A Smarter Route to Your Next Home

Buying a new home while owning an existing property can present a number of financial and practical challenges. From finding a buyer and negotiating a sale price to coordinating completion dates and arranging mortgage finance, moving home can become a complicated process.

A Part-Exchange Buying Option With a Mortgage offers a potential alternative by combining the value of an existing property with a mortgage to help finance the purchase of another home, subject to eligibility, valuation, affordability and contractual requirements.

For eligible homeowners, this approach may simplify the transition between properties, reduce reliance on a separate open-market sale and provide a more coordinated route towards purchasing a new home. 

At DCANS Mortgage Ghana, we recognise the importance of exploring practical property-buying solutions that help homeowners understand their options and plan their next move with greater confidence.

WHAT IS A PART-EXCHANGE BUYING OPTION WITH A MORTGAGE ?

A part-exchange arrangement generally involves a property buyer or participating property provider accepting an existing property as part of the consideration for a new property.

Where mortgage finance is also involved, the homeowner may use the agreed value or equity in their existing property towards the purchase price of the replacement home and obtain a mortgage to finance the remaining eligible amount.

The precise structure depends on the participating parties, property valuations, outstanding mortgage balances, lender requirements and the terms of the transaction.

For example, a homeowner who wishes to move from an existing property to a more suitable home may explore whether the equity in their current property can contribute towards the new purchase, with mortgage finance covering some or all of the remaining funding requirement.

Important:

Part-exchange is not automatically available with every property developer or mortgage provider. The participating provider must agree to the arrangement, and any mortgage remains subject to the relevant lender's approval.

HOW DOES THE PART-EXCHANGE OPTION WORK ?

Although the process varies between providers, a typical transaction may involve the following stages.

Step 1: Assess Your Existing Property

The homeowner provides information about the current property, including its location, condition, ownership details, outstanding mortgage and estimated market value.

Step 2: Obtain a Property Valuation

The participating provider arranges or considers an appropriate valuation to determine whether the property meets its part-exchange criteria. The value offered may differ from the price the homeowner expects to achieve through an independent open-market sale.

Step 3: Establish the Available Equity

The parties assess the existing property's value against any outstanding mortgage, secured borrowing, transaction costs and other relevant liabilities. The resulting equity may contribute towards the purchase of the replacement property, subject to the agreed transaction structure.

Step 4: Select the Replacement Property

The homeowner identifies a suitable property and confirms its purchase price, availability, legal status and any conditions attached to the transaction.

Step 5: Arrange Mortgage Finance

An eligible mortgage provider assesses the applicant's income, expenditure, creditworthiness, existing liabilities and the proposed property's suitability as security. The lender determines whether the requested mortgage is affordable and meets its lending criteria. 

Step 6: Complete Legal and Financial Checks

Qualified legal professionals review the sale and purchase arrangements, existing mortgage redemption requirements, title documentation and any conditions associated with the part-exchange.

Step 7: Complete the Transaction

Once all required approvals and contractual conditions are satisfied, the existing property and replacement home transactions are completed in accordance with the agreed arrangements.

The homeowner then takes ownership of the new property, subject to the terms of the purchase and mortgage.

BENEFITS OF PART-EXCHANGE BUYING OPTION

A More Coordinated Move 

A part-exchange arrangement may help coordinate the sale of an existing property with the purchase of a replacement home, potentially reducing the uncertainty associated with finding an independent buyer.

Using Existing Property Equity 

Homeowners may be able to use eligible equity in their current property towards the replacement purchase rather than relying entirely on cash savings.

Reduced Sale-Related Uncertainty 

Where a provider has agreed to accept the existing property, the homeowner may face less exposure to delays caused by finding a buyer, although the transaction remains subject to contractual conditions.

A Potentially Simpler Buying Process

Combining the property exchange and mortgage application within a coordinated transaction may reduce administrative complexity.

Moving to a More Suitable Home

The arrangement may help homeowners explore a move to a larger property, a different location or a home that better meets their changing household needs.

Greater Financial Planning Clarity

An agreed valuation, mortgage assessment and transaction schedule can help eligible buyers understand the funding required before proceeding.

These potential benefits depend on the provider's terms, the agreed property valuation and the circumstances of each transaction.

