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Buying a new home involves a lot of time, effort, and planning, especially amid family and work obligations. Everything from locating your ideal home, to obtaining the right mortgage, to hiring a moving company to transport your belongings. Now compound that by having to sell your current home before buying your new one!

Though it’s not the ideal scenario, circumstances may have left you with no choice but to sell your old home before moving into your new one. While on the outset this may seem like a dreaded undertaking, there are options available to help you make the transition smoother.

Home equity line of credit

A home equity line of credit (HELOC) is a line of credit secured against your home. While normally used by homeowners to help pay for major expenditures, such as a home renovation or post-secondary schooling, A HELOC can also be used to help fund the down payment on your new home.


Depending on your mortgage contract, you may be able to transfer or “port” your mortgage. Under this agreement, your mortgage provider may permit you to transfer your existing mortgage contract and interest rate from your current home to your new one. This is a great option to consider, especially if your current mortgage has a low interest rate.

Bridge Loan

A bridge loan is a short-term loan offered by financial institutions to help homebuyers finance the purchase of a new home while having to sell their old one at the same time.

Bridge loans are relatively easy to qualify for, but they come with higher interest rates than a HELOC and typically must be paid off in less than a year.

Personal Loan

If you’re unable to borrow against your existing home equity, taking on a personal loan may be an option. The terms and interest rates on a personal loan vary depending on the lender and your personal financial situation. As with bridge loans, personal loans are usually accompanied by higher interest rates than those found on loans based on home equity. Personal loans would have to be taken into account on your mortgage application so please discuss with your mortgage broker before taking out a personal loan to see if it would make sense for your specific situation.


You might want to explore the possibility of using your old home as a rental property. Though you will have to tackle two mortgages at the same time, the mortgage of your old home will be covered by the tenant.

Rent-back agreement

This is another option to consider if you’re not able to access your home equity or don’t qualify for a personal loan. A rent-back agreement grants the seller the ability to “rent” their old home after they’ve sold it.

Basically, you will agree with your lender that you will live in your old property for a period of time until you are able to move into your new home. This arrangement could prove to be beneficial, as it will relieve you of the stress of purchasing a new home right away. The buyer of your old home also benefits because they are able to collect rental income (as you are now legally their tenant).

Trying to sell your old home before purchasing a new one can be challenging, but with some shrewd planning, it can be accomplished. Before starting the process, make sure you have a firm idea of where you stand financially, and ensure you keep tabs on your credit along the way. Doing so will help you choose the best path to minimize the impact on your wallet and have you settled comfortably in your new home in no time.