When should I consider applying for a loan when I purchase off the plan?

Buying your first home ‘off the plan’ means committing to buying a property that has not yet been built. Typically you’ll only have to pay a deposit to the developer/builder and then pay the remaining balance on completion of the property, this allows you to have more time to save before settlement while the property is being built.

Although lenders may offer some sort of pre-approval (finance in principle) for off-the-plan purchases before construction commences, they can’t actually loan you any money until the property is built and they have performed a valuation of the finished product and assessed your financial position at the time of moving into your off-the-plan purchase.

Disclaimer: This article is general nature and should not be relied upon. FHBA is not qualified or licensed to recommend locations for your first home. If you do not know where you want to buy your first home you should speak to a licensed professional.

Should I get a pre-qualification before committing to an ‘off the plan’ purchase?

Whilst your situation may change between the time you commit to a purchase and the time you actually settle on your new home/apartment it is a good idea to get an informal assessment (or pre-qualification) from your broker or lender. Some changes in a lender’s lending practices will be beyond your control, but it is important to consider the following:

  • Rise in interest rates in the future
  • Tightening in lending standards
  • Increase in deposit requirements
  • Restrictions on lending to off the plan purchases (especially if they are below 50sqm in size)

It is important to look into all the risks of buying your first home off the plan

The team at FHBA highly recommend you get an obligation free informal assessment or pre-qualification before paying a deposit (or exchanging contracts) for an off the plan first home purchase. Your FHBA Coach can assist you, they will only require the following information:

  • Current annual income for all parties on the purchase (you can provide future income figures if you are expecting a promotion or pay increase)
  • Number of dependants
  • Current personal loan balances and repayments (if applicable)
  • Current credit card limits
  • Estimated living expenses
  • Projected deposit by the time settlement comes around

When should I consider a pre-approval after I have committed to an off the plan purchase?

Some lenders used to allow first home buyers to get a home loan pre-approval 6 or 12 months prior to settling on an off the plan purchase. However, as lending standards get tighter this option is no longer available now. This is fair enough as the employment status and liabilities for aspiring first home buyers can change over time.

It is a good idea to regularly touch base with the developer/builder or your conveyancer/solicitor to ensure you are informed about when settlement is expected to take place for your off the plan purchase. It is a good idea to start talking to your lender or mortgage broker about your first home loan 4 months prior to the expected settlement date. However, you should only lodge the pre-approval application within 3 months (or 90 days) of the expected settlement date.

Buying off the plan, literally, involves buying based off a set of plans & documents!

Some lenders will just use the contract price (i.e. the amount you signed on for previously) and other lenders will conduct a valuation of the property once it is complete. The valuation figure may come in higher or lower than what you purchased it at, therefore it is important to consider these risks.

The Coaches at FHBA will always recommend getting in touch with a broker as they have access to many lenders (all of whom have different policies). If you go straight to one bank you may be disadvantaging yourself as you will have to abide by their policies on off the plan purchases. FHBA Coaches work differently, as they can also assist you at any time between the contract exchange and settlement period, especially if your personal circumstances change (e.g. loss of job, one of the borrowers going on maternity leave). In fact, if you are purchasing off the plan and decide to use FHBA New Homes & FHBA Mortgages for your off the plan buying journey, you should expect a call every 3 months, between the date you sign the contract and the date you settle on your first home!

How do I get started with an off the plan purchase?

If you are concerned about rising property prices, and therefore you want to secure something that is eligible for your state’s FHOG (& FHBA 50 Rebate) then buying off the plan may be an option that you consider. FHBA and its nationwide partners can assist first home buyers located anywhere in Australia.

The process is simple! (as per below)

  1. Get a complimentary pre-qualification for your first home loan with FHBA Mortgages
  2. Check out the complimentary services provided by FHBA New Homes
  3. Search for your dream off the plan or under construction home on our portal specifically for first home buyers by clicking here


Simply, book your complimentary discovery session with a FHBA Coach who will guide you through the entire journey. To get started, please complete the form below and your FHBA Coach will contact you within 24 hours:


Disclaimer: The information on our website including this page is general in nature and should be solely relied upon. The advertised rates above were true and correct at the time of the publication. The rates do not take into account other fees and charges which you should also consider. The credit license responsible for the mortgage service offered to clients is Mortgage Australia Group Pty Ltd, Australian Credit License (ACL) number 377294, Australian Business Number (ABN) 99 091 941 749. Mortgage Australia Group Pty Ltd is a member of the Mortgage & Finance Association of Australia (MFAA). FHBA Pty Ltd is an authorised credit representative of Mortgage Australia Group Pty Ltd. You should seek professional advice when obtaining finance and purchasing your first property. 

Written By,

First Home Buyers Australia

First Home Buyers Australia
First Home Buyers Australia

Australia’s leading organisation specialising in assisting first home buyers achieve the great Australian dream of property ownership.