UNDERSTANDING PROPERTY EQUITY AND MORTGAGE REQUIREMENTS

Property equity is the difference between a property's value and the outstanding debt secured against it, before deducting any applicable transaction costs. For illustration, consider the following hypothetical transaction:

ITEM	ILLUSTRATIVE AMOUNT
Agreed value of existing property	GHs250,000
Outstanding mortgage	GHs100,000
Gross equity before costs	GHs150,000
Purchase price of replacement property	GHs350,000
Indicative difference after gross equity	GHs200,000

In this illustration, the homeowner has GHs150,000 in gross equity before costs. The difference between the new property's purchase price and that gross equity is GHs200,000.

However, GHs200,000 is not automatically the required mortgage amount. The actual funding requirement may change after mortgage redemption charges, legal fees, taxes, other transaction costs, any part-exchange valuation adjustment and the treatment of sale proceeds are taken into account.

The mortgage provider must also assess affordability, loan-to-value requirements and all other applicable lending conditions.

WHO BENEFITS FROM PART-EXCHANGE BUYING OPTION ?

Depending on the provider's eligibility criteria, this approach may be worth exploring for:

Existing Homeowners

Individuals seeking to move from their current property to another home.

Growing Families

Households looking for additional living space or a different property layout.

Downsizers

Homeowners considering a smaller or more manageable property.

Relocating Homeowners

Buyers moving to another location for employment, family or lifestyle reasons.

Buyers Considering New-Build Properties

Homeowners interested in a participating development that offers a part-exchange arrangement.

Homeowners With Property Equity

Applicants whose existing property may provide a meaningful contribution towards the next purchase.

Eligibility is not guaranteed. Some providers restrict the type, location, value, condition or ownership status of properties they will accept.

IMPORTANT RISKS AND CONSIDERATIONS

Before committing to a part-exchange mortgage transaction, homeowners should carefully consider the following.

Property Valuation

A part-exchange offer may be below the price potentially achievable through an open-market sale. Compare the net financial outcome rather than focusing solely on convenience.

Existing Mortgage Redemption

Any outstanding mortgage secured against the current property will normally need to be addressed as part of the transaction.

Mortgage Affordability

The replacement mortgage must be affordable under the lender's assessment, taking account of existing commitments and foreseeable financial changes.

Interest Rates and Fees

Review the interest rate, mortgage term, fees, repayment obligations and the total cost of borrowing.

Tax and Transaction Costs

Stamp duty or other property taxes, legal fees, valuation costs and other charges may apply depending on the property, parties and transaction structure.

Contractual Conditions

Understand what happens if a valuation changes, a mortgage is declined, a completion date is delayed or one of the transactions cannot proceed.

Legal and Regulatory Requirements

Confirm the ownership arrangements, property documentation and applicable consumer and mortgage protections with suitably qualified professionals.

A part-exchange arrangement should be assessed on its overall financial and legal merits, not simply on the promise of a convenient move.

PART-EXCHANGE BUYING OPTION

DCANS Mortgage Ghana recognises that homeowners may need financing solutions that take account of their existing property commitments as well as their next purchase.

Our focus is on helping prospective homebuyers understand mortgage options, assess their financial readiness and explore suitable property-buying arrangements. 

Areas of interest include:

1 Residential purchase mortgages.

2 Mortgage affordability and pre-approval.

3 Existing property equity considerations.

4 Part-exchange transactions involving eligible properties.

5 New-build property purchases.

6 Mortgage application preparation.

7 Property due diligence and transaction planning.

Any part-exchange arrangement would depend on the availability of a participating property provider, agreement on the existing property's value, the transaction structure and the mortgage provider's lending criteria.

A part-exchange option should not be assumed to be available unless the relevant parties have confirmed the terms.

YOUR NEXT HOME COULD START WITH YOUR EXISTING PROPERTY

Moving home does not always have to begin with a conventional property sale followed by a separate purchase. For eligible homeowners, a part-exchange arrangement combined with an appropriate mortgage may provide another route to consider.

By evaluating existing property equity, comparing valuations, understanding transaction costs and obtaining suitable mortgage advice, homeowners can make more informed decisions about their next move.

At DCANS Mortgage Ghana, we believe that clear information, responsible borrowing and careful planning are essential to making property-buying decisions with confidence.

Unlock the potential of your existing property. Explore your mortgage options. Plan your next move.