-held term deposit may provide temporary security.
Refinancing or bridging finance may be more suitable when you need additional borrowing or cannot meet portability conditions. Compare the available arrangements, understand the costs and confirm your settlement plan before committing to your next purchase.
Ultimately, Buying a house while retaining your existing loan can be possible in suitable circumstances. Careful planning helps you understand your options and avoid unexpected funding problems.
Frequently Asked Questions
1. Can I Transfer My Home Loan To Another Property?
Yes, some lenders allow you to transfer an existing loan through portability. Your lender must approve the replacement property and confirm that your loan meets its requirements.
2. Can I Keep My Current Interest Rate When Moving?
Usually, a security swap allows you to retain your existing rate and loan terms. However, your lender must approve the arrangement, and additional borrowing may require different terms.
3. Can I Transfer A Fixed-Rate Home Loan?
Some lenders allow portability on fixed-rate loans. This may help you avoid break costs if you retain the existing loan under an approved arrangement.
4. What Happens If I Sell Before Buying Again?
Your lender may offer deferred portability using a bank-held term deposit as temporary security. The holding period, deposit requirements and eligibility conditions depend on the lender.
5. Can I Transfer My Loan To A More Expensive Property?
Possibly, but you may need additional borrowing to fund the difference. Your lender may require a separate application or a new loan.
6. Do I Pay Stamp Duty When Transferring My Loan?
You generally need to budget for applicable property transfer duty when purchasing another property. Portability does not automatically remove these taxes, although concessions or exemptions may apply.
7. Is Portability Better Than Refinancing?
Neither option is always better. Portability may preserve suitable existing terms, while refinancing may provide a different rate, additional borrowing or new features.
8. Can A First-Time Home Buyer Transfer An Existing Loan?
A home buyer who already has a loan may qualify for portability when purchasing another property. However, someone buying their first property without an existing loan cannot transfer one.
